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RCS763AV
Posts: 3854
Joined: Mon Jun 14, 2004 1:22 am

Re: Avianca's Chairman: The airline is broke

Thu Aug 29, 2019 6:14 pm

To be a fanboy?

Oh my god. If anything I'm critical of many things from the management of the company, to their sometimes flaky customer service, to their recklessness in ordering aircraft and launching routes without proper market studies. Not to mention how there was no arm's length principle in the corporate governance of Avianca Holdings and the other Efromovich companies, which was almost corrupt.

Back to the thread topic, yes, you are interpreting the words in the wrong manner. Kriete himself came out explaining his words as he knows the PR nightmare he created for the company in the face of the unsophisticated public. The airline is not broke, it is in a complex financial situation. Those are two very different situations in the corporate world, not just technicalities.

On the other hand, to show how objective this thread is being, on the last post dcajet said Van der Werff held his conference this morning as part of the "general PR effort to back up the 2020 plan". Well I actually read what VDW had to say:

(i) They are successful in the process of exchanging bonds which have a 2020 maturity. Such process should end on September 11 after which they will be able to access more financing from UA.
(ii) They are not planning to leave capital markets (i.e. the stock exchanges of Bogotá and New York).
(iii) Colombia is what's making money for the company right now. More focus will be put on BOG to the detriment of mainly LIM but also SAL.
(iv) The A320 fleet will receive new, more dense interiors to bring CASM down and better compete with LCCs, as LATAM did a couple of years ago.

So I ask myself, why are all the central american posters in this thread declaring the apocalypse? Why so much hate toward a company that employs so many people and connects the continent providing much needed competition to the LATAM giant? Is it because they decided to focus away from certain countries in your region as they lost money due to an ancient business model which didn't really work anymore?
 
THS214
Posts: 339
Joined: Thu Jul 27, 2017 4:01 pm

Re: Avianca's CEO: The airline is broke

Thu Aug 29, 2019 6:25 pm

dcajet wrote:
TWA902fly wrote:
dcajet wrote:
Chapter 11 on the cards?


“Chapter 11” is a US bankruptcy law. Avianca is not a US company.

‘902


I am no legal expert, yet back in 2003...

THE AVIANCA MIRACLE

On March 21, 2003, Avianca Airlines filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in bankruptcy court in New York City. Avianca emerged from Chapter 11 on December 10, 2004, as a reorganized company, adequately capitalized and with a cost structure that the Company projected could be sustained well into the future. Thus began and ended the story of one of the most remarkable bankruptcy cases in United States history.


https://www.sgrlaw.com/ttl-articles/872/


Normally its the law of the country. In case of Avianca, if the country has given up their sovereignty then US law can be used. Also if there are leasers from other countries then it can get complicated.
 
dcajet
Topic Author
Posts: 4654
Joined: Sun Aug 01, 2004 9:31 am

Re: Avianca's CEO: The airline is broke

Thu Aug 29, 2019 9:05 pm

THS214 wrote:
dcajet wrote:
TWA902fly wrote:

“Chapter 11” is a US bankruptcy law. Avianca is not a US company.

‘902


I am no legal expert, yet back in 2003...

THE AVIANCA MIRACLE

On March 21, 2003, Avianca Airlines filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in bankruptcy court in New York City. Avianca emerged from Chapter 11 on December 10, 2004, as a reorganized company, adequately capitalized and with a cost structure that the Company projected could be sustained well into the future. Thus began and ended the story of one of the most remarkable bankruptcy cases in United States history.


https://www.sgrlaw.com/ttl-articles/872/


Normally its the law of the country. In case of Avianca, if the country has given up their sovereignty then US law can be used. Also if there are leasers from other countries then it can get complicated.


AFAIK, Avianca Holdings is incorporated in the US with its place of business being

8333 Northwest 53rd Street Suite 100 Doral, FL 33166 United States and with 149 employees on the payroll.

Nor sure if this matters or even has anything to do, but most of Avianca fleet is under the N-registry, not Colombia's HK-.
Keep calm and wash your hands.
 
dcajet
Topic Author
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Re: Avianca's Chairman: The airline is broke

Thu Aug 29, 2019 9:14 pm

RCS763AV wrote:

So I ask myself, why are all the central american posters in this thread declaring the apocalypse? Why so much hate toward a company that employs so many people and connects the continent providing much needed competition to the LATAM giant? Is it because they decided to focus away from certain countries in your region as they lost money due to an ancient business model which didn't really work anymore?


