Category Archives: Avianca

Avianca Holdings, United Airlines And Kingsland Holdings agree to terms for loan to be provided to Avianca

Avianca (Colombia) Boeing 787-8 Dreamliner N780AV (msn 37502) LAX (Ron Monroe). Image: 947817.

Avianca Holdings has reached agreement with United Airlines and Kingsland Holdings S.A. regarding the terms of United and Kingsland’s proposed financing to AVH of up to US $250 million, and established the conditions precedent to the transaction.

United and Kingsland have agreed to provide Avianca a four-year loan at an interest rate of 3%; interest will be paid-in-kind until maturity, granting Avianca greater financial flexibility. The loan will convert into shares at Avianca’s option –at an equivalent price per share of US $4.6217, representing a 35% premium over the 90-day weighted average price through October 3, 2019– subject to certain conditions, including AVH’s share price consistently trading above seven dollars; the loan may also be converted into shares voluntarily at the discretion of United Airlines and Kingsland Holdings. The financing will be secured by a pledge of stock in AVH’s major subsidiaries.

Drafting of final documentation is ongoing and is expected to be executed by mid-October. Funding remains subject to certain other conditions, including the successful conclusion of Avianca’s debt reprofiling plan in a manner consistent with the Avianca 2021 plan, as well as the closing of the company’s exchange offer for its US$550 million 2020 bond.

Avianca continues to work on quickly finalizing negotiations with its creditors and fulfilling the conditions necessary to conclude the bond exchange offer, in order to expeditiously close the stakeholder loan.

Once this process is concluded, Avianca expects to offer its preferred shareholders the opportunity to participate in US $125 million financing under similar conditions.

Top Copyright Photo: Avianca (Colombia) Boeing 787-8 Dreamliner N780AV (msn 37502) LAX (Ron Monroe). Image: 947817.

Avianca aircraft slide show:

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Avianca advances the execution of its 2021 strategy

Avianca has made this announcement:

Under its “Avianca 2021” strategy, the new management of Avianca Holdings is rapidly advancing in the execution of a plan to strengthen the company’s competitiveness and accelerate necessary financial adjustments.

One of the fundamental pillars of the plan is operational efficiency. Since November of last year, the company has begun a systematic effort to improve punctuality, achieving measurable improvement. It will continue to make changes in itineraries, routes, schedules and frequencies and, working with the Colombian aeronautical authority, simplify its operation and provide a better service to customers.

Roberto Kriete, Chairman of the Board of Directors stated: “Supported by Kingsland, which since May 24 assumed control of the company, and with the know-how of United, strategic partner of Avianca, we will continue to make decisions that recover and strengthen the confidence of our clients and investors.” He stressed that the Avianca 2021 plan reclaims the essence of the company: “We are, first and foremost, an airline.”

In parallel, the new Chief Financial Officer (CFO) of Avianca Holdings, Adrian Neuhauser, who will lead the financial execution of the “Avianca 2021” plan, has met with various strategic partners of the airline. According to Neuhauser, “the goal of the 2021 strategy for Avianca Holdings is to achieve sustainable and competitive growth, doubling current operating margins while maintaining disciplined capital investments, generating consistent cash flow that would achieve conservative leverage levels by 2021. In the immediate term, the re-profiling of our debts is essential to ensure adequate liquidity. ”

The new administration trusts that with the decisions that have been made and a coherent and professional execution of the plan, Avianca´s strategic, commercial and financial allies will support the company in achieving the required adjustment and re-profiling of its obligations. “Negotiations are being held in a positive context and we have found that both financial institutions and our suppliers are receptive. At this historic juncture for Avianca, it is essential to ensure their confidence in us while we decrease our leverage and improve profitability. We aim to be more competitive while we continue delivering the best service to our customers, ” said Neuhauser.

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 firms up its order for 100 Airbus A320neo Family aircraft

Airbus (Toulouse) has issued this statement:

Airbus logo (large)

Following a Memorandum of Understanding (MOU) announcement in February, Avianca (Bogota) has signed a purchase agreement for 100 A320neo Family aircraft, the largest single order ever made in Latin America’s aviation history. The agreement, which includes A319neo, A320neo and A321neo aircraft (below), will allow Avianca to maintain one of the youngest fleets in the region as the airline aims to replace airplanes currently operating from their Bogota, Lima and San Salvador hubs.

Avianca A320neo and A321neo (Flt)(Airbus)(LRW)

Image Above: Airbus.

