Avianca: airline's rebuilding will take time to bear fruit

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Latin American airline group Avianca Holdings has had a tumultuous 2019 that includes shareholder upheaval, urgent debt renegotiations and significant changes to its senior management.

The company has cut more than 20 unprofitable routes and part of Avianca’s strategy in 2020 is full leverage of the company’s hub in Bogotá, with a planned 20% increase in international city pairs. The airline has already announced plans to launch service from Bogotá to Asunción and Montevideo, and recently forged new codeshare agreements with GOL and Azul

Avianca is working to shrink its fleet and aims to phase out its Embraer 190s by the end of year 2019. The company is also working to shed its remaining A318s and two additional A320s by the end of 2019.

Although Avianca’s new senior management has laid out a back to basics plan that includes cutting unprofitable routes, a refocus on its Bogotá hub and the shedding of smaller gauge aircraft, its debt levels remain significant, and balance sheet repair will be an ongoing concern for the future. 

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