Tag Archives: Avianca

Shareholders of Avianca and controlling shareholder of GOL to create Abra Group

Avianca has issued this statement:

The principal shareholders of Colombia’s Avianca and the controlling shareholder of Brazil’s GOL have signed a landmark agreement to create a leading air transportation group across Latin America under a holding company structure named Abra Group Limited. Subject to customary regulatory approvals and closing conditions, the Abra Group will control Avianca and GOL and bring together their iconic brands under a single holding.

Through recent investments made by Avianca’s and Viva’s shareholders, the Group will also own a non-controlling 100% economic interest in Viva’s operations in Colombia and Peru as well as convertible debt representing a minority interest investment in Chile’s Sky Airline.

Together, Avianca and GOL will anchor a pan-Latin American network of airlines that will have the lowest unit cost in their respective markets, the leading loyalty programs across the region, and other synergistic businesses. Avianca and GOL will continue to maintain independent brands, talent, teams, and culture while benefiting from greater efficiencies and investments under common aligned ownership.

Abra will provide a platform for the operating airlines to further reduce costs, achieve greater economies of scale, continue to operate a state-of-the-art fleet of aircraft, and expand their routes, services, product offerings, and loyalty programs.

In the aggregate, the airlines under the Abra Group ownership will offer customers the largest network of complementary routes, with minimal overlap, across their markets.

Abra’s financial strength will provide long-term stability and agility to the participating airlines that will allow consistent and sustained investment in innovations and synergies.

Abra Group will be co-controlled by the principal shareholders of Avianca and the majority shareholder of GOL and be led by management with significant airline experience across the region, a long history of entrepreneurship, and a proven track record of growth and successful airline transformations.

  • Roberto Kriete, who will serve as the group’s Chairman, grew TACA in the 1980s into the leading Central American airline before merging it with Colombia’s Avianca Airlines in 2009. He also founded the leading Mexican carrier Volaris in 2006.
  • Constantino de Oliveira Junior, who will serve as the group’s CEO, pioneered Latin America’s low-cost carrier revolution when he founded GOL Airlines in 2001. Together with the acquisition of VRG in 2007 and Webjet in 2011, he led the company’s growth to a market-leading position.
  • Adrian Neuhauser, current President and CEO of Avianca, and Richard Lark, current CFO of GOL, will serve as the group’s Co-Presidents, in addition to maintaining their current roles at the airlines; further details on the Abra management team will be provided at closing.

Abra Group’s management will focus on achieving synergies to ensure the lowest cost structure in each carrier’s relevant market; expanding routes, services, product offerings, and loyalty programs; and developing innovative new products and services that will meet the evolving needs of passengers and air cargo customers in the highly competitive Latin American air transportation market and beyond.

Abra will also ensure that its operating airlines are ESG market leaders by providing enhanced governance as well as the financial strength to continue to invest in a lower carbon footprint fleet, which will significantly accelerate the airline industry’s path towards meeting carbon neutrality targets.

Roberto Kriete, Abra Group’s Chairman, said: “Our vision is to create an airline group that tackles 21st century issues and improves air travel for our customers, employees, and partners as well as the communities in which we operate. Our customers will benefit from access to even better fares, more destinations, more frequent flights and seamless connections, and the ability to earn and use points across the brands’ loyalty programs. They will also be able to enjoy enhanced travel benefits and access to superior products and services.”

Constantino de Oliveira Junior, Abra Group’s CEO, said: “This agreement places Abra’s airlines in a position to lead air travel within the region – serving a population of over one billion and GDP of nearly three trillion US dollars – providing significant opportunities for capacity and revenue growth. Our unique enterprise structure will allow each airline to drive results by maintaining their independent brands, talent, teams, and culture and will provide employees more opportunities for personal and professional growth at every stage of their careers.”

In related news, the majority shareholders of Viva and Avianca jointly announced that Viva will become part of the same holding company as Avianca Group International Limited (Avianca Group) and that Declan Ryan, founding partner of Viva, will join the board of directors of Avianca Group, bringing his decades of aviation experience.

Any transfer of control rights over Viva’s operations in Colombia and Peru by the new holding company will be subject to requesting and obtaining all necessary regulatory authorizations.

Until the receipt of necessary authorizations, control and administration of Viva in Colombia and Peru will be independent of Avianca; Viva will continue to compete with the other airlines within the Avianca Group. Until the authorizations are obtained, customers, suppliers, employees, and relationships for the companies will remain the same; with separate internal and external operations, as well as independent sales channels and customer service teams.

