January 29, 2004
A US bankruptcy judge postponed until February 10 a decision on whether to grant Colombian airline Avianca another deadline extension -- this time until March 30 -- to present a restructuring plan, creditors said on Thursday.
If granted, the deadline extension would be Avianca's fifth.
Colombia's flagship carrier, struggling to keep itself in the air and a possible acquisition target by Continental Airlines, had until January 30 to present the plan. It requested the extension two weeks ago.
Last March, Avianca and its US subsidiary filed for Chapter 11 bankruptcy protection in the United States, hurt by high fuel costs and slack demand stemming from the political and economic crises in Venezuela and Argentina.
Avianca has a US subsidiary, which allowed it to apply for Chapter 11 proceedings to try to renegotiate at least USD$269 million in debt while continuing to operate. The US law is more generous with struggling debtor companies than Colombian legislation.
A source close to Avianca said earlier this week that Continental Airlines is negotiating the possible purchase of the struggling airline. Continental declined comment.
SoAmSky From United States of America, joined Jan 2004, 310 posts, RR: 0
Reply 1, posted (12 years 4 months 5 days 5 hours ago) and read 2522 times:
"Last March, Avianca and its US subsidiary filed for Chapter 11 bankruptcy protection in the United States, hurt by high fuel costs and slack demand stemming from the political and economic crises in Venezuela and Argentina."
I don't buy that completely. Since I can remember Avianca is always loosing money. What in the world!! Avianca air fares are the highest among other airlines. It is cheaper to go to any other South America country than Colombia. By the way, even with the high fares the planes are almost always full.
when the oil prices went up, I read on the news that Colombian government kind of subsidized oil prices to help the Colombian air lines. They also have a fuel surcharge that goes up every time oil prices go up.
There is crisis in Venezuela and Argentina, ok, Venezuela could be important given that Venezuela is the first or second largest business partner; however, loosing one market doesn't mean going into bankruptcy. Avianca holds 70% or more of the domestic market in Colombia which, despite of the high prices of the air tickets, favors the air travel over the bus travel because of the country unrest.
In summary, I hope for the pride of Colombia the airline survives as Avianca. Yet it is desperately needed to replace the bunch of morons who run it.