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Colombian airline Avianca (AVH) filed for Chapter 11 bankruptcy in the US Southern District of New York on Sunday, laying blame on its collapse on the “unforeseeable impact of the Covid-19 pandemic,” according to a company statement.
Avianca, which was initiated in 1919, professes to be the world’s second-oldest continuously running airline. As of the end of last year, it was the third-largest airline in Latin America based on market share, after Chile’s LATAM Airlines (LTM) and Brazil’s GOL Linhas Aéreas (GOL), according to Euromonitor.
*The carrier is also part of the Star Alliance, the industry group that includes other big players such as Lufthansa (DLAKY) and Singapore Airlines. Last year, a holding company affiliated with United Airlines (UAL) bought a majority stake in Avianca.*
Avianca is the latest major airline to surrender to the loss of business from the pandemic, which has caused bearers to rip up their flight schedules, ground planes and put staff on non payable leave.
The attempt to file for bankruptcy was made with the intention to “protect and preserve operations” as the escalation continues, it said. Avianca directly employs 21,000 people throughout Latin America, including more than 14,000 in Colombia, where it serves as the country’s national carrier.
In insertion to gaining bankruptcy protection, the company plans to shut down its business in Peru to cut costs and “renew its focus on core markets.”