Category Archives: Avianca (Colombia)

Avianca Holdings files for Chapter 11 reorganization, Peru to be shut down

Avianca Holdings, the parent of Avianca, has made this announcement:

Avianca Holdings S.A. and certain of its subsidiaries and affiliates on May 10, 2020 filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York to preserve and reorganize Avianca’s businesses. LifeMiles™, Avianca’s loyalty program, is administered by a separate company and is not part of the Chapter 11 filing.

The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association. Avianca’s scheduled passenger operations have been grounded since mid-March, reducing its consolidated revenue by over 80% and placing significant pressure on its cash reserves.

Through the Chapter 11 reorganization process, Avianca intends to:

  • Protect and preserve operations so Avianca can continue to operate and serve customers with safe and reliable air travel, under the strictest biosafety protocols, as COVID-19 travel restrictions are gradually lifted;
  • Ensure connectivity and drive investment and tourism by continuing as Colombia’s flagship airline, serving over 50% of the domestic market in Colombia and providing essential non-stop service across South America, North America and European markets as well as continuing cargo operations, playing a key role in the economic recovery of Colombia and the Company’s other core markets following the COVID-19 pandemic;
  • Preserve jobs in Colombia and other markets where the Company operates, with Avianca directly responsible for more than 21,000 jobs throughout Latin America, including more than 14,000 in Colombia, and working with more than 3,000 vendors; and
  • Restructure the Company’s balance sheet and obligations to enable Avianca to navigate the effects of the COVID-19 pandemic as well as comprehensively address liabilities, leases, aircraft orders and other commitments.

“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,” said Anko van der Werff, Chief Executive Officer of Avianca. “Despite the positive results yielded by our ‘Avianca 2021’ plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges.”

“When government-mandated air travel restrictions are lifted and we are able to gradually resume our passenger flights, we look forward to welcoming back our furloughed employees and playing a leading role in restarting the economy in Colombia and our other key markets. We greatly appreciate the dedication of our employees to Avianca and to serving the more than 30 million passengers that fly our airline each year. We remain committed to our purpose to connect people, families and businesses. Our customers can be confident that they can continue to depend on Avianca for safe, reliable and high-quality service, and our valued LifeMiles™ members can expect to accrue and redeem miles as normal,” Mr. Van der Werff continued.

Avianca – like many other airlines around the world, including in the United States, the European Union, and Asia as well as in Latin America – is seeking financial support from the governments of the countries where it provides essential services. Avianca continues to be engaged in discussions with the government of Colombia, as well as those of its other key markets, regarding financing structures that would provide additional liquidity through the Chapter 11 process and play a vital role in ensuring that the Company emerges from its court-supervised reorganization as a highly competitive and successful carrier in the Americas. In the interim, while these discussions are ongoing, the Company intends to utilize its cash on hand, combined with funds generated from its ongoing operations (such as cargo), to support the business during the court-supervised reorganization process.

Mr. Van der Werff added, “We believe that a reorganization under Chapter 11 is the best path forward to protect the essential air travel and air transport services that we provide across Colombia and other markets throughout Latin America. Avianca has operated for more than 100 years – only the second airline in the world to achieve this milestone. We are confident that through this process we can continue to execute our ‘Avianca 2021’ plan, optimize our capital structure and fleet of aircrafts and – with government support – emerge as a better, more efficient airline that operates for many more years.”

Measures to Protect Employees and Suppliers

As part of the process, Avianca has presented various motions before the Court in support of its reorganization and the Company expects the court to decide on these requests in the coming days. The Company has requested authority to pay certain prepetition employee wages, compensation and benefit obligations owed from before the filing date, as well as a request to continue paying wages and honoring employee benefit programs in normal day-to-day operations. Avianca has also requested authority to honor various prepetition obligations owed to certain of its travel agency partners, vendors and suppliers from before the filing date. The Company intends to pay vendors and suppliers, as well as travel agency partners in the ordinary course for goods and services provided on or after the filing date during its Chapter 11 process.

