Avianca Boeing 787-8. Photo: Alan Wilson.

MIAMI – Avianca Holdings (AV) has announced today that it received final approval by the US Bankruptcy Court of New York to keep its business operational amid its reorganization process.

In a statement, AV CEO, Anko van der Werff said that most of the company’s ’first day’ motions were approved to continue operating with the goal of emerging as a highly competitive and successful carrier in the Americas.

Granted network conditions for AV

Having filed for Chapter 11 a month ago, the company and its subsidiaries were given today the green light to keep business as usual, flying customers through its network.

Additionally, the airline’s LifeMiles program will continue to be available for passengers to accrue miles and purchase tickets.

Regarding these approvals, CEO Van der Werff said in a statement that AV is pleased to continue moving forward in its reorganization process.

Third parties payments and obligations must continue

For carrying network operations, the US Bankruptcy Court for the Southern District of New York demanded that the carrier respects its pre-petition and ongoing obligations owed to third parties.

As a result, the company will continue paying its vendors, suppliers, travel agency partners, interline and codeshare partners since the filing process began and in ordinary course.

The Court decision also specifies that AV must pay accrued and ongoing pre-petition taxes and fees alongside insurance and surety bond obligations.

Avianca 2021 plan still on the table

As various AV’s core intentions were granted during its reorganization, the financial challenges of carrying forward Avianca’s 2021 plan was also addressed in the petition.

On May 10, AV CEO had already said that achieving this goal had been one of the reasons to enter into a reorganization process.

The carrier had positive initial results on the plan by redesigning its network with 130 routes to 76 destinations in 27 countries, launching “branded fares” as a new pricing model in the process.

However, grounded operations and imposed travel restrictions in Mid-March led AV to lose revenue by over 80%, straining its cash reserves and compelling it to file for Chapter 11.

For the future and beyond the business restructuring, Van der Werff said that the airline would continue to focus on productive engagement with key stakeholders and interested parties once travel restrictions are lifted.