After five months in bankruptcy protection, Avianca Brasil stopped flying
On the same day, United Airlines dismissed German Efromovich, president of Avianca Colombia, the group’s main airline
Avianca Brasil airline is officially suspended from flying since the weekend. The Brazilian civil aviation agency (ANAC) announced on Friday that it has suspended all flights of the company. The agency’s statement says the company’s operations are suspended until it proves the ability to keep its activities safe.
According to ANAC, the decision was made based on information provided to the area responsible for the agency’s safety. The airline will have to rearrange or reimburse passengers and warn of cancellation of flights.
In a bankruptcy protection since December, Avianca Brasil had to return most of its aircraft and canceled thousands of flights. Since April, the company had been operating with only five airplanes at four airports: Congonhas, Santos Dumont, Brasilia and Salvador and was close to losing the rest of the aircraft to the lessors.
Brazil’s fourth-largest airline, Avianca ended 2018 with a $ 120 million debt that has now multiplied by at least seven times. One of the company’s biggest problems was the lack of leasing payments for most aircraft in its fleet. By failing to meet the commitments, the company was forced to return the aircraft.
Avianca Brasil blamed the strong economic recession, rising fuel prices and currency fluctuations as the cause of its crisis.
Problems with Avianca Colombia
The difficulties of Avianca Brasil and the Argentine branch were extended to Avianca Colombia. The second oldest airline in the world, the company had its president German Efromovich removed by United Airlines, creditor of Avianca Holdings.
The reason was the non-payment of a $ 456 million loan to Efromovich’s BRW Aviation. As a guarantee, the executive offered 51.5% of Avianca’s shares. Since it can not take control of other airlines because of an agreement with the Pilots’ Union, United has passed its voting rights to Avianca’s second-largest shareholder, Kingsland Holdings.
Like the operation in Brazil, also belonging to the brothers Efromovich but whose legal name is Ocean Air, Avianca Colombia goes through financial difficulties. The company cut routes, canceled orders for airplanes and tried to disassociate itself from Avianca Brasil problems that affected its image as well.