On Sunday, the 10th of May 2020, the Bogota, Columbia-based Latin America’s second-largest airline, Avianca Holdings, formed a decade earlier by the merger of Avianca and TACA airlines of El Salvador, had filed for a bankruptcy protection in New York, as a $65 million bond payment has been closing in, but the Columbian Government had turned a deaf ear to repeated pleas for aids of the Avianca Holdings aimed at weathering a withering pandemic storm which has been pouring scorns over the aviation industry across the globe.
As a matter of fact, had the Columbian airline been failed to come out of the bankruptcy, it would mark up the first downfall of a major aircraft carrier due to the tremendous extent of pressure stemmed from the pandemic, which had already led to a 90 per cent decline in air traffics across the world.
Aside from that, adding further strains on to the Latin America’s second-largest aviation industry titan, Avianca had not carried out a single flight since late-March and a majority of its 20,000 employees had been on an unpaid leave, which had made the Columbian airlines more vulnerable to a bankruptcy.
On top of that, Avianca, the 101-year-old aviation industry giant, which had reported a 20 per cent rise in debts last year on an annualized basis to $4.9 billion, has been facing off a $65 million in bond payments due on Sunday (May 10th) that several analysts said the long-hailed aviation industry giant had been in no position to pay off.
Amid such pessimistic outlook on Avianca’s growing debt-piles with repeated urges for Government aids remained unheard, one of the oldest airlines in the world had filed for a Chapter 11 bankruptcy protection in New York adding it would continue to operate throughout the bankruptcy proceedings in the hopes of a possible rescue, as it was saved back in the 2000s from near-bankruptcy by a Bolivian-born oil entrepreneur, German Efromovich, who had been blocked out of Avianca management board last year following a boardroom coup, but was still holding a controlling stake of the airline.
Nevertheless, Efromovich said in an interview with a press agency following the bankruptcy filing on Sunday (May 10th) that he strongly disagreed with Avianca board’s decision to go for a bankruptcy protection and played no part in the proceedings.