- After entering Chapter 11 on May 10, 2020, the company successfully achieved agreements with its creditors, raised fresh investments of $1.7 billion, and obtained approval for its plan of reorganization, emerging with a solid balance sheet, significantly reduced debt and over $1 billion in liquidity.
- With the airline's exit from Chapter 11, the Company has a new business model with a more flexible product tailored to each passenger's needs and more accessible pricing while retaining Avianca's leading network and frequencies, best-in-class loyalty program, and one of the largest cargo operations in the region.
Avianca announced today that it has successfully completed its financial restructuring process and emerged from Chapter 11 as a more efficient and financially stronger airline, with significantly reduced debt and over $1 billion of liquidity.
After advancing through the Chapter 11 process in 18 months, Avianca has revamped its business model to be significantly more efficient, reaffirming its commitment to providing reliable and on-time service, combining a value proposition that includes the best attributes of low-cost airlines, while retaining key differentiators that allow it to be the most convenient travel alternative for millions of passengers in Latin America and the world.
Rohit Philip, Chief Financial Officer of Avianca, said: "This is an important day for Avianca and all of our stakeholders. We are pleased to be emerging successfully from this process, with Avianca in a stronger financial position to continue serving our customers and flying the skies for many years to come. We look forward to continuing to execute on our new business vision and capitalizing on the recovery in travel demand to drive our future success."
Adrian Neuhauser, President and Chief Executive Officer of Avianca, said: "We look forward to the Company's future success as we continue building upon Avianca's rich history across Latin America and internationally. We appreciate the support of our loyal customers, partners, and lenders throughout this process. I would also like to thank our dedicated employees for their commitment to providing uninterrupted service to our customers and whose hard work enabled us to complete this process efficiently. I am confident that we are well-positioned to be a highly competitive and successful carrier."
Looking ahead, Avianca will continue to strengthen its value proposition, adjusting its products and services to the needs of its customers:
- Competitive Prices: Affordable prices are more important now than ever. The Company will provide more competitive pricing and allow customers to personalize their fare packages and pay for the services and flexibility they need.
- One of the strongest networks in Latin America: Over the next three years, Avianca expects to nearly double its network, expanding to nearly 200 routes in Latin America and the world. The majority of the new routes will be point-to-point, providing greater convenience to its customers. The network will be served by a fleet of more than 130 aircraft by the end of 2025 with reconfigured, lighter-weight new-generation seats, which will allow Avianca to reduce the carbon footprint of its operations and contribute to airport decongestion while increasing its efficiency.
- More seats and more comfort: Avianca is committed to investing more than US$200 million in the next year renewing its seats, including three new types - Premium, Plus and Economy - of its A320 fleet in order to provide greater comfort, operate more efficiently, and offer more competitive prices.
- Boeing 787 for long-haul flights: The airline will continue to fly the Dreamliner, an exceptional aircraft that given its capabilities, features, efficiency, and comfort is the best solution for the Company and customers.
- Avianca Cargo, a strategic business: The Company's Cargo business will continue with significant growth potential, maintaining its leadership in Colombia and continuing to expand in other strategic markets, providing more and better solutions to the customers.
- The best loyalty program in the region and VIP lounges: With the LifeMiles frequent flyer program, Avianca customers will be able to continue earning and using miles across the airline's network and with its coalition partners. Likewise, passengers will continue to enjoy the Company's VIP Lounges as they have done when flying with Avianca.
- Star Alliance Member: The company will continue to be supported by Star Alliance, the world's largest airline alliance, which provides its customers with connectivity to 1.300 airports around the world.
- Enhanced Services: Avianca has strengthened its online customer service and digital channels for passengers to manage trips more easily. Over the next 12 months, the company plans to further revamp these channels and its apps to continue to improve and make it easier for passengers to manage their travel. Punctuality has been and will continue to be a key priority; according to data from Cirium, Avianca is one of the leading Latin American airlines in on-time performance for 2021.
Roberto Kriete, Chairman of the Board, stated: "We are very proud of the work that the Avianca team has done that has led the company to emerge from Chapter 11 on schedule as a financially stronger organization. While we are on the right path to recovery, we must remain cautious with the progress of the pandemic that has not yet ended and must stay focused on executing our new business plan. I have all the confidence that with the support of our investors, all those who believed in us and with the current leadership, this company will continue to grow while connecting Latin America."
As per the approved plan of reorganization, the new shareholders will invest in Avianca Group International Limited, a new holding company, which will be domiciled in the United Kingdom and will consolidate the group's investments in all of its subsidiaries (including Aerovias del Continente Americano, its Colombian subsidiary, and TACA International, its Central American operation). The prior holding company, Avianca Holdings was domiciled in Panama.
Seabury Securities LLC served as investment banker and financial advisor to Avianca, and Milbank LLP served as legal advisor.