Avianca (2013) logo

Established in Colombia in 1919, Avianca was the first airline in the Americas, and is the second oldest airline in the world. The Airbus-Avianca partnership was taken to a new level in 1998 when TACA (now part of Avianca), LAN, and TAM placed a joint order for 90 single-aisle aircraft. This was the largest joint contract ever signed in Latin American commercial aviation history. To date, the Avianca airline group has ordered nearly 300 aircraft including 276 A320 Family (among them, 133 A320neo Family) and 15 A330 Family.

To date, the A320neo program has 345 firm orders from six customers in Latin America — Avianca, Azul, Interjet, LATAM Airlines Group, VivaAerobus and Volaris. With more than 950 aircraft sold and a backlog of nearly 500, more than 550 Airbus aircraft are in operation throughout Latin America and the Caribbean. In the last 10 years, Airbus has tripled its in-service fleet, while delivering more than 60 percent of all aircraft operating in the region.

Top Copyright Photo: Jay Selman/AirlinersGallery.com. Avianca will remain an Airbus A320 Family operator. Current generation Airbus A320-214 N724AV (msn 6153) climbs away from Miami International Airport (MIA).

Avianca (Colombia) aircraft slide show: AG Airline Slide Show

AG Staff Photographers in every part

Avianca brings the Boeing 787 to Sao Paulo, outlines its upcoming 787 routes

Avianca (Colombia) (Bogota) landed for the first time in Guarulhos Airport in Sao Paulo on February 11 at 6:50 am. Coming from Bogota, Colombia, the aircraft is one of two that will make four daily flights between the two cities.

Avianca recently received four Boeing 787s, a total of 15 to be delivered over the next three years. The four new aircraft will serve routes that include, in addition to São Paulo and Bogota, Buenos Aires, New York, Santiago (Chile), Mexico, and, from June, Madrid, Barcelona and London (Heathrow).

Copyright Photo: Steve Bailey/AirlinersGallery.com. N780AV (msn 37502) was delivered on December 17, 2014.

Avianca aircraft slide show: AG Airline Slide Show

AG Pick the best shots

Avianca takes delivery of its first Boeing 787

Avianca (Colombia) (Bogota) and Boeing (Chicago, Seattle and Charleston) celebrated the delivery of the first 787 Dreamliner for the Latin American carrier. The pictured Boeing 787-8 Dreamliner N780AV (msn 37502) was handed over to the carrier today (December 18).

Avianca’s Boeing 787-8 will carry 28 passengers in business class and 222 in economy class. Passengers in both classes will also experience cabin environment improvements made possible on the 787 such as dynamic LED lighting, the largest windows, bigger overhead bins, a lower cabin altitude, a more humid environment, low interior noise, cleaner air and a smoother ride.

With 95 years in operation, Avianca is working to fly a younger fleet than ever, flying with leading-edge technology to 24 destinations in Colombia and 98 destinations in South America, North America and Europe.

To date, 58 customers have ordered 1,055 787s, making the Dreamliner the fastest-selling twin-aisle airplane in Boeing history.

Copyright Photo: Steve Bailey/AirlinersGallery.com. N780AV lands at Paine Field after a test flight.

Avianca aircraft slide show:

Video: A test flight at Paine Field near Everett:

Avianca to resume Bogota-London flights, grounds its Fokker 50s

Avianca (Colombia) (Bogota) has announced it will resume regular service between Bogota and London (Heathrow) in July. Airbus A330s (above) are expected to be operated on the restored route.

In other news, the company has also announced its has temporarily grounded its remaining Fokker 50s. The company issued this statement:

“In line with the fleet renovation and modernization plan, Avianca S.A. is in the process of renewing its regional fleet by replacing the Fokker 50s with ATR 72-600 aircraft. The company currently operates a combined turbo prop fleet, consisting of four F okker 50s and four brand new ATR 72s.

In spite of the high technical standards and strict preventive maintenance processes, the company has in place, on January 28, a malfunction on one of the engines of a Fokker 50 operating on the Cali-Tumaco route before take-off. After performing all the proper inspections and going through all the safety procedures, Avianca S.A. has taken the preventive decision to temporarily ground its Fokker 50 fleet.

This preemptive security measure will allow Avianca S.A. and the engine manufacturer Pratt & Whitney to establish the causes of the event, and implement the necessary corrective measures that will guaranty the aircraft ́s operational reliability.”

Copyright Photo: Bruce Drum/AirlinersGallery.com. Airbus A330-243 N948AC (msn 948) rotates off the runway at Miami International Airport (MIA).

Avianca (Colombia): AG Slide Show