Continuing to Serve Customers

Avianca has also filed motions to maintain its network and customer programs throughout this process and customers can expect to continue to arrange travel and fly with Avianca in the same way they always have. Customers can expect to use tickets, vouchers and gift cards purchased before Avianca initiated this process. Avianca customers will continue to accrue miles when they fly with Avianca, and can continue to redeem miles earned through LifeMiles™ to purchase tickets with Avianca during this process. Additional frequent flyer benefits remain active, including access to VIP Lounges, priority check-in, upgrades and other benefits. Avianca also expects to continue to issue ticket refunds and honor travel coupons and payments or credits associated with baggage or service claims in adherence with our current policies. Given the impact COVID-19 has had on travel plans, Avianca will continue to waive change fees and other penalties associated with changes to customers’ travel plans for tickets purchased until October 31, 2020.

When COVID-19 travel restrictions are lifted, Avianca plans to resume passenger flights with the strictest biosafety protocols.

“Avianca 2021” Plan and COVID-19 Impact

Last year, Avianca successfully launched the “Avianca 2021” plan, and throughout 2019 and in the first two months of 2020, the Company had achieved significant positive results from this plan. Through the plan, the Company redesigned its network with 130 routes to 76 destinations in 27 countries, adding to the launch of a new pricing model “branded fares” in domestic markets in Ecuador and Colombia, including flights to and from Europe. These initiatives, along with customer-centric programs, had resulted in improved operational indicators, with a passenger-itinerary-completion rate of 98.7 percent and a 6-point increase in customer satisfaction. Consistent with the plan, in early 2020 the Company concluded a successful out-of-court reprofiling of its financial debt and lease obligations and raised $375 million in new financing.

However, just as is the case with other airlines around the world, Avianca’s operations have been dramatically impacted by the COVID-19 pandemic and resulting government-mandated air travel restrictions, while the Company continues to have high fixed costs. Of the total number of countries in which Avianca operates, 88 percent have total or partial passenger air transport restrictions, forcing the airline to take a series of extraordinary and structural measures. These have included employee furloughs, temporary wage reductions, reductions in non-essential capital expenditures and temporary deferred payments on long-term leases. Avianca has limited visibility as to when current travel restrictions will be lifted and, once such restrictions are lifted, it does not expect revenues to return to pre-pandemic levels in the short-term as the effects on travel are expected to be long-lasting. These factors, coupled with Avianca’s substantial financial obligations, made it necessary for Avianca to explore alternatives to reorganize its operations and restructure its debt.

Peru Operations

In parallel to its Chapter 11 filing in the U.S., Avianca intends to commence a wind-down of its operations in Peru pursuant to local laws. This decision supports essential right-sizing efforts and will allow Avianca to renew its focus on core markets upon emergence from its court-supervised reorganization.

Chapter 11 Process and Advisors

The Chapter 11 process is a well-established legal process in the United States of America that is recognized by other countries around the world. The process is a temporary one that, according to U.S. law, allows a company to reorganize and complete a financial restructuring under the supervision of the U.S. court system, while continuing its operations under the oversight of its board of directors and management team. Many companies, including many airlines, have used the Chapter 11 process to reorganize their financial obligations and emerge as stronger organizations. Avianca itself underwent a Chapter 11 process in 2003 that allowed it to position itself for expansion in Latin America.

To best position Avianca to successfully complete the Chapter 11 process, the Company’s Board of Directors has retained world-class advisors, including Seabury Securities LLC and FTI Consulting, which are serving as financial advisors to Avianca, as well as Milbank LLP, Smith, Gambrell & Russell, LLP, Gómez-Pinzón Abogados and Urdaneta, Vélez, Pearl & Abdallah Abogados, which are serving as legal counsel. The Company’s Board of Directors has also been advised by Willis Towers Watson, an independent compensation consultant, in the establishment of best-practices retention programs for certain employees who are essential to the Company’s Chapter 11 reorganization.

