Now that Avianca is exiting its Chapter 11 bankruptcy, the airline is ready to grow by having up to 200 routes in the next two years. Additionally, the South American carrier aims to reduce ticket fares by up to 30% in the future, allowing it to better compete against low-cost operators in the region. Let’s investigate further.
Avianca’s 200 routes
Earlier this month, Avianca announced it will emerge from Chapter 11 bankruptcy. The airline stated that it had raised US$1.7 billion in investments and now has a stronger balance sheet, additional liquidity, and has reduced its debt.
Avianca is now looking to the future after going back-to-back financial reorganizations. On Thursday, Avianca showcased its new strategy, “Avianca para todos” (Avianca for everyone).
As part of the plan, Avianca aims to have more than 200 active routes and 125 active aircraft in the next two years. If executed correctly, it would mean Avianca would launch 20% more routes than it had in pre-pandemic times.
According to Flight Connections, Avianca currently serves 25 domestic and 43 international destinations in 23 countries. Cirium’s database states that Avianca is currently operating 114 routes as of December 2021.
The drop in fares
Additionally, this new plan combines the legacy carrier experience Avianca has had during its first century of history with certain low-cost elements that will allow the airline to compete better in South America.
Low-cost airlines have been booming in Latin America. In its Plan of Reorganization, Avianca stated that the LCC business model has been gaining increasing momentum in the Latin American aviation market. The penetration of these carriers in Avianca’s home markets has driven significant and lasting downward pressure on fares, said the airline.
As reported by Portafolio, Adrian Neuhauser, Avianca’s CEO said,
“We are going to continue to be competitive; we are going to keep lowering prices and, in the context of expanding the market, we are looking to make this airline viable in the long term. The company has to be successful.”
With these new measures, Avianca has reduced by 15% its airfares compared to 2019. Moreover, it expects to reduce them further by 28% to 30% in the next few years, said Neuhauser.
The Avianca of the future
Avianca is positioning itself to last another century (it is the second-oldest active carrier in the world; it turned 100 in 2019). The airline has simplified its fleet. For example, it has decided to operate a single Boeing 787 widebody fleet for the long-haul market. It is also densifying the cabins of its Airbus A320 aircraft. Avianca aims to have over 448 daily flights, serving more than 58,000 daily passengers in the near future. It wants to have a 90% punctuality rate, according to local media outlet Aviacionline.
Adrian Neuhauser stated,
“We have the opportunity to reinvent ourselves thanks to Chapter 11. We are going to combine what has been our traditional attributes with what we consider the best low-cost attributes. We are not going to be low-cost, but we are going to take care of what the low-cost takes care of today.”
Are you eager to fly with the reorganized Avianca? Let us know in the comments below.
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