Avianca Holdings makes important moves in gaining financial support
As a promised loan by the Colombian government to the country's largest airline Avianca now remains hung up in an appeals process, and as its Chapter 11 restructuring continues, the company has lined up approximately USD2 billion in financing.
Avianca filed for Chapter 11 in May-2020 after Colombia shut down its airspace in Mar-2020, and government aid from most countries in Latin America has failed to materialise.
The COVID-19 crisis threw a major wrench into the work Avianca was engaging in to reshape its balance sheet and network. During its five months in Chapter 11 Avianca has shuttered its already scaled-down Peruvian operations and worked to shrink its fleet further.
It remains unknown whether Avianca will succeed in its challenge of the court's decision to withhold the government funds, but the pledged financing is an important step in the airline's recovery process, as other Latin American airlines restructuring under Chapter 11 have gained approval for their financing packages.
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