Avianca (Colombia) aircraft photo gallery:

Avianca starts Boeing 787 all-cargo flights

Avianca has made this announcement:

Amid the extraordinary situation facing the world by the spread of COVID-19, Avianca Cargo is providing uninterrupted freight transport service now with the support of aircraft and passenger crew, to contribute to the supply of food, medical equipment, toiletries, and medicines. Early today, a Boeing 787-8 Dreamliner aircraft, dedicated to passenger transport, made its first cargo flight, carrying nearly 20 tons of essential goods on each journey in its “belly.” With this flight, the cargo operation has already been transported 15,000 tons in the means of the crisis.

The flight took off at 01:30 local time in Colombia, with 4 pilots being part of Avianca and landed at John F. Kennedy International Airport at 07:30 hours. The cargo was carried at the bottom deck of the aircraft, the section dedicated to this purpose.

To operate this flight full of cargo, but with empty seats, it was necessary to take additional measures for the care and protection of onboard and ground personnel. The company established protocols to minimize physical contact, as well as provided cleaning kits and protective items to employees, antibacterial gel, gloves, and digital thermometers to the crew and staff members who have contact and are exposed to the public. Also, it has delivered alcohol and towels for cleaning keyboards and accessories in the offices and carried out additional disinfection work in bathrooms and offices of the cargo terminals.

Avianca Cargo currently has six Airbus A330-200F freighters, plus five aircraft from its affiliated company AeroUnion, three A300-600s, and two Boeing 767-200s. The fleet of this operation serves the international market covering Dallas/Fort Worth, Los Angeles, Chicago, New York, Miami, Madrid, Brussels, and major Latin American cities.

From March 16 to the 22 alone, Avianca Cargo mobilized more than 6 million kilograms of cargo. Of this volume, 600 tons were food such as fish, fruits and vegetables, and another 250 tons of medicines, medical equipment, and toiletries. These volumes were achieved thanks to the operation of 138 freighter flights, of which 3 were charter service, supplemented by the capacity of the bellies of 720 passenger flights before the operation was restricted.

Avianca aircraft photo gallery:

Avianca suspends international operations, reduces domestic operations, grounds 132 aircraft

Avianca (Colombia) made this announcement:

As is public knowledge, most countries around the world have closed their borders, limiting mobility for domestic and foreign passengers in the region. This situation directly affects Avianca’s capacity to maintain its operation.

Therefore, starting at 00:00 hours on March 23, all international operations will be suspended and domestic operations in Colombia will be reduced by 84%. These decisions are complicated and painful for Avianca and its employees whose main purpose is to connect passengers to and from Latin America. Below are details of the actions that will be implemented:

1. Complete suspension of the international operation and reduction of domestic operation in Colombia by 84%: 

As of March 23 at 00:00 hours and until April 30, Avianca will fully suspend its international operation.  The domestic operation will include service from Bogota to capital cities and some regions. The above will be subject to the evolution of the situation, availability and willingness of clients to travel and additional measures that may be taken by local and national governments that affect the operation.

Therefore, flight scheduling may change on a daily basis and passengers will be informed when this happens. Avianca will inform changes through the Covid-19 website and other channels: Avianca Escucha @AviancaEscucha, email, Whatsapp for clients of the Diamond and Gold loyalty program and Avianca News Center.

The company will also be forced to ground 132 aircraft: 22 wide-body, 100 narrow-body and 10 ATRs. Avianca will use 5 Airbus A320s and 5 ATRs for its domestic operation.

2. Labor Measures

This unprecedented global situation for the airline industry requires difficult and immediate decisions as a result of the reduction of its operation. The following measures will be implemented starting today:

  • Hiring freeze.
  • Implementation of voluntary unpaid leave.
  • Negotiation of payment conditions with suppliers and partners.
  • Extension of non-essential costs and capital expenses.

3. Financial measures: cost control, savings and suspension of investments:

All investments, expenses or projects not tightly linked with maintenance and the domestic operation, as well as travel and events, will be suspended. Additionally, Avianca is negotiating with various partners to decide upon next steps.