Pardon me, but who/where are the Central Americans? Personally speaking, I didn't know that California/Bay Area is now considered to be part of Central America?

And yes, you are an AV Colombia fanboy. :hissyfit: Just read the lines you wrote above.

Back on topic, here's a link to some excerpts of Mr. van der Werff's conference in Bogota today.

https://www.reuters.com/article/us-avia ... SKCN1VJ2C0
Keep calm and wash your hands.
 
THS214
Posts: 339
Joined: Thu Jul 27, 2017 4:01 pm

Re: Avianca's CEO: The airline is broke

Thu Aug 29, 2019 11:18 pm

dcajet wrote:
THS214 wrote:
dcajet wrote:

I am no legal expert, yet back in 2003...



https://www.sgrlaw.com/ttl-articles/872/


Normally its the law of the country. In case of Avianca, if the country has given up their sovereignty then US law can be used. Also if there are leasers from other countries then it can get complicated.


AFAIK, Avianca Holdings is incorporated in the US with its place of business being

8333 Northwest 53rd Street Suite 100 Doral, FL 33166 United States and with 149 employees on the payroll.

Nor sure if this matters or even has anything to do, but most of Avianca fleet is under the N-registry, not Colombia's HK-.


OK, in that case US law will be used (some exceptions). Sorry I wasn't precise, I see it now.
 
dcajet
Topic Author
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Re: Avianca's Chairman: The airline is broke

Fri Aug 30, 2019 12:47 am

Some of the most salient points the new Avianca Holdings' CEO made today in a meeting with the press at Bogota,:

* Avianca Holdings is not bankrupt or in the process of entering this judicial process.

* Punctuality has been improved by 20 points.

* There are 5 pillars that will define the future of Avianca:
Fleet Simplification
Rethink the route network.
Strengthen the financial situation.
Divest some parts of the business.
Improve customer service.

* The airline is not in bankruptcy judicial protection and does not plan to do so.

* Low cost fares will be introduced, starting in September through Ecuador and October in Colombia.

* United and Kingsland want to invest US$250M in Avianca.

* The initial goal is to enhance the operation.

* The airline will be “rethought” and it is a good time to do it coinciding with the 100 years of the company.

* New potential routes are being analyzed in Mexico, Brazil, Central America and Argentina from Bogotá and other hubs.

* A reconfiguration of the interiors of the short and medium range fleet is being evaluated to increase the number of seats

* The current fleet, after the sale and departure of aircraft already announced, will also be re-evaluated with the objective of unifying it.

https://www.nlarenas.com/2019/08/anko-v ... n-quiebra/
Keep calm and wash your hands.
 
dcajet
Topic Author
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Re: Avianca's Chairman: The airline is broke

Fri Aug 30, 2019 10:09 pm

Following yesterday's announcement that AVH was going to receive a further US$250M from Kingsland Holdings and United, today it was made public that Mr. Kriete's Kingsland Holdings has extended a short term, secured loan of US$50M to Avianca Holdings. Will United lend AVH the other $200M? :scratchchin:

Image
Keep calm and wash your hands.
 
abrelosojos
Posts: 4305
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Re: Avianca's CEO: The airline is broke

Sat Aug 31, 2019 8:51 am

dcajet wrote:
Scarebus34 wrote:
abrelosojos wrote:
JESUS. They are in such a mess. It needs to besides Ebramovich though. Their entire commercial team is a joke. Sack all of them, and start again. I hope the new CEO is good.

Saludos,
Alex

Kriete knows what he is doing. He used to run TACA before they merged with Avianca.


I think he means Anko van der Werff, who is now the new Avianca's CEO. Kriete is the Chairman of the Board. My bad with the thread title. Moderators. could the title be changed to Avianca's Chairman? Thanks!


= Yes, I mean Anko van der Werff. I also think Kriete is rather brilliant, and TACA was a very well run airline, and a better brand then AV during the separation days. But, it is not just Ebramovich that got AV to this point. What was the CFO/COO/CCO doing during this time? This is why I think Anko needs to clean their house. I have met their commercial team, and it is a list of B-graders who would never find employment elsewhere.

