Avianca: 'Our business may not succeed even if the re-profiling plan is successful'

Avianca Holdings stated (16-Aug-2019) it "may not succeed even if the re-profiling plan is successful and the stakeholder investment is consummated". Avianca Holdings added: "Our ability to be profitable or avoid a reorganisation under bankruptcy protection will depend upon several factors", including:

• Cost of fuel;
• Aircraft leases;
• Insurance and aircraft components and accessories;
• Market disruptions;
• Banking;
• Labour and pension fund regulations;
• Ability to control and reduce costs in the face of competitive pressures;
• Risks associated with foreign operations such as:
  • Currency exchange rate fluctuations;
  • Increases in foreign tax rates;
  • Imposition of tariffs;
  • Exchange controls or other restrictions;
  • General economic and political conditions;
  • Required compliance with a variety of foreign laws and regulations.

Avianca stated: "The ability to be profitable or avoid a reorganisation under bankruptcy protection will also depend on the successful implementation of the strategic plan to increase our operational efficiency and operating margins, to seek to grow by focusing on our core business and expanding service to new markets, mainly via strategic alliances, including the United Airlines-Copa Airlines agreement". Avianca Holdings added that if it is "unable to successfully implement such strategic plans, or if demand for our services does not continue as expected, or we are unable to control the costs described above, we may not be able to generate enough revenue to remain profitable, generate positive cash flow or avoid a reorganisation under bankruptcy protection or liquidation". [more - original PR]