Avianca says US court approves bankruptcy reorganization plan

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A departing Avianca Airlines flight is seen on the tarmac during the reopening ceremony at Mons. Oscar Arnulfo Romero International Airport, as the spread of coronavirus disease (COVID-19) continues, in San Luis Talpa, El Salvador, on September 19, 2020. REUTERS / Jose Cabezas

BOGOTA, Nov. 2 (Reuters) – The Southern District of New York has approved the plan to reorganize Colombia’s Avianca airliner (AVT_p.CN), Avianca said on Tuesday, which will allow the company to complete its proceedings Chapter 11 bankruptcy before the end of the year. .

Avianca, along with Chilean rival LATAM Airlines, were the two largest carriers in the region before the coronavirus pandemic, but both were bankrupt when the virus disrupted air travel, amid particularly tight restrictions in Latin America.

Avianca had already suffered several years of losses before the start of the pandemic and suffered a coup in 2019 led by United Airlines.

“Avianca announces that today, after submitting certain additional documents that had been required by the court, the Southern District Court of New York upheld the company’s reorganization plan,” the company said in a statement since. Bogota.

“The airline hopes to complete this process and exit Chapter 11 before the end of the year as a financially stronger and more efficient airline.”

Avianca will have far less debt and more than $ 1 billion in cash by the end of Louisiana bankruptcy proceedings, the statement said.

The company plans to have 130 planes serving 200 routes by 2025, he added.

During the bankruptcy process, Avianca received around $ 2 billion in new funding.

Reporting by Julia Symmes Cobb in Bogota Editing by Matthew Lewis

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