MIAMI – Today in Aviation, Avianca (AV), the second-oldest airline, was registered under the name SCADTA in 1919 to become the flag carrier of Colombia.
Avianca is the flagship of a group of eight Latin American airlines whose operations are merged in a code-sharing arrangement to operate as one airline. The carrier is headquartered in Bogotá, D.C. Its main hub is located at El Dorado International Airport (BOG).
Avianca was founded by Colombian business men and German immigrants in the city of Barranquilla, Colombia, on December 5, 1919. The Colombo-German Group called Sociedad Colombo-Alemana de Transportes Aéreos or SCADTA, was founded by the Colombians Ernesto Cortissoz Alvarez-Correa (First Airline President), Rafael Palacio, Cristóbal Restrepo, Jacobo Correa and Aristides Noguera, and the Germans Werner Kämerer, Stuart Hosie, and Albert Teitjen.
The newly-formed airline completed its maiden flight using a Junkers F.13, carrying 57 pieces of mail, between Barranquilla and the nearby town of Puerto Colombia. Helmuth von Krohn, a German, piloted the flight. This and other aircraft of the same type were entirely mechanically built monoplanes, whose engines had to be changed in order to function effectively in the country’s environment.
German scientist and philanthropist Peter von Bauer became involved in the enterprise soon after the airline was established and contributed general knowledge, capital and a tenth aircraft to the venture, as well as securing concessions from the Colombian government to run the airmail transport division of the country using the airline, which started in 1922.
This new contract allowed SCADTA to flourish on a new aviation frontier. SCADTA began its first international routes in the mid-1920s, which initially included destinations in Venezuela and the United States.
In the late 1930s, as the world moved closer to war, SCADTA became a source of concern for the US government, which became worried about the security implications due to the airline’s ties to Germany. Such concerns dwindled down when a majority interest in the South American carrier was later purchased by Pan American World Airways.
After WWII, AV began flights to Quito, Lima, Panama City, Miami, New York City, and Europe in 1946, using Douglas DC-4s and C-54 Skymasters. In 1951, the Lockheed 749 Constellations and 1049 Super Constellations were acquired by AV, which merged with fellow Colombian SACO (Servicio Aéreo Colombiano) airline in 1949 to adopt its current name.
To increase its fleet, AV leased two Boeing 707 aircraft to service its international routes in 1961 and purchased its own Boeing 720s on 2 November 1961. Avianca became the first Latin American airline to fly a Boeing 747 on a continuous basis in 1976. It began operations with another 747 three years later, this time a 747 Combi, combining cargo and passenger operations.
After some mergers and a disbanded alliance effort with SAM Colombia during the following decades, on December 10, 2004, AV filed for Chapter 11 bankruptcy protection.
With the protection in place, the carrier completed a significant reorganization process by gaining confirmation of its reorganization strategy, which was financially assisted by the Brazilian consortium, the OceanAir/Synergy Group, and the Colombian National Federation of Coffee Growers. This allowed the airline to receive US$63m in funds over the course of 13 months.
Under this strategy, AV was then purchased by Synergy Group and was consolidated with its subsidiaries OceanAir and VIP Ecuador. The full legal name of the organization was changed to Aerovías del Continente Americano (Airways of the American Continent) from Aerovías Nacionales de Colombia (National Airways of Colombia), retaining the acronym Avianca. OceanAir and VIP were re-branded in 2009 as Avianca Brazil and Avianca Ecuador.
Avianca and the Star Alliance
In 2009, the airline announced that it was going to merge with TACA. This created AviancaTaca Holdings with 129 aircraft and flights to more than 100 destinations, which quickly became one of the region’s largest airlines.
In November 2009, Fabio Villegas, the airline’s chief executive, announced that AV was preparing to replace its Fokker 50 and Fokker 100 aircraft with newer aircraft with a capacity of 100 or fewer seats. On January 1, 2011, AV agreed to remove the Fokker 100 aircraft and replace them with 10 GECAS leased Airbus A318 aircraft. The planes were delivered between February and April 2011.
On November 10, 2010, Star Alliance declared the full membership of AV (and its fusion equivalent, TACA) to be set for 2012. As a result, TACA terminated its codeshare agreement with Delta Air Lines (DL) due to its accession to the Alliance. Since 2006, TACA has been code-sharing with United Airlines (UA) instead. AV and TACA were both officially admitted into Star Alliance on June 21, 2012.
With the new horizons the Alliance would offer, On May 28, 2013, TACA and all other airlines from AviancaTaca changed their name to Avianca. At the Annual General Meeting on March 21, 2013, the shareholders decided to change the name of the firm from AviancaTaca Holdings S.A. to Avianca Holdings S.A.
As of 2017, AV operated the second-most regular international flights from Miami with a total of 16, second only to American Airlines (AA).
However, AV had some operational problems in August 2018 due to issues with the network it used to allocate its crew schedules. This resulted in several flights inside Colombia being canceled. Similarly, only in October 2018 were all flight itineraries managed by the airline restored due to the stoppage of ACDAC Pilots in 2017.
in March 2019, AV introduced Regional Express Américas in Colombia. The new airline would operate short regional flights with ATR-72 aircraft. However, that same year, AV had substantial financial liabilities.
As a result, the carrier released more debt to cover short-term obligations, and on December 31, 2019, signed a debt swap. As a consequence of the COVID-19 pandemic, this lack of liquidity and the amount of debt rendered AV especially vulnerable to the cessation of the company.
Avianca in 2020
On May 10, 2020, as a consequence of the pandemic, AV filed for Chapter 11 bankruptcy for the second time in its history 100-year history; by the end of 2019, the airline had accrued a gross debt of US$7.3bn.
On May 10, 2020, AV and 23 associated debtors applied for Chapter 11 bankruptcy in the United States District Court for the Southern District of New York. The debtors recommended that the cases under Case No. 20-11133 be jointly handled.
Today, after having absorbed many airlines in neighboring countries and going through two bankruptcies, AV is still one of Latin America’s largest airline companies, with a fleet of 173 aircraft and a network of subsidiaries covering almost the entire continent.
As of 2020, being Colombia’s largest airline and Latin America’s second-largest, after Chile’s LATAM, Avianca and its subsidiaries have the most comprehensive network of destinations.
Featured image: John Leivaditis/Airways. Article Sources: Avianca, CNN, “Álvaro Uribe Vélez,” Jorge Humberto Botero Angulo, planespotters.net.