Colombian courts throw a major wrench into Avianca’s restructuring

Premium Analysis

Back in May-2020 when Colombia's largest airline and one of South America's largest operators Avianca filed for Chapter 11 bankruptcy protection, CAPA concluded that it would be hard to fathom that Colombia would let its flag carrier simply disappear.

Eventually, Colombia's government did step up and offer Avianca a USD370 million loan that would be part of a larger financing package for the airline. But the government's support has now been temporarily suspended after a court challenge, creating new uncertainty for Avianca in its restructuring process.

The latest development occurs just as Colombia's commercial aviation industry is getting started again, and as flights slowly restart, Avianca remains the country's largest operator by a solid margin.

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