Avianca aircraft photo gallery:

Avianca and Viva Air agree to merge under the same holding company

Viva's new "Boomerang" yellow livery

Avianca and Viva Air jointly issued this statement:

The majority shareholders of Viva and Avianca jointly announced that Viva will become part of the same holding company as Avianca Group International Limited (Avianca Group) and that Declan Ryan, founding partner of Viva, will join the board of directors of Avianca Group, bringing his decades of aviation experience.

Any transfer of control rights over Viva’s operations in Colombia and Peru by the new holding company will be subject to requesting and obtaining all necessary regulatory authorizations.

Until the receipt of necessary authorizations, control and administration of Viva in Colombia and Peru will be independent of Avianca; Viva will continue to compete with the other airlines within the Avianca Group. Until the authorizations are obtained, customers, suppliers, employees, and relationships for the companies will remain the same; with separate internal and external operations, as well as independent sales channels and customer service teams.

In the future, if competent authorities approve a change of control, the shareholders anticipate that both airlines may be part of the same holding company, maintaining their individual brands and strategies.

The decision to unify the economic rights of both groups is made after Covid-19 triggered the biggest crisis in the airline industry, forcing airlines around the world to adapt to new ways of flying and strengthen their operations. The pandemic has awakened countries worldwide to see the need to create solid and sustainable airline groups to guarantee and enhance domestic and international air connectivity and, at the same time, generate value for the consumer.

“This is an important day for Viva as it is the perfect scenario to continue with our growth and expansion strategy, staying true to our goal of inclusiveness in air travel. If the authorities approve the management of both groups under the same holding company, it will encourage the growth of the air transport market, promoting low rates for users and good service with the best punctuality, allowing everyone to fly with a world of destinations. This transaction and a potential future combination will create high-skilled jobs for our employees and our suppliers. By delivering the fundamental good of bringing people together, we will positively impact the connectivity of Colombia, the region, and the economic development of the country”, added Declan Ryan, founding partner of Viva.

Potential approval of a full combination will provide both Avianca and Viva with more financial stability allowing them to accelerate investment, innovation, and growth.

Viva Air Route Map:
Top Copyright Photo: Viva (Air Colombia) Airbus A320-251N WL F-WWBH (HK-5352) (msn 10136) TLS (Eurospot). Image: 951288.
Viva Air aircraft slide show:
Viva Air aircraft photo gallery:

Avianca introduces a “Disney Encanto” logo jet on N939AV

Avianca has unveiled a “Disney Encanto” special livery on Airbus A320-214 N939AV (msn 4939).

Avianca emerges from Chapter 11

Avianca (Colombia) Boeing 787-8 Dreamliner N781AV (msn 37503) MUC (Gunter Mayer). Image: 955996.

Avianca announced on December 1, 2021 that it has successfully completed its financial restructuring process and emerged from Chapter 11 as a more efficient and financially stronger airline, with significantly reduced debt and over $1 billion of liquidity.

After advancing through the Chapter 11 process in 18 months, Avianca has revamped its business model to be significantly more efficient, reaffirming its commitment to providing reliable and on-time service, combining a value proposition that includes the best attributes of low-cost airlines, while retaining key differentiators that allow it to be the most convenient travel alternative for millions of passengers in Latin America and the world.

Looking ahead, Avianca will continue to strengthen its value proposition, adjusting its products and services to the needs of its customers:

  • Competitive Prices: Affordable prices are more important now than ever. The Company will provide more competitive pricing and allow customers to personalize their fare packages and pay for the services and flexibility they need.
  • One of the strongest networks in Latin America: Over the next three years, Avianca expects to nearly double its network, expanding to nearly 200 routes in Latin America and the world. The majority of the new routes will be point-to-point, providing greater convenience to its customers. The network will be served by a fleet of more than 130 aircraft by the end of 2025 with reconfigured, lighter-weight new-generation seats, which will allow Avianca to reduce the carbon footprint of its operations and contribute to airport decongestion while increasing its efficiency.
  • More seats and more comfort: Avianca is committed to investing more than US$200 million in the next year renewing its seats, including three new types – Premium, Plus and Economy – of its A320 fleet in order to provide greater comfort, operate more efficiently, and offer more competitive prices.
  • Boeing 787 for long-haul flights: The airline will continue to fly the Dreamliner, an exceptional aircraft that given its capabilities, features, efficiency, and comfort is the best solution for the Company and customers.
  • Avianca Cargo, a strategic business: The Company’s Cargo business will continue with significant growth potential, maintaining its leadership in Colombia and continuing to expand in other strategic markets, providing more and better solutions to the customers.
  • The best loyalty program in the region and VIP lounges: With the LifeMiles frequent flyer program, Avianca customers will be able to continue earning and using miles across the airline’s network and with its coalition partners. Likewise, passengers will continue to enjoy the Company’s VIP Lounges as they have done when flying with Avianca.
  • Star Alliance Member: The company will continue to be supported by Star Alliance, the world’s largest airline alliance, which provides its customers with connectivity to 1.300 airports around the world.
  • Enhanced Services: Avianca has strengthened its online customer service and digital channels for passengers to manage trips more easily. Over the next 12 months, the company plans to further revamp these channels and its apps to continue to improve and make it easier for passengers to manage their travel. Punctuality has been and will continue to be a key priority; according to data from Cirium, Avianca is one of the leading Latin American airlines in on-time performance for 2021.

