A U.S. Bankruptcy Court has given interim approval to "first day" motions for Colombian carrier Avianca, enabling it to continue operations after filing for Chapter 11 protection on Sunday.
The approval enables Avianca to pay wages, honor obligations to travel agencies and vendors and maintain operational continuity, according to the carrier. "We are committed to maintaining connectivity for people, families and businesses and we look forward to gradually resuming our passenger flights as travel restrictions are lifted," Avianca CEO Anko van der Werff said in a statement.
Avianca will return to U.S. Bankruptcy Court on June 11 in hopes of getting final approval for the interim orders and is in discussion with the Colombian government and other governments where it operates "regarding financing structures that would provide critical additional liquidity," according to Avianca. It will use cash on hand as well as revenue generated by the operations it still is running currently, including cargo, as it reorganizes.
In addition, Avianca has begun to liquidate its operations in Peru so it can "focus on core markets" when it comes out of bankruptcy protection.
Avianca's scheduled passenger operations have been grounded since mid-March, which has dealt an 80 percent hit to its consolidated revenue. The carrier represents more than half of Colombia's domestic aviation market and employs more than 21,000 people across Latin America.