Avianca Brazil ceases operations

The deeply embattled airline had its AOC revoked by the Brazilian authorities on Friday night and has ceased all operations.

Talks have been going in for months about restructuring the airline and its debts, but it’s been something of a ‘death by a thousand cuts’ process.

When airlines reach a point that they have to publicly admit their circumstances, bookings drop, which exacerbated the situation. Less bookings less cash, more lay offs and closed routes, creditors panic, aircraft are returned and so on and on.

Other airlines and investors come forward and look at the books and quickly their interest vanishes.

Avianca Brazil claims it will be back. Don’t they all?

The situation at its parent company Avianca Holdings in Colombia is even more bizarre. It owns the main Avianca brand and that is part owned by United.

The ownership of that has been forcibly changed following a default on its debts of $460m and a boardroom battle. United appears to have won with its allies and has offered a loan of $150m to the company to support it, before it too becomes history and United looses an investment in a market its keen to get into.

Advertisements