Roberto Kriete, Chairman of the Board, stated: “We are very proud of the work that the Avianca team has done that has led the company to emerge from Chapter 11 on schedule as a financially stronger organization. While we are on the right path to recovery, we must remain cautious with the progress of the pandemic that has not yet ended and must stay focused on executing our new business plan. I have all the confidence that with the support of our investors, all those who believed in us and with the current leadership, this company will continue to grow while connecting Latin America.”

As per the approved plan of reorganization, the new shareholders will invest in Avianca Group International Limited, a new holding company, which will be domiciled in the United Kingdom and will consolidate the group’s investments in all of its subsidiaries (including Aerovias del Continente Americano, its Colombian subsidiary, and TACA International, its Central American operation). The prior holding company, Avianca Holdings was domiciled in Panama.

Seabury Securities LLC served as investment banker and financial advisor to Avianca, and Milbank LLP served as legal advisor.

Top Copyright Photo: Avianca (Colombia) Boeing 787-8 Dreamliner N781AV (msn 37503) MUC (Gunter Mayer). Image: 955996.

Avianca aircraft slide show:

Avianca aircraft photo gallery:

Avianca plans to emerge from Chapter 11 reorganization before the end of the year

Avianca (Costa Rica) Airbus A320-233 N493TA (msn 2917) LAX (Michael B. Ing). Image: 955533.

Avianca has announced that following its submission of additional documentation that had been requested by the United States Court for the Southern District Court of New York– the Court has confirmed Avianca’s Plan of Reorganization­*i. The Company expects to successfully complete its court-supervised reorganization and emerge from Chapter 11 before the end of the year as a more efficient and financially stronger airline, well positioned for long-term success.

Upon emergence, the Company will have a solid balance sheet, with significantly reduced debt and over $1 billion in liquidity. Avianca’s restructuring will enable the Company to continue repositioning and simplifying its business, re-establishing as the carrier of choice in Latin America by adopting more competitive pricing for clients, reconfiguring aircraft with best-in-class modern seating, expanding network routes both domestically and internationally, refinancing its aircraft portfolio and obtaining long-term financing commitments. Avianca will keep the airline’s differentiating and competitive assets, which include a robust network, one of the best loyalty programs, VIP Lounges, signature services and one of the most competitive cargo solutions in the region.

Business Plan:

Avianca’s updated business plan impacts all facets of operations – the destinations Avianca will serve, the aircraft Avianca will operate, and the way Avianca will serve customers – to build on its leadership position and drive its future success.

Notably, the business plan projects:

  • A financially viable and stable airline;
  • Higher network density with a passenger fleet of more than 130 aircraft flying over 200 largely point-to-point routes by year-end 2025, with expanded service across Latin America as demand fully recovers;
  • A leaner cost structure providing both better pricing and more direct service, while enabling growth into new markets; and
  • Continued growth of the air cargo and LifeMiles loyalty businesses, building on the Company’s already well-established market positions.

Avianca’s Business Vision Milestones:

Over the course of 2021, Avianca has made significant progress on its new business vision in three key areas: strengthening its network, redesigning products and enhancing services. Certain milestones that the Company has already successfully achieved include:

  • A stronger network: Announced 23 new point-to-point routes in strategic markets for 2022, including ColombiaEl SalvadorGuatemala and Costa Rica. Avianca plans to operate more than 100 new routes in the next three years. 
  • Cabin reconfiguration: Incorporated more seats to offer more competitive prices and increase the number of passengers carried. The capacity of each aircraft will be increased by up to 20%.
  • Tailor-made service bundles: Provided customers with better flexibility to manage their flights and services so they only pay for what they really need.
  • Better self-service: Strengthened online customer service, its chat service “Vianca” and digital channels so that passengers can manage their trip more easily from the mobile application and Avianca’s website.
  • A rewarding LifeMiles program: Introduced a new mileage accrual model and more benefits for loyalty program travelers.

Top Copyright Photo: Avianca (Costa Rica) Airbus A320-233 N493TA (msn 2917) LAX (Michael B. Ing). Image: 955533.

Avianca (Costa Rica) aircraft slide show:

Avianca (Costa Rica) aircraft photo gallery:

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.

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