Saludos,
Alex
Live, and let live.
 
abrelosojos
Posts: 4305
Joined: Sun May 29, 2005 6:48 am

Re: Avianca's Chairman: The airline is broke

Sat Aug 31, 2019 8:57 am

RCS763AV wrote:
To be a fanboy?

Oh my god. If anything I'm critical of many things from the management of the company, to their sometimes flaky customer service, to their recklessness in ordering aircraft and launching routes without proper market studies. Not to mention how there was no arm's length principle in the corporate governance of Avianca Holdings and the other Efromovich companies, which was almost corrupt.

Back to the thread topic, yes, you are interpreting the words in the wrong manner. Kriete himself came out explaining his words as he knows the PR nightmare he created for the company in the face of the unsophisticated public. The airline is not broke, it is in a complex financial situation. Those are two very different situations in the corporate world, not just technicalities.

On the other hand, to show how objective this thread is being, on the last post dcajet said Van der Werff held his conference this morning as part of the "general PR effort to back up the 2020 plan". Well I actually read what VDW had to say:

(i) They are successful in the process of exchanging bonds which have a 2020 maturity. Such process should end on September 11 after which they will be able to access more financing from UA.
(ii) They are not planning to leave capital markets (i.e. the stock exchanges of Bogotá and New York).
(iii) Colombia is what's making money for the company right now. More focus will be put on BOG to the detriment of mainly LIM but also SAL.
(iv) The A320 fleet will receive new, more dense interiors to bring CASM down and better compete with LCCs, as LATAM did a couple of years ago.

So I ask myself, why are all the central american posters in this thread declaring the apocalypse? Why so much hate toward a company that employs so many people and connects the continent providing much needed competition to the LATAM giant? Is it because they decided to focus away from certain countries in your region as they lost money due to an ancient business model which didn't really work anymore?


= What are you talking about? I am not Central American and Venezuela is just one of my 6 passports - and, you can do a search, I disagree with DCAJET on pretty much everything :) ... but, s/he is right on the views of AV. What makes you think BOG and Colombia are making money for AV, while the rest of the network isn't? What makes you think that Central America did not make money for AV? Colombians seem to have an outplaced view of Colombia's place in the world ... is it big? Yes, bigger than say CR or ES, but it is not a México or Brasil. Moreover, within Colombia, AV's cost structure means sooner rather than later, Viva is going to eat their lunch.

AV needs a total strategic rethink. Anko is smart enough, so that is a plus. However, they need to replace everyone else to make this work, and most importantly, make the airline more global. It is way tooo Colombian right now. No airlines in the region have succeeded by having management being entire nationalists.

Saludos,
Alex
Live, and let live.
 
trent772
Posts: 194
Joined: Wed Oct 10, 2012 10:08 pm

Re: Avianca's Chairman: The airline is broke

Sat Aug 31, 2019 4:56 pm

abrelosojos wrote:


AV needs a total strategic rethink. Anko is smart enough, so that is a plus. However, they need to replace everyone else to make this work, and most importantly, make the airline more global. It is way tooo Colombian right now. No airlines in the region have succeeded by having management being entire nationalists.



Well, it appears they have only a short time to pull this off and they are already on burrowed time, things are awfully difficult right now, 14 aircraft sold, elimination of business class on the A320 family and route cancellations, there’s even talk of Munich getting axed.

For the sake of the almost 7000 Avianca employees worldwide, I hope they can turn things around.

One thing remains unanswered, things were supposed to be running smoothly and right on track, one day out of nowhere the CEO quits, soon after Mr. Efromovich gets ousted from the board, Argentina and Brazil ops go bust, a new CEO comes in and suddenly losses increase by 1000%, were Rincon and Efromovich cooking the books to make the airline attractive to investors or what was really going on?
 
RCS763AV
Posts: 3854
Joined: Mon Jun 14, 2004 1:22 am

Re: Avianca's Chairman: The airline is broke

Sun Sep 01, 2019 8:30 am

abrelosojos wrote:
RCS763AV wrote:
To be a fanboy?

