Avianca Holdings S.A. Announces Additional Reduction In Capacity

The spread of the Coronavirus (COVID-19) has led global regulators to impose and successively increase restrictions on passenger travel. The Colombian Federal Government today announced that it will close the Colombian international airspace to passenger travel effective March 23, 2020. As a result of this decision, as well as restrictions imposed by federal authorities at most destinations within the Avianca Holdings’ network, the Company will further decrease its capacity, aligned with decreased demand.

• Avianca will cease to operate international passenger capacity effective 12:00 am SAPST/1:00 am EST on March 23, 2020. This restriction is expected to initially remain in place for the subsequent 30 days, as has been mandated by the Colombian Federal Government. Further flights to and within Peru, El Salvador, and Ecuador have already therefore been canceled until the end of April, 2020.

• Passenger transportation within domestic Colombia remains unrestricted, however, demand has been severely impacted by diminished international connectivity. Avianca’s domestic capacity within Colombia will therefore also decrease by 84% as of April 1, 2020.

• Avianca will ground 22 wide body and 100 narrow body aircraft as well as 10 ATRs, while maintaining five Airbus A320 and five ATRs operating within the Colombian domestic market.

Avianca Holdings is working with governments and their respective embassies to ensure continued humanitarian and repatriation flights. The Company is maintaining -and potentially temporarily expanding- operation of its cargo, freight, charter and courier business to adequately serve demand within those countries to which it flies and of its cargo customers.

In addition to reducing capacity, the Company is immediately implementing additional cost savings and liquidity preservation measures, including:

• An immediate hiring freeze

• Implementation of voluntary unpaid leave of absence

• Temporarily deferred labor contracts

• Negotiating payment terms with suppliers and financing suppliers

• Deferral of non-essential costs and capital expenditures

Avianca continues to monitor the situation closely and will provide relevant market updates as appropriate.