CAPA Live: Avianca makes tough choices for long term success

Share

Avianca Holdings was just beginning to reap the benefits of a restructuring it undertook in 2019 when, in Mar-2020, the COVID-19 pandemic upended the global aviation industry.

And now Avianca and its large network peers in Latin America, LATAM Airlines Group and Aeromexico, have all been thrust into Chapter 11.

As it works to rightsize, Avianca is recognising that it and the industry need to make structural cost changes in order to withstand the next exogenous event, whatever form that may take.

Despite the long road to recovery, Avianca does believe that there is the potential to reach its pre-COVID-19 size in five years, and that more consolidation could emerge in Latin America.

Summary:

  • Avianca was making progress in a restructuring outside Chapter 11 before COVID-19 forced the company into a formal reorganisation.
  • The company could be up to 40% smaller as it works to rightsize in the current environment.
  • Avianca believes there is the possibility for some consolidation to occur in Latin America.
Share
Tags: ,