Oh my god. If anything I'm critical of many things from the management of the company, to their sometimes flaky customer service, to their recklessness in ordering aircraft and launching routes without proper market studies. Not to mention how there was no arm's length principle in the corporate governance of Avianca Holdings and the other Efromovich companies, which was almost corrupt.

Back to the thread topic, yes, you are interpreting the words in the wrong manner. Kriete himself came out explaining his words as he knows the PR nightmare he created for the company in the face of the unsophisticated public. The airline is not broke, it is in a complex financial situation. Those are two very different situations in the corporate world, not just technicalities.

On the other hand, to show how objective this thread is being, on the last post dcajet said Van der Werff held his conference this morning as part of the "general PR effort to back up the 2020 plan". Well I actually read what VDW had to say:

(i) They are successful in the process of exchanging bonds which have a 2020 maturity. Such process should end on September 11 after which they will be able to access more financing from UA.
(ii) They are not planning to leave capital markets (i.e. the stock exchanges of Bogotá and New York).
(iii) Colombia is what's making money for the company right now. More focus will be put on BOG to the detriment of mainly LIM but also SAL.
(iv) The A320 fleet will receive new, more dense interiors to bring CASM down and better compete with LCCs, as LATAM did a couple of years ago.

So I ask myself, why are all the central american posters in this thread declaring the apocalypse? Why so much hate toward a company that employs so many people and connects the continent providing much needed competition to the LATAM giant? Is it because they decided to focus away from certain countries in your region as they lost money due to an ancient business model which didn't really work anymore?


= What are you talking about? I am not Central American and Venezuela is just one of my 6 passports - and, you can do a search, I disagree with DCAJET on pretty much everything :) ... but, s/he is right on the views of AV. What makes you think BOG and Colombia are making money for AV, while the rest of the network isn't? What makes you think that Central America did not make money for AV? Colombians seem to have an outplaced view of Colombia's place in the world ... is it big? Yes, bigger than say CR or ES, but it is not a México or Brasil. Moreover, within Colombia, AV's cost structure means sooner rather than later, Viva is going to eat their lunch.

AV needs a total strategic rethink. Anko is smart enough, so that is a plus. However, they need to replace everyone else to make this work, and most importantly, make the airline more global. It is way tooo Colombian right now. No airlines in the region have succeeded by having management being entire nationalists.

Saludos,
Alex


I did know you were venezuelan. I don't understand your reply though. I'm not the one saying Colombia is making money for AV, it's the CEO of the airline who has said it multiple times to the press. I'm not giving my personal opinion here in any sense nor do I understand how you would make a statement about "colombians" having a distorted view of their country based on my post.

Also, TACA was not well run. They enjoyed a monopoly/duopoly on most routes within and from/to the Central American region, allowing them to limit capacity and charge $500 fares on 45 minute shuttles between SAL and GUA. Such market dominance started eroding first when Copa set up PTY as a hub and then with the arrival of US LCCs into the region. Then, Kriete knew it was a matter of time before things at TACA would become unsustainable and he needed to consolidate into a larger operation for economies of scale. And voilà, they merged into Avianca Holdings.

Once merged, Avianca started cutting markets which were not profitable for past TACA anymore, namely the SJO hub and several point-to-point operations, which only thrived under a monopolistic business model which didn't work anymore. It also gave scale to other markets in which it saw potential: SAL gained a bunch of new routes and LIM regained MIA and the domestic market beyond CUZ.

Now, fast forward to five years later, the company is in dire need of changing its business model. No one wants business class in the dense yet competitive colombian domestic market, the airline's cash cow. The peruvian domestic experiment just didn't work, maybe because of the same reason (high cost structure). Several routes were launched which were crazy unsustainable, like SAL-CTG or BOG-BOS. As the airline is so indebted, SAL and LIM are marginal and need to undergo cuts at least until CASM is brought down and they are able to compete with the LCCs and LATAM. Cheap fares on comfortable planes don't pay the bills. LIM as a hub might be cut altogether.

This is a company which took more time than it should have in changing its product, because of the corporate governance disaster under Efromovich. These are difficult, but exciting times for the company too. I hope we'll see a rejuvenated, streamlined company which is able to continue competing and serving South America's second and third markets and providing a connection point in SAL to counter Copa in PTY.