“This is, without a doubt, the greatest crisis for the airline industry in history. The decisions we are taking not only hurt us, they are extremely difficult, but we must be flexible and face the situation. The full suspension of our international operation and the strong contraction of domestic demand, forces us to send most of our employees home. It is time for regional governments to take exceptional measures that mitigate the social and economic impact affecting hundreds of industries. If we want to reconnect Latin America and preserve the more than 20.000 jobs we create, we will need joint cooperation and collaboration of industry stakeholders and above all, the support and cooperation of governments”, said Anko van der Werff, President and CEO of Avianca Holdings.

During this situation, Avianca has cooperated with governments and embassies for foreign nationals in Colombia and other countries to return to leave the country and return home.

Avianca aircraft photo gallery:

Avianca Holdings announces fleet plan optimization

Avianca Holdings has made this announcement regarding its future fleet plans:

As part of the implementation of the “Avianca 2021 Plan”, Avianca management has reached the following agreements to tailor its aircraft commitments to its future requirements:

  • In cooperation with Airbus, the Company has reduced its firm commitments to 88 A320neo aircraft (from 108)
    • Previously scheduled firm A320neo family deliveries in 2020 through 2024 have been deferred or cancelled
    • The 88 remaining commitments are now scheduled for delivery in 2025 through 2028 (20 per year) with the balance in 2029 (8)
    • These agreements provide comprehensive financial benefits, with significant Capex reduction in the period through the end of 2024
  • Separately, Avianca has agreed to enter into 12-year operating leases for up to 12 A320neo aircraft with BOC Aviation
    • Deliveries to occur after 2023, consistent with the Avianca 2021 plan
  • Finally, Avianca reached a mutually beneficial agreement with Boeing with regards to the outstanding 787-9 deliveries

CFO Adrian Neuhauser said “The completion of these three major aircraft transactions, coupled with the recently completed financial reprofiling and securing of $375 million of new long-term capital financing, places Avianca in a solid position as it moves forward with the Avianca 2021 Plan.”

Avianca aircraft photo gallery:

Avianca Holdings completes its financial reprofiling and secures USD $375 million in new financing

Avianca has made this announcement:

Avianca Holdings S.A. has successfully renegotiated substantially all of its debt and lease obligations as well as reached agreements with its key suppliers. As a result, the airline was able to complete the funding of USD $250 million in mandatorily convertible loans by United Airlines, Inc. and an affiliate of Kingsland Holdings Limited. In addition, Avianca announced that it has secured an incremental USD $125 million of committed financing.

Completion of the Balance Sheet Reprofiling Program
Avianca successfully reached broad agreement with its creditors last week, allowing it to comply with key conditions precedent for funding of the Convertible Loans by United and Kingsland. In turn, the funding of the Convertible Loans allowed Avianca’s agreements with its creditors to go effective, reprofiling substantially all of its loans and aircraft lease obligations. In addition, funding of the Convertible Loans triggers the automatic exchange of approximately USD $484 millionaggregate principal amount of Avianca’s current May 2020 bonds (the “Secured May 2020 Bonds”) for secured bonds due May 2023 (the “Secured May 2023 Bonds”), under the terms of a previously announced, successfully executed exchange offer for Avianca’s original May 2020 Bonds (the “Unsecured May 2020 Bonds”).

Avianca’s finance team, led by its CFO, Adrian Neuhauser, successfully negotiated with more than 125 creditors and suppliers over the course of the financial reprofiling process launched in late June 2019.  In addition to securing extensions of Avianca’s bank lines and letters of credit and ensuring the exchange of over 88.1% of the Unsecured May 2020 Bonds for Secured May 2023bonds, the reprofiling program secured more than USD $250 million of additional cash relief from lessors, aircraft lenders and certain other corporate lenders, substantially strengthening the Company’s liquidity position.

