rtmark
LearnBonds.com

Coronavirus: Latin America’s second-largest airline files for bankruptcy

Mohit Oberoi
Author: Mohit Oberoi

Last Updated: May 11, 2020

Colombia’s Avianca Holdings has filed for bankruptcy, with Latin America’s second-largest airline threatening to become the first major carrier to collapse as a result of the coronavirus pandemic, which has crippled world travel.

Bogota-based Avianca filed for Chapter 11 bankruptcy in New York on Sunday facing a debt payment on $7.3bn of debt. Talks about a bailout from the Colombian government have so far been unsuccessful.

A $65m bond payment was due yesterday. Previously, S&P downgraded Avianca’s credit rating to CCC-.

The carrier, the world’s second-oldest continuously operating airline after KLM, has not flown a scheduled passenger flight since late March and almost all of its employees have not been paid during that time.

The airline sector has been among the worst affected due to the pandemic. Airlines in developed countries in the US and Europe are seeking bailouts from governments to survive the tough period.

Avianca chief executive Anko van der Werff said: “Avianca is facing the most challenging crisis in our 100-year history.”

Analysts said the firm had run up large debts over a number of years, and so was always susceptible to failure in tough times

Last year only, KPMG, Avianca’s accounting firm raised “substantial doubts” about the company’s ability to continue operations beyond a year.

Avianca has gone through bankruptcy previously also in the early 2000s. Back then, German Efromovich the Bolivian-born oil businessman rescued the airline. However, he was ousted from the company last year in a reshuffle led by United Airlines. He, however, is still the largest shareholder and does not agree with the move to file for bankruptcy.

Last week, billionaire investor Warren Buffett is also bearish on the future on airline companies and dumped all his positions in airline stocks. However, retail investors were net buyers in the sector last month. Egyptian billionaire Naguib Sawiris is also putting his weight behind airline stocks.

Note: You can check our recommended list of stockbrokers. You can also view our recommended list of binary options brokers.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Mohit Oberoi

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.