BTW, Waaaay too colombian? What does that even mean? Why does nationality matter in an airline's management team? Executives need to be good executives, period. Private organizations are not run with national pride (whatever that concept is), they're run with smart decisions. Replace your executives if they did a bad job. Not because they're from a certain nationality. Really, the things you get to hear from people in this forum...

P.D. Glad dcajet made an objective post about Van der Werff's and the airline's situation after my argument.
 
RCS763AV
Posts: 3854
Joined: Mon Jun 14, 2004 1:22 am

Re: Avianca's Chairman: The airline is broke

Sun Sep 01, 2019 8:37 am

trent772 wrote:
abrelosojos wrote:


AV needs a total strategic rethink. Anko is smart enough, so that is a plus. However, they need to replace everyone else to make this work, and most importantly, make the airline more global. It is way tooo Colombian right now. No airlines in the region have succeeded by having management being entire nationalists.



Well, it appears they have only a short time to pull this off and they are already on burrowed time, things are awfully difficult right now, 14 aircraft sold, elimination of business class on the A320 family and route cancellations, there’s even talk of Munich getting axed.

For the sake of the almost 7000 Avianca employees worldwide, I hope they can turn things around.

One thing remains unanswered, things were supposed to be running smoothly and right on track, one day out of nowhere the CEO quits, soon after Mr. Efromovich gets ousted from the board, Argentina and Brazil ops go bust, a new CEO comes in and suddenly losses increase by 1000%, were Rincon and Efromovich cooking the books to make the airline attractive to investors or what was really going on?


1. Rincón quit because he did not understand how to run an airline. The rumor of a replacement had been going on for months in the Colombian corporate world. The decision had been made even before Efromovich was ousted from the company. This was not out of nowhere.

2. Things had not been running smoothly for a long time. The tipping point was the pilot's strike in 2017. Efromovich had issues with corporate governance which were very bad for the sustainability of the company. He basically did whatever he wanted without taking advice from the board of directors or his management team. This is why Kriete sued him a couple of years ago.

3. Brazil and Argentina have nothing to do with AVH beyond being owned by the same conglomerate and a shady brand licensing agreement which was part of Efromovich's crooked corporate practices.

4. Losses increased 1000% this quarter because they wrote off the 14 sold aircraft from the accounting books.

5. Not only Munich. LIM might get scrapped as a hub altogether.
 
dcajet
Topic Author
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Re: Avianca's Chairman: The airline is broke

Sun Sep 01, 2019 2:56 pm

"Avianca won't die in my hands" says its new CEO, Anko van der Werff. (*)

https://www.eltiempo.com/economia/empre ... esa-407330

(*) Actually the paper used the word "die". He just answered "no" to the question asked by the journalist. ("Will Avianca die in your hands?") (SIC)
Keep calm and wash your hands.
 
trent772
Posts: 194
Joined: Wed Oct 10, 2012 10:08 pm

Re: Avianca's Chairman: The airline is broke

Mon Sep 02, 2019 4:30 pm

RCS763AV wrote:
trent772 wrote:
abrelosojos wrote:


AV needs a total strategic rethink. Anko is smart enough, so that is a plus. However, they need to replace everyone else to make this work, and most importantly, make the airline more global. It is way tooo Colombian right now. No airlines in the region have succeeded by having management being entire nationalists.



Well, it appears they have only a short time to pull this off and they are already on burrowed time, things are awfully difficult right now, 14 aircraft sold, elimination of business class on the A320 family and route cancellations, there’s even talk of Munich getting axed.

For the sake of the almost 7000 Avianca employees worldwide, I hope they can turn things around.

One thing remains unanswered, things were supposed to be running smoothly and right on track, one day out of nowhere the CEO quits, soon after Mr. Efromovich gets ousted from the board, Argentina and Brazil ops go bust, a new CEO comes in and suddenly losses increase by 1000%, were Rincon and Efromovich cooking the books to make the airline attractive to investors or what was really going on?


1. Rincón quit because he did not understand how to run an airline. The rumor of a replacement had been going on for months in the Colombian corporate world. The decision had been made even before Efromovich was ousted from the company. This was not out of nowhere.

2. Things had not been running smoothly for a long time. The tipping point was the pilot's strike in 2017. Efromovich had issues with corporate governance which were very bad for the sustainability of the company. He basically did whatever he wanted without taking advice from the board of directors or his management team. This is why Kriete sued him a couple of years ago.

