Report by : Gan Yung Chyan
/ KUCINTA SETIA
Image : Daniel Slim / AFP via Getty Images
In order to restructure the heavy debt caused by the "unexpected shock" of the covid pandemic, Avianca, the second largest airline in Latin America, filed for bankruptcy protection in the United States on 10 May 2020.
The decision to apply for bankruptcy protection is due to the closure of Colombian airspace as the number of covid cases in Colombia continued to increase. At the end of March 2020, Aviana suspended all passenger aircraft operations. Of the airline's more than 20,000 employees, 12,000 staff are on unpaid leave.
Avianca CEO Anko van der Werff said in a press release, "Avianca is facing the most challenging crisis in its century of history.
Avianca issued a statement in Bogota, emphasizing the grounding of its fleet "has reduced the company's comprehensive income by more than 80%, and caused significant pressure on capital liquidity." The company and "some subsidiaries and affiliated companies" have requested in New York courts to "voluntarily apply for bankruptcy protection in accordance with Chapter 11 of the US Bankruptcy Law."
This procedure allows companies and companies with financial difficulties to restructure and restructure their debt.
Avianca asked the New York court to give priority to "authorize the performance of work commitments" so that the company's "compensation plan for employees can continue to operate."
Avianca first filed for bankruptcy protection in the United States in 2003, with a net loss of $ 894 million in 2019, compared with a profit of only $ 1.1 million in 2018.
Juan David Ballen, chief economist of Casa de Bolsa, a securities broker in Bogota, was not surprised that Avianca filed for bankruptcy protection again. He said that this company was already heavily in debt and tried to restructure its debt in 2019.
/ KUCINTA SETIA
Image : Daniel Slim / AFP via Getty Images
In order to restructure the heavy debt caused by the "unexpected shock" of the covid pandemic, Avianca, the second largest airline in Latin America, filed for bankruptcy protection in the United States on 10 May 2020.
The decision to apply for bankruptcy protection is due to the closure of Colombian airspace as the number of covid cases in Colombia continued to increase. At the end of March 2020, Aviana suspended all passenger aircraft operations. Of the airline's more than 20,000 employees, 12,000 staff are on unpaid leave.
Avianca CEO Anko van der Werff said in a press release, "Avianca is facing the most challenging crisis in its century of history.
Avianca issued a statement in Bogota, emphasizing the grounding of its fleet "has reduced the company's comprehensive income by more than 80%, and caused significant pressure on capital liquidity." The company and "some subsidiaries and affiliated companies" have requested in New York courts to "voluntarily apply for bankruptcy protection in accordance with Chapter 11 of the US Bankruptcy Law."
This procedure allows companies and companies with financial difficulties to restructure and restructure their debt.
Avianca asked the New York court to give priority to "authorize the performance of work commitments" so that the company's "compensation plan for employees can continue to operate."
Avianca first filed for bankruptcy protection in the United States in 2003, with a net loss of $ 894 million in 2019, compared with a profit of only $ 1.1 million in 2018.
Juan David Ballen, chief economist of Casa de Bolsa, a securities broker in Bogota, was not surprised that Avianca filed for bankruptcy protection again. He said that this company was already heavily in debt and tried to restructure its debt in 2019.
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