Tag Archives: Avianca

Avianca to launch 23 new international routes

Avianca (Colombia) Airbus A320-214 N755AV (msn 7437) FLL (Andy Cripps). Image: 954691.

Avianca made this announcement:

After inaugurating 6 domestic and international routes this year: Medellín-Cancun, Medellín-Punta Cana, Miami-San Jose, San Salvador-Ontario, Cali-Orlando, and Pereira-Santa Marta, with excellent performance, Avianca continues expanding its network – one of the strongest in Latin America and Colombia – by launching 23 new international routes until 2022.

Countries with the greatest growth as a result of these new direct flights will be Colombia, Ecuador, Costa Rica, Guatemala, and El Salvador.

  • 13 new routes to continue connecting Colombians with the world. 

The airline increases its direct flight offer considerably from various regions in the country – Cali, Medellin, Bucaramanga, among others – where airports and operations are more efficient and offer a consistent and timely service to passengers.

From Colombia, travelers will continue enjoying the robust itinerary offer and will now have 13 new direct routes from Cali to New York, Cancun, Mexico City, San José, and Quito; from Medellín to Aruba, Mexico City, Orlando, San Jose, Quito, and Guayaquil; from Bucaramanga to Miami, and also Bogotá will have a new direct flight to Toronto, Canada.

Despite this challenging situation, Avianca has the firm conviction of maintaining its competitive position in Bogota and working jointly with authorities and carriers to provide their customers with a quality service.

  • From Ecuador, more direct flights to the United States and Colombia 

Customers in Ecuador will enjoy direct flights from Quito to New York, Miami, Cali, and Medellin; as well as from Guayaquil to New York, Miami and Medellin.

  • Costa Rica, pure life to easily travel to the United States, Mexico, Nicaragua, and Colombia. 

The Hollywood Walk of Fame, the Statue of Liberty, Mexico’s and Colombia’s gastronomical variety, will be a few hours away from Costa Rica thanks to Avianca’s direct flight from San Jose to Managua, Los Angeles, New York, Mexico City, Cali, and Medellin.

  • Guatemala City will be only 4 hours away from the capital of the United States thanks to direct flights to Washington. 
  • Avianca will have resumed by the end of the year 91% of its direct routes in El Salvador. In addition to the El Salvador-Ontario route announced in July, Avianca will also have a direct flight to Orlando, the main tourist destination in the United States.

After presenting the Reorganization Plan, as well as ensuring US 1,600 million in commitments to finance its exit from Chapter 11, the company moves forward with reconfiguring its aircraft and will also offer a greater number of seats per plane, all new, and will strengthen its “Tailor-Made Travel” program for passengers to pay only for what they really need.

Avianca continues consolidating itself as the airline with more routes and available seats connecting Latin America directly, ever stronger and with more accessible prices for everyone to enjoy the 99 routes in the network, more than 2,680 weekly flights, and almost 400,000 seats per week available.

Top Copyright Photo: Avianca (Colombia) Airbus A320-214 N755AV (msn 7437) FLL (Andy Cripps). Image: 954691.

Avianca aircraft slide show:

Avianca El Salvador launches Ontario, CA – San Salvador service

Avianca (El Salvador) Airbus A319-132 N522TA (msn 5219) (Star Alliance) LAX (Michael B. Ing). Image: 937568.

Ontario International Airport (ONT) officials are celebrating the launch of Avianca Airlines’ service to El Salvador – the first of its kind between the Inland Empire to Central America staring on July 1.

The Bogota, Colombia-based carrier will operate three flights a week from ONT to San Salvador International Airport (SAL) in the capital city of El Salvador. Flights will arrive at ONT at 11:30 p.m. on Tuesday, Thursday and Saturday with return service departing ONT at 1:15 a.m.

Flight #

Origin

Destination

Departure

Arrival

Frequency

Aircraft

AV530

SAL

ONT

7:10 p.m.

11:30 p.m.

Tue, Thu, Sat

Airbus A319

AV531

ONT

SAL

1:15 a.m.

7:05 a.m.

Wed, Fri,  Sun

Airbus A319

*All times local

Top Copyright Photo: Avianca (El Salvador) Airbus A319-132 N522TA (msn 5219) (Star Alliance) LAX (Michael B. Ing). Image: 937568.

