Pandemic Fallout: World's Second Oldest Airline Goes Bust

by GoNews Desk 2 weeks ago Views 1035
Pandemic Fallout: World's Second Oldest Airline Go
World's second oldest airline, Avianca Holdings, on Sunday filed for bankruptcy as it struggles against the coronavirus pandemic and the resulting government-mandated air travel restrictions.

“The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association”, Latin America's second-largest airline said in a statement.

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If it fails to come out of bankruptcy, Colombia-based Avianca would be one of the first large carriers globally to go bust as a pandemic fallout.

The carrier said it has not operated any of its regularly scheduled passenger services since mid-March, which reduced its consolidated revenue by over 80% and placed significant pressure on its cash reserves. The company had failed to meet a bond-payment deadline while its pleas for government aid have been unsuccessful.

Avianca Chief Executive Anko van der Werff said: "Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic."

He continued: "Despite the positive results yielded by our 'Avianca 2021' plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges."

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