Avianca sells business and cancels orders for Airbus aircraft
Avianca Holding initiated a process of cost reduction and adjustments to its investment plans to improve its profitability.
In the first quarter of the year, the airline canceled an order for 17 Airbus aircraft and requested a postponement for the incorporation of another 35 aircraft, thus generating a reduction of 2 billion 600 million dollars in financial commitments and protection in cash resources by 350 million dollars.
The airline also sold its holdings in CAE crew training businesses, where it had 50%, and in Contact Center-BPO Getcom, where it also had 50%.
Avianca also postponed leases in terms of a contract for certain aircraft, which will save 14 million dollars a year. Avianca belongs to Synergy Group, the industrial conglomerate that has an investment of 100 million dollars in Aeromar pending.
In the first quarter, Avianca obtained 1 billion 150 million dollars in operational revenues and transported 7.7 million passengers, 4.3% more compared to the same period of 2018.
"We are pleased to have made significant progress on different fronts of the corporate transformation plan, which is a good start for the consolidation of our new strategy that will be reflected in a better financial position," said Roberto Held, senior vice president of Finance at Avianca Holding.
The reduction of expenses and disinvestment responds to the rise in fuel prices, the reduction in passenger demand in certain Latin American markets and the rising cost of the dollar. Avianca also canceled 16 routes during the first quarter, mainly to Central and North America.
Although it announced an increase in capacity from Bogotá to Cali, Medellín, Santiago de Chile, Orlando, and Barcelona, looking for the most profitable routes. It also formally initiated the operation of Regional Express Americas, the airline specializing in regional flights to the interior of Colombia.
Avianca closed the first quarter with a fleet of 190 aircraft, a number that will be reduced in the coming months after the departure of the Embraer 190 and the Cessna 208 fleet when the sale of the regional airlines SANSA and La Costeña operating in Costa Rica and Nicaragua is completed.
By Mexicanist Source Agencies