Avianca (El Salvador) slide show:

Avianca Holdings S.A. files motion for approval for approximately $2.0 Billion in Debtor-in-Possession financing

Avianca Holdings S.A. has  announced that it has secured commitments for debtor-in-possession (“DIP”) financing totaling just over US$2.0 billion and has filed a motion to approve the financing in the U.S. Bankruptcy Court for the Southern District of New York.

The DIP financing – inclusive of rollups of existing debt and purchase loan consideration – is expected to be approximately US$2.0 billion, consisting of a US$1.27 billion Tranche A senior loan and a US$722 million Tranche B subordinated loan. The DIP financing includes approximately US$1.217 billion of new funds consisting of US$ 881 million in Tranche A and US$ 336 million in Tranche B.

On August 28, 2020, as part of syndicating the Tranche A DIP loan, the Company entered into a Restructuring Support Agreement (“RSA”) with an ad hoc group of holders representing a majority of Avianca’s 2023 senior secured notes who will provide US$ 290 million in new funds (inclusive of US$ 63 million of backstop) and roll up US$ 220 million of their existing notes into Tranche A.

US$240 million of the Tranche A financing has been structured as a backstop commitment, to allow for the eventual participation of one or more governments.

The US$722 million Tranche B DIP loan includes US$336 million of new money financing, as well as a rollup of approximately US$386 million of secured convertible debt issued in December 2019 and January 2020 (the “Existing Convertible Debt”). The new money financing was provided by certain of the Existing Convertible Debt lenders, including Kingsland Holdings S.A, as well as third-party investors; certain other Existing Convertible Debt lenders, including United Airlines, participated solely in the Tranche B loan rollup by refinancing their Existing Convertible Debt.

The DIP loans are secured by Avianca’s key assets (including the Company’s ownership stakes in its LifeMiles and cargo subsidiaries, as well as by its key brands and cash accounts). Both tranches are secured by a lien on all available collateral, with Tranche B subordinated in right of repayment to Tranche A. The collateral pool for these DIP financings was recently substantially increased via a series of agreements previously announced by Avianca.

The financing is subject to U.S. Court approval, with a hearing scheduled for October 5, 2020, and other customary conditions.

Avianca aircraft photo gallery:

Avianca Holdings S.A. issues statement on Government of Colombia financing commitment and Colombian Court injunction

Avianca Holdings S.A. has issued a statement regarding the commitment from the Government of Colombia to participate in the Company’s expected debtor-in-possession (“DIP”) financing, following the injunction issued by the Administrative Court of Cundinamarca. Avianca commented as follows:

Avianca reiterates its gratitude to the Republic of Colombia for its continuing support and commitment to participate in the Company’s debtor-in-possession (DIP) financing.  Avianca’s DIP financing, which is supported not only by the government of Colombia but also by the Company’s existing lenders and by more than 90 additional third-party institutional investors, is critical to sustain Avianca’s operations, maintain connectivity throughout Colombia, and help support the country’s economic recovery.

Avianca looks forward to presenting information to the Colombian courts in the coming days, alongside information being presented by the government of Colombia, that will demonstrate that participation by the Republic of Colombia in the Company’s debtor-in-possession financing is a beneficial transaction for the country. The transaction has been structured in a way that provides substantial collateral support as well as attractive economic returns to the Republic that are equal to those of other senior secured private institutional investors, and ahead of certain other key stakeholders and third-party lenders in a US$ 700 million subordinated loan.

We expect to file our DIP motion with the US Bankruptcy Court in the coming week and are confident that the Colombian courts will authorize the Colombian government to move forward with funding in a timely manner.

Avianca Peru is being liquidated

Avianca (Peru) Airbus A330-243 N279AV (msn 1279) MIA (Brian McDonough). Image: 925808.

Avianca Group, as part of its Chapter 11 reorganization, made this announcement about Avianca Peru, formerly TACA Peru:

In parallel to its Chapter 11 filing in the U.S., as previously announced, Avianca is commencing a liquidation of its operations in Peru pursuant to local laws, which will allow Avianca to renew its focus on core markets upon emergence from its court-supervised reorganization.

Avianca Perú is an airline based in Lima, Peru. It operates domestic services and international services. Its main base is Jorge Chávez International Airport (LIM), Lima. The airline operates out of 18 airports. It is part of the Synergy Group and operates its flights with TACA’s codes. Through Synergy Group, it is one of the seven nationally branded airlines (Avianca Ecuador, Avianca Honduras, etc.) in the Avianca Holdings group of Latin American airlines.

