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This April 30, Avianca has to present the annual report of its financial statements to its investors in the United States, according to requirements for that country, but the situation of uncertainty generated by COVID-19, led the company to report that it will present its fiscal year balances on June 14, 2020.
In relevant information published in Supersociedades, Avianca Holding S.A. He explained that for “being an airline with operations in numerous jurisdictions, the COVID-19 pandemic has turned out to be an unprecedented challenge for Avianca, and given the complexities of the moment, they have focused on overcoming the complexities for“ their business and their employees ”
The airline states in the document that “they cannot foresee or quantify the scope of the impact of COVID-19 on its operational and financial performance” And this “will depend on any event related to the spread of the outbreak, the duration, the scope of quarantine measures, travel restrictions and the impact on general demand for air travel, which are highly uncertain and cannot be predict”.
To face the economic crisis, Avianca indicated that they have had all the non-essential capital expenses and have temporarily deferred the payments of some of their long-term leases, “as well as the capital payments on certain debt obligations.”
The company recognizes that these decisions have generated “Currently default under some of the financing contracts and other obligations.”
“If our operations remain suspended for an extended period, we may have to take additional steps to preserve our business and protect our cash position as much as possible,” Avianca said.
Some of the decisions
Since March 19, Avianca has taken measures to face the economic crisis among which stand out the total suspension of the international operation and 84% reduction in domestic operations.
Regarding labor measures, it decided the freezing of contracts, the implementation as soon as possible of unpaid voluntary licenses, suspensions of work contracts, negotiations of payment conditions with suppliers and allies, and postponement of non-essential costs and capital expenses.
“This is without a doubt the biggest crisis in the airline industry in history. The decisions we are making hurt us, they are extremely difficult, but we must be flexible and face the situation. The total suspension of our international operation and the strong contraction of the domestic one forces us to most of our employees go homeAnko van der Werff, president and CEO of Avianca Holdings, said in March.
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