Avianca Is Becoming Smaller After Filing For Bankruptcy

Avianca has annouced today it will get rid of 14 aircraft as part of its current restructuring after filing for Chapter 11 bankruptcy in the US. The airline chose these airplanes considering their age, leasing conditions, and maintenance cost.

Avianca’s fleet will be smaller due to the current crisis. Photo: Rafael Luiz Canossa via Flickr.

Most of the airplanes are Airbus

According to FlightGlobal, 13 out of the 14 planes Avianca is looking at are Airbus. This includes two A330-300 (the last remaining in Avianca’s fleet), two A321, seven A320, and two A319. The lonely Boeing is a B787-8 Dreamliner. 

The oldest of these planes is one of the A319. It was assembled back in 2002, and Avianca leases it from AerCap. Meanwhile, the Dreamliner is the youngest at five years old and belongs to ORIX Aviation. 

Four of the planes operate with Avianca Ecuador, one with Avianca El Salvador, one with Avianca Peru, and the rest with Avianca Colombia.  

Currently, Avianca has an operating fleet of 156 jets, including 143 passenger and 13 cargo aircraft. Additionally, it has 15 turboprops, most of them operating with Avianca Express, the regional carrier it started this year. 

In 2019, Avianca sold 10 Airbus A318, and four A320 for $100 million. In January 2020, Avianca also sold 10 Embraer E190.

Last year Avianca closed its branches in Brazil and Argentina. Now it will be Peru. Photo: Rafael Luiz Canossa via Flickr.

Avianca is exiting Peru

Yesterday, Avianca issued a statement saying that it will stop its operations in Peru. It effectively means that Avianca Peru will cease to exist in the following months. The carrier said,

“In parallel to its Chapter 11 filing in the U.S., as previously announced, Avianca is commencing liquidation of its operations in Peru pursuant to local laws.”

This liquidation will allow Avianca to renew its focus on core markets: El Salvador and Colombia. 

Avianca Peru was founded in 1992. Its original name was TACA Perú and its hub was Lima International Airport. In 2019, Avianca had a 5.3% domestic passenger share among the airlines in the country, according to CAPA. It was the fourth most important airline in the country by July. 

The airline had previously stated its desire to exit Peru. For years, Avianca Peru was the country’s second-largest airline, behind LATAM Airlines Peru. But it steadily reduced its presence in the domestic market and pulled out from several hubs like Trujillo, Juliaca, and Puerto Maldonado. 

The low-cost model entered Peru in the last few years. Airlines such as Sky Airline and Viva Air Peru grew strong in the country while Avianca relinquished its share.

Avianca is still looking for the Government’s support. Photo: Rafael Luiz Canossa via Flickr.

The airline is still looking for state help

Avianca is currently looking for financial support from the governments of the countries where it operates. 

A couple of weeks ago, Adrián Neuhauser, Avianca’s CFO, said that the carrier needed investment from the Colombian Government to survive. He added that the airline was open to make the Government a shareholder.  

Yesterday, the carrier confirmed it is engaged in discussions with several governments in South America. It is asking them to provide critical additional liquidity to support the company during the Chapter 11 process. 

“In the interim, while these discussions are ongoing, the Company intends to utilize its cash on hand combined with funds generated from its ongoing operations (such as cargo), to support the business,” it said

Do you expect Avianca to get rid of more airplanes in the future? Let us know in the comments.