Colombia’s Avianca airline files for bankruptcy over coronavirus impact

(Reuters) – Colombian airline Avianca Holdings SA , filed for Chapter 11 bankruptcy on Sunday, after the coronavirus pandemic forced the company to ground passenger operations since mid-March and reduced its consolidated revenues by over 80%.

Avianca, Latin America’s second-largest airline, estimated liabilities between $1 billion to $10 billion in a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The impact of the novel coronavirus pandemic has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, Avianca said, citing the International Air Transport Association.

In parallel to its Chapter 11 filing in the United States, Avianca said it intends to begin winding down operations in Peru pursuant to local laws.

The airline had been in weak shape even before the crisis hit. Roberto Kriete, president of Avianca’s board, said last year in a meeting with employees that the airline was “broke.”

(Reporting by Devika Krishna Kumar in New York; Editing by Daniel Wallis and Lisa Shumaker)