Funding of USD $250 million of Financing
Avianca today received the previously-announced USD $250 million of committed financing from United and Kingsland. This financing consists of USD $250 million of Convertible Loans that mature in four years and with a 3% payment-in-kind (PIK) annual interest rate.  United funded USD $150 million and Kingsland funded USD $100 million. United and Kingsland’s Convertible Loans are convertible into the Company’s equity (common shares or preferred shares at the lenders’ option).

The Convertible Loans are subject to mandatory conversion any time after the first anniversary of the loan at the election of Avianca, subject to Avianca meeting certain conditions precedent, including, but not limited to: (i) a trailing six-month average daily ending cash balance (subject to certain adjustments) of at least USD $700 million and (ii) the AVH ADS trading price of at least USD $7.00 for 90 of the prior 120 trading days.

Additional USD $125 million of Financing Commitments 
Avianca announced today that, in addition to funding the Convertible Loans, it has secured USD $125 million financing commitments, in all cases subject to the satisfaction of certain closing conditions:

  • Avianca secured today USD $50 million in commitments –from a group of Latin American investors– to invest in convertible loans on substantially the same economic terms as the United/Kingsland Convertible Loans. Such loans shall convert into AVH preferred shares or ADRs.
  • Avianca also secured USD $75 million in commitments for senior secured convertible loans and bonds that are intended to provide liquidity to Avianca as a bridge to completion of a planned convertible bond offering to preferred shareholders of at least USD $125 million (see details below). These loans and bonds may be converted into AVH preferred shares or ADRs. Citadel will provide USD $50 million of such commitments.

Future Offering to AVH Preferred Shareholders
As previously disclosed, Avianca Holdings expects to offer its preferred shareholders the opportunity to participate in a minimum of USD $125 million of to-be-offered convertible bonds (the “Incremental Bonds”) during the first quarter 2020 under similar conditions to those established for the Convertible Loans, subject to adjustment for market conditions at the time such an offering is launched.  Details and timing of such offering will be made available to AVH preferred shareholders, subject to applicable regulatory review and approvals.

Key Stakeholder Support
Anko van der Werff, Avianca’s CEO, commented: “Today’s announcement coincides with Avianca’s 100-year anniversary and marks an important turning point for our Company as we achieve a critical key milestone of the Avianca 2021 Plan.  The trust placed in us by our creditors and business partners has enabled us to further execute on that Plan which will strengthen our financial and competitive position.  I would like to share my sincere appreciation to all of Avianca’s employees for their hard work and dedication, as well as to United and Kingsland for their support throughout this process.

We are incredibly excited about the future, and we remain focused on strengthening Avianca’s operating margins by controlling expenses, while exceeding our customers’ service expectations.”

Mr. Neuhauser added: “We are grateful for the support of our financial and commercial partners and the confidence they demonstrated by embracing our Company’s reprofiling program.  That support has enabled us to reach agreements with all key stakeholders that benefit all parties.

In addition, we are incredibly excited by the fact that, as a result of the successful reprofiling –and of Kingsland and United’s agreement to fund the Convertible Loans– we were able to, in a very short time period, raise incremental commitments for USD $125 million, underscoring the strength of our plan and further bolstering our liquidity.”

John Gebo, Senior Vice President, Alliances for United Airlines, Inc. said: “United Airlines, along with Kingsland, is very pleased to provide this permanent capital financing that enables Avianca to complete a highly successful reprofiling of its capital structure, the exchange of its 2020 bonds, and the securing of commitments for additional financing which, taken together, underpin and support the Avianca 2021 Plan.  That Plan calls for a comprehensive transformation of Avianca’s operational and profit performance led by Anko and Adrian.  We have every confidence they will deliver on the promising outcomes of that Plan, and we wish them and the whole Avianca family every success on that journey.”

Roberto Kriete, President of Kingsland Holdings, stated: “The fact that Avianca’s new management led by Anko and Adrian were able to successfully carry out the reprofiling speaks very highly of their sense of urgency and their execution abilities.  It marks a before and after in Avianca’s 2021 Plan.  Now with Avianca in a more stable financial position, the airline will be able to focus on the traveler and continue to accelerate its evolution into Latin America’s most beloved and profitable airline.”

