Yesterday, Avianca filed for Chapter 11 Chapter in the US. That is the second time in Avianca’s historical past that the Colombian airline information for Chapter 11. However now, what does it imply for the airline? What does it imply for the passengers? What does it imply for Colombia, and the way did we come to this? Let’s examine additional.Avianca file for a Chapter 11 chapter within the US. Photograph: JTOcchialini through Flickr.The airline has not gone bustFirst and foremost: Avianca will proceed to fly. As Anko van der Werff, Avianca’s CEO, stated “this is not an insolvency proceeding. Avianca operations will continue during and after [Chapter 11].” The airline launched a brand new web site referred to as aviancawillkeeponflying.comThe process is among the most utilized by airways within the US. American Airways did it in 2011; Air Canada filed for it in 2003. Delta Air Traces and United Airways additionally used Chapter 11 in the course of the present century. All of those airways have come again stronger than ever after submitting for it. Commercial:Featured Video: And what’s Chapter 11?It’s a authorized process that permits an organization to reorganize and full a monetary restructuring beneath the supervision of the justice system within the US. On the similar time, the corporate continues its operation. “We are sure that Chapter 11 will allow us to execute our “Avianca 2021” plan. We’ll optimize our capital construction and our fleet, and, with the Authorities help, we are going to emerge as a greater and extra environment friendly airline that may function for a lot of extra years,” stated Anko van der Werff. Avianca did the identical factor again in 2003. Photograph: BriYYZ through Flickr.In case you’re a passenger, what now?Don’t fall into panic. Avianca will proceed flying, as soon as the airspaces in South America are open once more. As of 10 Could, 88% of the international locations have been Avianca flies had partial o whole restrictions to business aviation. Though Avianca will cancel some routes within the close to future, it’s too quickly to know which of them. Van der Werff added that the second part of this Chapter 11 consists of the redesign of the corporate and its route map. What we all know for positive is that the airline will scale back its operation in Peru. Avianca had already determined this earlier to yesterday’s announcement. It can enable specializing in its essential markets, Avianca stated. In the meantime, Avianca will proceed its operations in Colombia, primarily from its hub in Bogota. It has a share of over 50% of the home market in Colombia. Moreover, it supplies jobs to over 14,000 individuals within the nation. Final yr, Avianca had one-off prices for nearly $900 million. Photograph: Daniel Martínez Garbuno/Easy Flying.How did we get right here?In 2019, Avianca obtained new administration. Consequently, the provider removed its former proprietor, German Efromovich, and introduced a brand new mild beneath the help of United Airways. Avianca introduced its “Avianca 2021” plan and let go of a few of its older plane. On the similar time, it launched a new regional provider, elevated its frequencies to a number of locations together with Brazil, and signed a brand new codeshare with TAP Air Portugal. However all this motion had a value. In 2019, Avianca had one-off prices of $894 million. It noticed a 5.50% lower in its earnings, and the variety of traders got here to an all-decade low. In line with La Republica, in December 2010, the variety of stakeholders was 47,554, whereas in December 2019, it was 9,373. Because the provider acknowledged, the plan was going properly. However then the present disaster hit and shook Avianca to its core. Because the oldest airline in Latin America and the second most vital after LATAM, the area can not lose Avianca. It will be essentially the most vital blow to business aviation in Latin America.What do you suppose will occur with Avianca? Tell us within the feedback.