In other news, Avianca Group announced first day approvals of its motions in the bankruptcy court:

Avianca Holdings S.A. has announced that all “first day” motions related to the Company’s voluntary reorganization proceedings initiated on May 10, 2020 have been approved on an interim or final basis by the U.S. Bankruptcy Court for the Southern District of New York. Collectively, the orders granted by the Court at the hearing will help ensure that Avianca continues normal business operations throughout the reorganization process.

Among other things, the Court approved motions that will allow Avianca to protect employees and suppliers while also continuing to serve customers. Avianca received authorization to:

  • Pay certain employee wages, compensation and benefit obligations owed from before the filing date, as well as to continue paying wages and honoring employee benefit programs in the normal course of business during its Chapter 11 cases;
  • Maintain its network of customer programs throughout this process. Customers can continue to arrange travel and fly with Avianca in the same way they always have. Additionally, 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; and,
  • Honor various obligations owed to certain of its travel agency partners, vendors and suppliers from before the filing date. The Company will also continue to pay vendors and suppliers, as well as travel agency partners, in the ordinary course for goods and services provided on or after May 10, 2020.

The success of Avianca’s “first day” hearing marks the first significant milestone of the Company’s Chapter 11 case, and will allow it to both issue various critical payments and maintain operational continuity throughout its reorganization. With its requested relief granted, the Company can look forward to productively engaging with key stakeholders and other interested parties. Notably, the next Court hearing is currently scheduled for June 11, 2020, where Avianca hopes to secure approval of all interim orders on a final basis.

Ongoing Government Discussions

As previously announced, 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 critical additional liquidity to support the Company during 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.

Top Copyright Photo: Avianca (Peru) Airbus A330-243 N279AV (msn 1279) MIA (Brian McDonough). Image: 925808.

x

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:

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.

Avianca El Salvador retires its last Embraer 190

The last Embraer 190 revenue flight operated with N936TA on July 1, 2019 (flight TAI 316 Panama City - San Salvador)

Avianca Holdings is streamlining its operations and selling off certain assets due to its on-going reorganization.

The group announced the plan to retire its former TACA Embraer 190 fleet which never adopted the Avianca brand.

Avianca (El Salvador) (formerly TACA), as planned, has now phased out its last Embraer 190. The pictured N936TA operated the last revenue flight for the type as flight TAI 316 on July 1, 2019 from Panama City to the San Salvador base.

Avianca (El Salvador) operates between El Salvador and the following destinations:

  • Belize
  • Bogotá
  • Cali
  • Cancún
  • Ciudad de Guatemala
  • Ciudad de México
  • Ciudad de Panamá
  • Guayaquil
  • La Habana
  • Liberia
  • Lima
  • Managua
  • Medellín
  • Quito
  • Roatán
  • San José de Costa Rica
  • San Pedro de Sula

Avianca Holdings S.A., previously announced on June 4, through its subordinates Grupo Taca Holdings Limited and Nicaraguense de Aviacion S.A., it closed the sale of its shares in Turboprop Leasing Company Ltd., parent company of the Costa Rican airline Servicios Aéreos Nacionales S.A (SANSA) and in Nicaraguan airline Aerotaxis La Costeña S.A (La Costeña).  These airlines operate domestic flights in Costa Rica and Nicaragua, respectively.

The buyer is Regional Airlines Holding LLC., domiciled in Delaware, USA. The transaction was closed on May 31, 2019 by perfecting the contract for the purchase and sale of shares entered into on April 22 between the parties.

This transaction occurs within the framework of the Holding’s new corporate strategy aimed at strengthening its international passenger transportation segment, as well as focusing on the loyalty (LifeMiles) and cargo transportation (Avianca Cargo) business units.

It is important to note that with this transaction, thirteen Cessna 208 and two ATR 42 aircraft will no longer be part of Avianca Holdings’ fleet, in line with the company’s fleet simplification strategy.

In Costa Rica, the Holding has its own airline (Avianca Costa Rica S.A.), operating direct flights to the company’s three hubs: (San Salvador, Bogota and Lima); as well as the Guatemala City and Panama City. Likewise, flights to destinations in Canada, Chile, Ecuador, the United States and Mexico are operated with Costa Rican crews.

Top Copyright Photo: TACA International Embraer ERJ 190-100 IGW N936TA (msn 19000215) MIA (Brian McDonough). Image: 908637.

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

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):