Colombian flag-carrier Avianca has lined up a $2 billion bankruptcy-loan package to finance its stay in chapter 11.
The cash has been sourced from a group of investors and lenders including United Airlines and chairman Roberto Kriete personally. One of the largest airlines in South America, Avianca sought bankruptcy protection in May and has since been battling to stay in business,
Like regional rivals LATAM and AeroMexico, the airline has been hard hit by a slump in demand for travel in the wake of the Covid-19 shutdown.
Anko van der Werff, chief executive of Avianca, said: “We are extremely pleased with the support received from a large number of third-party institutional investors and our existing lenders.
“We believe this demonstrates the market’s confidence in Avianca’s future as a strong, competitive and profitable airline.
“Securing these financing commitments is another concrete step forward in our chapter 11 reorganisation process and we look forward to the United States court approval of our proposed DIP financing package.”
Avianca recently resumed operations in most domestic markets and plans to add more domestic and international destinations in the coming weeks.
der Werff added: “We remain focused on refining our reorganisation plan to fully address the current industry landscape and the effects of Covid-19, enabling our team to continue driving efficiency and margin expansion and positioning Avianca to successfully serve Latin America’s air travel needs for many years to come.”