3. Brazil and Argentina have nothing to do with AVH beyond being owned by the same conglomerate and a shady brand licensing agreement which was part of Efromovich's crooked corporate practices.

4. Losses increased 1000% this quarter because they wrote off the 14 sold aircraft from the accounting books.

5. Not only Munich. LIM might get scrapped as a hub altogether.



Nicely summarized, but:

1. He didn’t quit, he was shown the door, and it took everyone by surprise, literally, he announced his resignation on the 24th of April and his final day was on the 30th of that same month, there was no transition, there was no plan and I hardly believe this was rumored at all, even higher level company officials and news outlets were taken by surprise on this one.

2. Yeah, Mr. Efromovich’s drive-by style management didn’t help things and Rincon’s fear tactics that worked so well during his tenure at Microsoft were never going to work at AV.

3. True, Avianca Brazil/Argentina have nothing to do with AVH, but you shouldn’t forget that when these two ran aground it severely affected AVH’s stock price, so much so that AVH was forced to come out with a press release stating that they had nothing to do with AV Br/Ar but by then the damage had already been done.

4. Ok, if you say so, both Portafolio and Semana reported it differently.

5. Closing the LIM hub is probably for the better, I feel for those whose jobs are in jeopardy but with the cancellation of domestic flights altogether and the few international flights left there’s no point in keeping the hub open.
Last edited by trent772 on Mon Sep 02, 2019 4:51 pm, edited 1 time in total.
 
trent772
Posts: 194
Joined: Wed Oct 10, 2012 10:08 pm

Re: Avianca's Chairman: The airline is broke

Mon Sep 02, 2019 4:39 pm

dcajet wrote:
"Avianca won't die in my hands" says its new CEO, Anko van der Werff. (*)

https://www.eltiempo.com/economia/empre ... esa-407330

(*) Actually the paper used the word "die". He just answered "no" to the question asked by the journalist. ("Will Avianca die in your hands?") (SIC)


Interesting interview, it strikes me that the widebody fleet will be up for review, is it me or he may have implied that it was too big? maybe for a new leaner and more streamlined Avianca it’s a bit oversized? If they were to shrink it who would go? 330 or 787??

The 330 is cheaper to operate, they would keep commonality throughout the fleet but it burns more fuel, the 787 is more expensive to operate, they lose the savings in training that Airbus offers but it burns significantly less fuel.
 
RCS763AV
Posts: 3854
Joined: Mon Jun 14, 2004 1:22 am

Re: Avianca's Chairman: The airline is broke

Thu Sep 12, 2019 5:16 pm

trent772 wrote:
RCS763AV wrote:
trent772 wrote:

Well, it appears they have only a short time to pull this off and they are already on burrowed time, things are awfully difficult right now, 14 aircraft sold, elimination of business class on the A320 family and route cancellations, there’s even talk of Munich getting axed.

For the sake of the almost 7000 Avianca employees worldwide, I hope they can turn things around.

One thing remains unanswered, things were supposed to be running smoothly and right on track, one day out of nowhere the CEO quits, soon after Mr. Efromovich gets ousted from the board, Argentina and Brazil ops go bust, a new CEO comes in and suddenly losses increase by 1000%, were Rincon and Efromovich cooking the books to make the airline attractive to investors or what was really going on?


1. Rincón quit because he did not understand how to run an airline. The rumor of a replacement had been going on for months in the Colombian corporate world. The decision had been made even before Efromovich was ousted from the company. This was not out of nowhere.

2. Things had not been running smoothly for a long time. The tipping point was the pilot's strike in 2017. Efromovich had issues with corporate governance which were very bad for the sustainability of the company. He basically did whatever he wanted without taking advice from the board of directors or his management team. This is why Kriete sued him a couple of years ago.

3. Brazil and Argentina have nothing to do with AVH beyond being owned by the same conglomerate and a shady brand licensing agreement which was part of Efromovich's crooked corporate practices.

