Colombia announces $370 mn loan to pandemic-hit airline Avianca
Colombia’s government announced last week a $370 million loan to the airline Avianca, which has grounded almost its entire fleet because of the pandemic.
The second-largest carrier in Latin America is undergoing a restructuring and has filed for bankruptcy protection under laws in the United States.
The Finance Ministry said the loan will become available once a US federal court in New York approves the Colombian government taking a stake in the restructuring.
The ministry said the loan is being offered because of the possible impact on Colombia’s economy of Avianca failing completely.
Saddled with debt, Avianca filed in May in the US court as it tries to reorganize that liability.
In late March Avianca suspended all of its flights and grounded its fleet of 142 aircraft, citing restrictions imposed by the Bogota government to halt the spread of the coronavirus.
The government of President Ivan Duque has allowed some exceptions for domestic flights, however, and this week he said more can take off starting in September.
The company hopes to resume international flights in October.
Because of the pandemic Avianca has laid off 12,000 of its more than 20,000 employees.
The pandemic has claimed around 19,000 lives in Colombia.
The government says Avianca accounts for 1.4 percent of the country’s GDP.
Avianca lost almost $900 million last year, compared to profits of $1.1 billion in 2018.
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