From dealing with the COVID-19 pandemic to a Chapter 11 bankruptcy, avianca has come out the other side strongly with more flights and a stronger network.
As will be explained in this feature, we will take a look at the airline’s story over the past few years and establish one thing: They are performing very well!
Without further ado, let’s get into it…
Dealing with COVID-19 & Chapter 11…
Rewind back to 2019 and avianca was in a negative financial situation.
They already had significant financial liabilities, which they then issued more debt to cover short-term payments.
A debt exchange was finalised on December 31, 2019, but at this point, the airline didn’t expect the following global event to happen: COVID-19.
The world began to shut down, and so did the Colombian Government, which ordered avianca to suspend all operations.
Furthermore, no scheduled flights were allowed, which wiped out around 80% of the airline’s revenue overnight.
By May 2020, the airline filed for Chapter 11 Bankruptcy in the United States due to the COVID-19 pandemic.
This was the second time in their history that they had filed for such proceedings.
The situation was not good at all: By the end of 2019, avianca had around $7.3bn worth of debt.
Chapter 11 proceedings continued until December 2021, when they exited the bankruptcy, in a big move for the airline.
But after that period of downturn, what followed after was a great few years for the airline.
2023 Was A Great Year for avianca…
2022 was the full recovery year for avianca, as they sought to restart existing or new flight operations.
They went from handling 7.9m passengers in 2020, to 14.1m in 2021 and then nearly 25m in 2022.
And then at the end of last year, they increased passenger numbers again to 31.9m, showing a meteoric rise.
October 2023 saw the final stage of their recovery phase, which was the rebrand from the capital A to lower-case A.
At the time, avianca CEO Adrian Neuhauser said the following on that rebrand:
“The more than 180 days that our planes spent on the ground due to the COVID-19 pandemic were dark days”.
“We knew that our airline was at risk of disappearing, as was the connectivity of the countries and regions where we operated and the jobs we generated.”
“But it was also during that time that we saw that it was not only possible but also necessary to achieve a different [airline], one that is more open, closer, more accessible, and with more for everyone.”
“After nearly two years, that new avianca is here.”
“This is perhaps the greatest reinvention of an airline in the history of aviation. That’s why today we say hello to [the airline] in lowercase and goodbye to the uppercase ‘A’ of the past.”
“This is a brand that honors our history and at the same time represents what we are today, a renewed [airline]: friendly, agile, accessible, attentive and cheerful.”
“An [airline] that looks you in the eye and calls you by your name. An [airline] where everyone is welcome and where the sky belongs to all.”
So what remained clear was at that point, the airline had got themselves out of an extremely difficult position and have thrived well.
The First Half of 2024 Has Been Very Strong…
The hard work didn’t stop in 2023, however.
avianca hit the ground running in 2024 by introducing new fare options for it’s flights and was named the most punctual global airline in 2023.
As well as being the most punctual airline, they also showcased their efforts to sustainability.
In 2023, the airline was able to reduce it’s emissions by 21% despite continuing to grow operationally.
By March 2024, they announced a seasonal return to certain destinations in the United States, a big market for them.
Such seasonal routes have launched in the last week or two.
By the end of Q1, avianca handled a whopping 9.3m passengers, a 37.5% increase.
Finally, just last month, the airline unveiled a new codesharing partnership with Emirates, which expands their presence globally.
It’s clear in this regard that the carrier has had a busy first half of the year so far.
Digging Deeper into Where The Airline is Right Now…
To dig deeper into the success story, AviationSource got the chance to speak with Rolando Damas, avianca’s sales director for North America, Central America and the Caribbean.
There were a few areas that Damas highlighted that give an indication into how they have been able to bounceback as well as what the future will look like.
The Airbus A320 Family…
On the Airbus A320, Damas credited the aircraft type as a major part of their revitalisation in adding more flights to the avianca network:
“We operate the Airbus A320 in the Americas primarily, with a configuration of 180 seats, which was upgraded from 150 seats.”
“In the first three rows of the aircraft, we have what we call Premium, which is a little bit more comfortable”.
“On top of this, with the 11 routes that we are launching, the aircraft will have three rows of business class, so we’re going to offer a full business class service and product”.
Asked about whether the airline would opt for the A321, an aircraft they used to have, in the future, Damas said:
“So at the moment, we have an order for quite a few A320neos, which will seat 180 passengers.”
“Right now, we’re very content with that configuration”.
“Our A320neos typically operate the longer flights to Montreal & San Francisco”.
The U.S from Bogota As A Big Market…
Bogota remains an important hub for avianca flights to the U.S as Damas explains:
“Some other routes we have into the U.S is Washington-Bogota, JFK-Bogota etc. So it’s been a great time for growth for us.”
“It’s all Bogota right now”.
“But for the U.S specifically, it is the second most important market that we operate in after Colombia”.
“We currently have 377 weekly frequencies from North America to Latin America”.
“We grew over 35% in North America in 2023, and for the first quarter of 2024, we have grown another 25%”.
40 Million Passengers Expected by 2024-End…
As mentioned further above, avianca has been growing at some strong pace in the last three years with new flights and fleet expansion.
Damas explicitly stated that 2024 expects to be the same in terms of continual growth.
“In 2022, we achieved around 25m passengers, and around 31-32m in 2023.”
“For 2024, we are expecting to transport around 40 million passengers. So it’s definitely quite a bit of growth for us”.
Emphasis on Seasonality vs. Year-Round…
Damas also gave an interesting perspective on route selection at avianca in terms of the arguments surrounding seasonality vs. placing a route on a year-round basis:
“Regarding demand, the model of seasonality is why we continue to grow in 2024”.
“We put more seats and more aircraft to fly on the popular routes. These 11 seasonal routes are a good example of why we see that the demand is still there”.
“Of course, we’re not the only ones growing. The competition also grows, so it makes it a little bit of a challenge”.
“But that’s part of the business. The high season for us is the Summer, which is where you see us launching routes such as Las Vegas-San Salvador, Chicago-Guatemala etc.”
“Historically, maybe we would leave a route on all-year round and it didn’t turn out to be profitable”.
“So now what we’re doing is is that if a route isn’t profitable year-round, we will make it seasonal instead”.
New Routes Coming…
Finally, Damas gave some insight into new routes launching over the Summer season.
He confirmed to AviationSource that avianca will be launching the following flights:
- Chicago-Guatemala
- New York JFK-San Pedro Sula
- Miami-Cartagena
- New York JFK-Cartagena
- San Salvador-Madrid
- Bogota-Paris (In time for the Paris Olympics on July 3rd).
This interview with Damas backs up the exact point that there is only one trajectory for avianca at present: Growth.
avianca is Destined for Great Things…
In conclusion, avianca has come a long way in the last three to four years.
From significant financial turmoil, to dealing with a global pandemic, to coming out of the other side post-Chapter 11 is a major feat.
As we approach the busier side of the Summer 2024 season, this is the crunch time to hit that all-important figure of 40m passengers by year-end.
With the new routes launching/launched, it is very clear that the sky is the limit for the Colombian carrier.
It is also an exciting aspect for aviation in the Americas as well, with there now being a strong competitive contender in that major market.
But for now, all eyes will be on what comes next for this airline that has revived itself into the next generation.
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