Wednesday , January 27 2021

Avianca Brazil announces bankruptcy | economy

The airline Avianca Brasil, the fourth largest of the South American giant, has demanded on Tuesday that Brazilian justice should benefit from bankruptcy protection. If it is not available, the company warned that by December 31 it could stop serving 77,000 passengers who had already bought their tickets. The indebtedness that the airline accrues can lead, according to documents, to which Reuters agrees, with the embargo of up to 14 aircraft from its fleet. The process now falls into the hands of the First Bankruptcy and S Courtãor Paulo.

Avianca Brazil, formerly Oceanair, blames its declaration of bankruptcy for high fuel costs and demands that threaten part of the planes. Last week, the company was forced by Brazilian justice to return 11 aircraft from its fleet to the Irish Constitution Aircraft, a subsidiary of American Aircastle, after failing to pay for the rent. Avianca Brasil's total debt is estimated at about $ 125 million, and its creditors include the Brazilian semi-state oil company Petrobras and the airport Guarulhos, c SãPauloThe airline covers both internal and external routes with about 60 aircraft. About 26 of these – and 52 engines – weigh the lawsuits.

The airline is independent of Colombian Avianca Holdings, although it belongs to the same owner, the Brazilian businessman German Efromovich and his group Synergy. After the petition for bankruptcy became known, Avianca Holdings' shares reacted in minutes – with a collapse of nearly 20% on the Colombian stock exchange, but they resumed all day until close to the opening.

Sources close to the Colombian airline said in a statement by EL PAÍS that Avianca Brasil's situation should not affect Avianca Holdings because they do not share planes or companies but only commercial use of the name by agreement. "Oceanair is an independent company of Avianca Holdings and therefore does not consolidate financial statements with Avianca Holdings or any of AVH's subsidiaries," the company said in a statement shortly afterwards.

Avianca Holdings, the world's second-oldest airline after Dutch KLM, is already experiencing a debt restructuring chapter at the turn of the century before being acquired by Efromovic. He then also submits to the defense of Chapter 11 of the United States Insolvency Act. Then, after its merger with the Central American, it began a period of strong growth that allowed it to face other Latin American giants like Latam or Aeromax.

Earlier this month, United Airlines, United Airlines, announced an alliance with Avianca and Copa de Panamá to integrate services and revenue sharing. The agreement, with the approval of the regulators, will allow passengers to fly in each of the companies as if they were just one airline.

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