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Avianca says U.S. court approves bankruptcy reorganization plan -Breaking

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© Reuters. FILE PHOTO – A departure Avianca Airlines plane is seen on the Mons tarmac at the Mons reopening ceremony. Oscar Arnulfo Romero International Airport continues to be affected by the spread of coronavirus (COVID-19), in San Luis Talpa El Salvador.

BOGOTA (Reuters). The Southern District has approved Avianca, Colombia’s airline,’ Avianca announced Tuesday. It will permit the company to finish its Chapter 11 bankruptcy proceeding before the end.

Avianca and LATAM Airlines, a rival in Chile, were two of the largest regional carriers before the coronavirus pandemic. However, both companies were forced into restructuring bankruptcy after the virus made air travel impossible.

Avianca was already suffering from losses over many years prior to the pandemic. United Airlines led a Boardroom coup that saw Avianca become a profitable company in 2019.

“Avianca announced that today, having presented certain additional documentation required by court, the Tribunal of the Southern District of New York approved the company’s restructuring plan”, the company stated in Bogota.

“The airline hopes to complete the Chapter 11 process successfully and emerge from Chapter 11 prior the end of this year as an economically stronger and more efficient airline.”

The statement stated that Avianca would have substantially less debt when the bankruptcy proceedings are over and will have more liquidity than $1 billion.

According to the statement, 130 planes will be flying 200 routes for the company by 2025.

Avianca was able to receive approximately $2 billion of new funding during the bankruptcy proceedings.

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