Sky News Arabia
Due to the outbreak of the Coruna Virus, the Colombian airline Avianca declared bankruptcy, on Sunday, after failing to meet the deadline for the bond repayment, setting a vivid example of the major economic impacts of the Corona outbreak.
The Colombian government did not respond to the demands of Avianca, the second oldest airline in the world, for material aid, to officially declare its bankruptcy on Sunday.
If it fails to get out of bankruptcy, Bogota-based Avianca will be one of the first major airlines in the world to “deteriorate” as a result of the “Covid-19” epidemic, which paralyzed global travel.
Avianca has not scheduled scheduled passenger flights since late March, and it laid off most of its 20,000 employees without pay during the crisis.
“Avianca faces the biggest crisis in our 100-year history,” said Anko van der Werw, chief executive of Avianca.
While the company has already been experiencing financial crises, bankruptcy highlights the challenges facing airlines that cannot rely on government bailouts or upcoming bailouts quickly enough.
“This is not a surprise at all,” said Juan David Palin, chief economist at Casa de Paulsa Brokerage in Bogota. “The company was heavily indebted even though it tried to restructure its debt last year.”
Avianca is the second oldest continuously operating airline in the world after KLM Dutch, and it suffered from $ 7.3 billion in debt in 2019.