As part of its new business vision, Avianca will simplify its fleet, which will consist of Boeing 787 and Airbus A320.
Colombian airline Avianca began its takeoff after emerging from Chapter 11 of the bankruptcy law in the United States as a “revitalized” company, with better financial health and a new business vision, its president, Adrián Neuhauser, said on Thursday.
“We have a revitalized Avianca, wanting to grow. We are left with 60% of the debt that we had when we entered Chapter 11 and with three times the cash that we had,” Neuhauser said in a press presentation of the new company.
Neuhauser added that Avianca’s debt was short-term maturities and with the restructuring these obligations went to seven years, which gives them “peace of mind with the capital structure” and at the same time allows them to have “a more efficient cost structure. “.
Avianca filed for Chapter 11 of the US bankruptcy law in May 2020 to emerge from a crisis aggravated by the covid-19 pandemic, and last July it obtained financial commitments for 1.6 billion dollars to finance its reorganization. .
On December 1, the company announced that it had successfully completed its financial restructuring, which allowed it to emerge from bankruptcy “with significantly reduced debt and more than $ 1 billion in liquidity.”
Adaptation to demand
Neuhauser highlighted that with the new business vision, Avianca combines the best of its 102 years of existence with the practicality of the low-cost airline model, without implying its transformation into a “low cost” one.
“We are adapting, recognizing that flying is no longer an option, it is not a luxury, it is part of the basic basket,” he said about the demand for flights, which “accelerated impressively from 2010” and, surpassed the downturn due to the pandemic, it has everything to continue growing.
According to the president of Avianca, there are studies that indicate that in 2027 more than 50% of the Latin American aviation market will be low cost because “people travel because of the price.”
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Standardized fleet
As part of its new business vision, Avianca will simplify its fleet, which will be made up of Boeing 787 and Airbus A320, which implies the retirement of the A330 and ATR-72, the latter used for regional flights.
The airline also launched a reconfiguration of its cabins to offer more seats in the Economy, Plus and Premium categories on more than 90 Airbus A320 aircraft used on short and medium-range routes.
Seven aircraft in Colombia and one in Ecuador already have the cabin reconfiguration with Plus and Economy seats, and in the second quarter of 2022 they will have the first aircraft completely reconfigured with the Premium offer.
This adaptation will last until the end of 2022 and Avianca will invest more than 200 million dollars in those changes.
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Global recovery
Avianca has recovered 73% of its global operation and currently operates 116 routes in the American continent and Europe, with about 3,400 flights a week.
Between January and November of this year, the company transported more than 12 million travelers and operated more than 100,000 flights, a sign that it has begun to recover after the pandemic and the approval of the reorganization plan.
“We are very happy with the way the recovery is going,” Neuhauser said, adding that “the pandemic is not over and the solution to this is vaccination.”
As part of the restructuring, the structure of the company also changed, which was Avianca Holdings, based in Panama and renamed Avianca Group International Limited, domiciled in the United Kingdom. (I)
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