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Avianca faces stiff competitors once it exits bankruptcy

Premium Analysis

Avianca’s post-bankruptcy business plan rests on a leaner cost structure and fewer aircraft overall. But the airline is also densifying a portion of that fleet in order to compete better with growing low cost and ultra-low cost operators in Latin America

Yet at the same time, Avianca’s low cost competitors have not rested on their laurels, and have taken the opportunity presented by the COVID-19 pandemic to lower their cost structures further, and some of those low cost operators believe the revenue gap between Latin FSCs and low cost rivals will narrow in the future. 

The result is that Latin airlines restructuring under Chapter 11 could face even more intense low cost competition upon their emergence from bankruptcy. 

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