4. Losses increased 1000% this quarter because they wrote off the 14 sold aircraft from the accounting books.

5. Not only Munich. LIM might get scrapped as a hub altogether.



Nicely summarized, but:

1. He didn’t quit, he was shown the door, and it took everyone by surprise, literally, he announced his resignation on the 24th of April and his final day was on the 30th of that same month, there was no transition, there was no plan and I hardly believe this was rumored at all, even higher level company officials and news outlets were taken by surprise on this one.

2. Yeah, Mr. Efromovich’s drive-by style management didn’t help things and Rincon’s fear tactics that worked so well during his tenure at Microsoft were never going to work at AV.

3. True, Avianca Brazil/Argentina have nothing to do with AVH, but you shouldn’t forget that when these two ran aground it severely affected AVH’s stock price, so much so that AVH was forced to come out with a press release stating that they had nothing to do with AV Br/Ar but by then the damage had already been done.

4. Ok, if you say so, both Portafolio and Semana reported it differently.

5. Closing the LIM hub is probably for the better, I feel for those whose jobs are in jeopardy but with the cancellation of domestic flights altogether and the few international flights left there’s no point in keeping the hub open.


For 4, Slide number 6 on the AVH presentation to capital markets:

http://s22.q4cdn.com/896295308/files/doc_financials/2019/q2/updated/Presentación_Resultados_2T_2019-V2-(1).pdf
 
DCA350
Posts: 160
Joined: Sat May 04, 2019 7:27 pm

Re: Avianca's Chairman: The airline is broke

Thu Sep 12, 2019 5:50 pm

RCS763AV wrote:
trent772 wrote:
RCS763AV wrote:

1. Rincón quit because he did not understand how to run an airline. The rumor of a replacement had been going on for months in the Colombian corporate world. The decision had been made even before Efromovich was ousted from the company. This was not out of nowhere.

2. Things had not been running smoothly for a long time. The tipping point was the pilot's strike in 2017. Efromovich had issues with corporate governance which were very bad for the sustainability of the company. He basically did whatever he wanted without taking advice from the board of directors or his management team. This is why Kriete sued him a couple of years ago.

3. Brazil and Argentina have nothing to do with AVH beyond being owned by the same conglomerate and a shady brand licensing agreement which was part of Efromovich's crooked corporate practices.

4. Losses increased 1000% this quarter because they wrote off the 14 sold aircraft from the accounting books.

5. Not only Munich. LIM might get scrapped as a hub altogether.



Nicely summarized, but:

1. He didn’t quit, he was shown the door, and it took everyone by surprise, literally, he announced his resignation on the 24th of April and his final day was on the 30th of that same month, there was no transition, there was no plan and I hardly believe this was rumored at all, even higher level company officials and news outlets were taken by surprise on this one.

2. Yeah, Mr. Efromovich’s drive-by style management didn’t help things and Rincon’s fear tactics that worked so well during his tenure at Microsoft were never going to work at AV.

3. True, Avianca Brazil/Argentina have nothing to do with AVH, but you shouldn’t forget that when these two ran aground it severely affected AVH’s stock price, so much so that AVH was forced to come out with a press release stating that they had nothing to do with AV Br/Ar but by then the damage had already been done.

4. Ok, if you say so, both Portafolio and Semana reported it differently.

5. Closing the LIM hub is probably for the better, I feel for those whose jobs are in jeopardy but with the cancellation of domestic flights altogether and the few international flights left there’s no point in keeping the hub open.


For 4, Slide number 6 on the AVH presentation to capital markets:

http://s22.q4cdn.com/896295308/files/doc_financials/2019/q2/updated/Presentación_Resultados_2T_2019-V2-(1).pdf


Thanks, interesting presentation, but I'm a little confused. It states that they operate A300Fs but as far as I've seen they only operate A330Fs. It also mentions two 787Fs? Anybody know what that stands for as there is no 787F in existence at this time.
 
RCS763AV
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Re: Avianca's Chairman: The airline is broke

Fri Sep 13, 2019 5:18 am

The A300F are the ones operated by Aerounión in Mexico which is owned by AVH. The 787F must have been a typo, I do think they operate 2 767F though.
 
juliuswong
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Re: Avianca's Chairman: The airline is broke

Fri Sep 13, 2019 8:16 am

trent772 wrote:
dcajet wrote:
"Avianca won't die in my hands" says its new CEO, Anko van der Werff. (*)

https://www.eltiempo.com/economia/empre ... esa-407330

(*) Actually the paper used the word "die". He just answered "no" to the question asked by the journalist. ("Will Avianca die in your hands?") (SIC)


Interesting interview, it strikes me that the widebody fleet will be up for review, is it me or he may have implied that it was too big? maybe for a new leaner and more streamlined Avianca it’s a bit oversized? If they were to shrink it who would go? 330 or 787??

