Colombia: the government comes to the aid of the airline Avianca

Text by: RFI Follow

2 min

Due to the coronavirus pandemic, the first Colombian airline, Avianca, is going through serious difficulties. The Colombian government has just announced that it is granting it a loan of 370 million dollars. But first, this loan must be approved by a New York court.

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Due to the pandemic, Avianca has had to pin her 142 planes to the ground and put 12,000 of her employees on unpaid leave of the 20,000 she employs. The company therefore requested assistance from the State, which granted it a loan of up to $ 370 million, repayable in November 2021.

The payment will not be effective until a New York court has approved the participation of the Colombian state in the restructuring of the company. 

Avianca announced on May 10 that she wanted to be placed under the protection of American bankruptcy law in order to be able to restructure her debt. This American legal provision allows companies in difficulty to restructure without being worried by creditors and to continue their activities.

For the Colombian government, the survival of Avianca, the first Colombian airline and the second in Latin America, is essential to the country's economy. It represents around 500,000 direct and indirect jobs and its activity contributes nearly 1.4% of Colombian GDP.

Despite the still high number of contaminations in Colombia, the government is relaxing the rules. From September, the airline must resume its domestic flights and in October its international traffic.

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• Colombia
• Transport
• Aeronautics
• Economic crisis
• Coronavirus

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