Avianca aircraft photo gallery:

SMBC Aviation Capital delivers the first Boeing 787-9 to Avianca

SMBC Aviation Capital has announced the delivery of one Boeing 787-9 aircraft (N797AV, msn 43983) equipped with Trent 1000 engines to Avianca.

This aircraft is the first delivery of a three Boeing 787-9 sale and lease back PDP financed transaction with the airline. The second and third aircraft are expected to be delivered in 2021

Avianca Airlines enters its 100th year of uninterrupted operation, will expand in Europe

Avianca (Colombia) Boeing 787-8 Dreamliner N780AV (msn 37502) LHR (SPA). Image: 940718,

Avianca has made this announcement:

In 2019 Avianca Airlines, the only airline which connects directly London with Bogota, will celebrate its 100-year anniversary. It ratifies its position as the oldest airline in the Americas and the oldest in the world with uninterrupted operations.

In order to lay the foundations for the next century, Avianca wants to increase its presence in Europe and continue to offer an exceptional experience to its customers supported by the best technology available. “We are evaluating the possibility of adding a second frequency to London in the near future,” says Hernan Rincon, CEO and Executive President of Avianca Airlines. “Regarding new destinations, Zurich looks attractive as the next destination in Europe due to its location at the center of Europe. Moreover, the airline is also considering Rome and Paris,” added.

Avianca Airlines maintains a strong presence in Europe through different actions:

New Boeing 787: On October 2018, Avianca received its thirteenth Boeing 787, which it uses exclusively for flights to Europe. Its fleet is one of the newest in The Americas – seven years old on average- and all its flights to this continent are operated on Boeing 787, one of the most modern aircraft in the world. This aircraft can accommodate 250 passengers, 28 in business class and 222 in economy class. Its revolutionary design, together with cutting edge technology, reduces the effects of fatigue and jet lag. In addition, it has an innovative in-flight entertainment system, which has been recognized as the best in Latin America. All together contributing to an exceptional experience.

Route network: From Bogota, Avianca’s main hub, European passengers have access to more than 100 destinations within the Americas such as: Cusco in Peru, Galapagos in Ecuador, San Jose in Costa Rica, Medellinand Cartagena in Colombia, among others. On November 17th, the airline inaugurated the route MunichBogota. The carrier is the first Latin American airline to operate at this airport.

Avianca Airlines transported more than 1 million passengers between Europe and Colombia in 2018.

Top Copyright Photo (all others by the airline): Avianca (Colombia) Boeing 787-8 Dreamliner N780AV (msn 37502) LHR (SPA). Image: 940718,

Avianca aircraft slide show:

Below Copyright Photo: Avianca Colombia Boeing 747-124 HK-2000 (msn 19734) MIA (Bruce Drum). Image: 102771.

AV on the tail - Best Seller

Below Copyright Photo: Avianca Colombia Boeing 720-059B HK-726 (msn 18831) MEX (Jacques Guillem Collection). Image: 940592.

Named "Narino", delivered on April 8, 1965 - Best Seller

Route Map (in Spanish):

United Airlines expands partnership with Copa Airlines and Avianca

United Airlines Boeing 777-224 ER N78017 (msn 31679) (Star Alliance) LHR (Keith Burton). Image: 944609.

United Airlines today announced it has reached an agreement with Compañía Panameña de Aviación S.A. (Copa Airlines), Aerovías del Continente Americano S.A. (Avianca) and many of Avianca’s affiliates, for a joint business agreement (JBA) that, pending government approval, is expected to provide substantial benefits for customers, communities and the marketplace for air travel between the United States and 19 countries in Central and South America.