The 330 is cheaper to operate, they would keep commonality throughout the fleet but it burns more fuel, the 787 is more expensive to operate, they lose the savings in training that Airbus offers but it burns significantly less fuel.

Not sure I can put this here. They should have stick to A330ceo since they are almost brand new and more or least as capable as brand new 787. The 787 came online at difficult time and coupled with other factors drove Avianca brand into downward spiral. Why add another OEM when their current fleet was doing ok. Not perfect, but ok. If I could remember back then, they even have issue paying off or taking delivery of A320ceo and A330ceo. Two eventually went to Iran Air.
- Life is a journey, travel it well -
 
dcajet
Topic Author
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Re: Avianca's Chairman: The airline is broke

Fri Sep 13, 2019 4:58 pm

juliuswong wrote:
trent772 wrote:
dcajet wrote:
"Avianca won't die in my hands" says its new CEO, Anko van der Werff. (*)

https://www.eltiempo.com/economia/empre ... esa-407330

(*) Actually the paper used the word "die". He just answered "no" to the question asked by the journalist. ("Will Avianca die in your hands?") (SIC)


Interesting interview, it strikes me that the widebody fleet will be up for review, is it me or he may have implied that it was too big? maybe for a new leaner and more streamlined Avianca it’s a bit oversized? If they were to shrink it who would go? 330 or 787??

The 330 is cheaper to operate, they would keep commonality throughout the fleet but it burns more fuel, the 787 is more expensive to operate, they lose the savings in training that Airbus offers but it burns significantly less fuel.

Not sure I can put this here. They should have stick to A330ceo since they are almost brand new and more or least as capable as brand new 787. The 787 came online at difficult time and coupled with other factors drove Avianca brand into downward spiral. Why add another OEM when their current fleet was doing ok. Not perfect, but ok. If I could remember back then, they even have issue paying off or taking delivery of A320ceo and A330ceo. Two eventually went to Iran Air.


IIRC, EP-IJA/B were originally destined for Avianca Brazil but not taken up. Stored for like 2 years they eventually found a home in Iran. Now, the original order may have been placed by AVH or Synergy... hard to know with the way it was structured under Efromovich.
Keep calm and wash your hands.
 
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mercure1
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Re: Avianca's Chairman: The airline is broke

Mon Oct 07, 2019 4:09 pm

Avianca Holdings, United Airlines And Kingsland Holdings Agree To Terms For Loan To Be Provided To Avianca
https://newsroom.aviator.aero/avianca-h ... o-avianca/

Avianca Holdings has reached agreement with United Airlines and Kingsland Holdings S.A. regarding the terms of proposed financing to AVH of up to US$250 million, and established the conditions precedent to the transaction.
Funding remains subject to certain other conditions, including the successful conclusion of Avianca's debt reprofiling plan in a manner consistent with the Avianca 2021 plan, as well as the closing of the company's exchange offer for its US$550 million 2020 bond.
"United congratulates Avianca Holdings on this important step in its Avianca 2021 plan. We look forward to Avianca's successful achievement of agreements with its other stakeholders, and to working together with Avianca to complete final documentation for our loan," said John Gebo, United's senior vice president of Alliances.
mercure f-wtcc
 
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janders
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Re: Avianca's Chairman: The airline is broke

Mon Nov 18, 2019 5:42 pm

Some more positive news and movement.



Avianca creditors approve restructuring plans
https://aerolatinnews.com/destacado/acr ... cturacion/

Avianca Holdings SA has reached agreements with a large majority of creditors in its debt restructuring plan for the airline while seeking a transformation, company executives said.

Avianca, one of the largest airlines in Latin America, is carrying out an ambitious plan to reverse financial losses and restore investor confidence by reducing leverage, reducing the size of its fleet and eliminating unprofitable routes, while which adds destinations and focuses on flights through Bogotá.
"We make war that we may live in peace." -- Aristotle

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