Many more choices for customers

By integrating their complementary route networks into a collaborative revenue-sharing JBA, United, Avianca and Copa plan to offer customers many benefits, including:

  • Integrated, seamless service in more than 12,000 city pairs
  • New nonstop routes
  • Additional flights on existing routes
  • Reduced travel times

Drive economic benefits for consumers and the communities we serve

The carriers expect the JBA to drive significant traffic growth at major gateway cities coast to coast, which is expected to help bring new investment and create more economic development opportunities. Further, the JBA is expected to provide customers with expanded codeshare flight options, competitive fares, a more streamlined travel experience and better customer service, resulting in significant projected consumer benefits.

Better serve our customers

Additionally, allowing the three carriers to serve customers as if they were a single airline is expected to enable the companies to better align their frequent flyer programs, coordinate flight schedules and improve airport facilities.

“This agreement represents the next chapter in U.S.-Latin American air travel,” said Scott Kirby, United’s president. “We are excited to work with our Star Alliance partners Avianca and Copa to bring much-needed competition and growth to many underserved markets while providing a better overall experience for business and leisure customers traveling across the Western Hemisphere.”

“We are delighted to further solidify our existing partnership with United Airlines and look forward to increasing service options for our customers by working more closely with Avianca,” said Pedro Heilbron, Copa Airlines’ chief executive officer. “We believe this agreement benefits our passengers by providing competitive fares and a superior network of more than 275 destinations throughout Latin America and the U.S., and promotes further growth and innovation within the airline industry in the Americas.”

“We are certain that together we are stronger in the United StatesLatin America market than any of the three airlines individually,” said Hernan Rincon, Avianca’s executive president – chief executive officer. “This partnership will allow Avianca to strengthen its position as a first-level player in the airline industry in America as we will expand our scope in the continent with United and Copa, offering better connectivity to our customers.”

JBAs drive competition that benefits customers

Although JBAs have been proven around the world to benefit consumers and enhance competition, currently 99 percent of the U.S. carrier passenger traffic that makes connections in Central and South America does so without a JBA. Competition in the U.S.-Latin American market has grown and includes a diverse set of carriers offering service across multiple price points. Yet the market lacks a comprehensive revenue-sharing, metal-neutral network of carriers and the associated heightened competitive forces that drive value and better consumer experiences. The JBA represents an innovative, best-in-class new product offering that will make competition in this robust market even stronger.

“Our analysis shows that a metal-neutral JBA among United, Copa and Avianca will provide substantial benefits to consumers traveling between the relevant countries,” said Dr. Darin Lee, executive vice president of economic consulting firm Compass Lexecon and airline industry expert. “This JBA will enable United, Copa and Avianca to compete more effectively, offer competitive fares, and increase service, encouraging innovation and establishing a more robust and vibrant marketplace.”

To enable the deep coordination required to deliver these benefits to consumers, communities and the marketplace, United, Copa and Avianca plan to apply in the near term for regulatory approval of the JBA and an accompanying grant of antitrust immunity from the U.S. Department of Transportation and other regulatory agencies. The parties do not plan on fully implementing the JBA until they receive the necessary government approvals. The JBA currently includes cooperation between the U.S. and Central and South America, excluding Brazil.  With the recently concluded Open Skies agreement between the U.S. and Brazil, the carriers are exploring the possibility of adding Brazil to the JBA.

Top Copyright Photo (all others by the airlines): United Airlines Boeing 777-224 ER N78017 (msn 31679) (Star Alliance) LHR (Keith Burton). Image: 944609.

United aircraft slide show (Boeing):

Avianca to fly from Bogota to Chicago

Avianca (Colombia) Airbus A319-132 WL N690AV (msn 5944) FLL (Bruce Drum). Image: 104656.

Avianca (Colombia) on November 17, 2018 will launch the Bogota – Chicago (O’ Hare) route. According to Airline Route, the new route will operate four days a week with Airbus A319s.

Copyright Photo: Avianca (Colombia) Airbus A319-132 WL N690AV (msn 5944) FLL (Bruce Drum). Image: 104656.

Avianca aircraft slide show: