Avianca warns that without a loan from the Colombian Government its operation will be unviable.

Avianca formally filed an appeal for reinstatement and a subsidy for the precautionary measure decreed by the Administrative Court of Cundinamarca ordering the suspension of the loan of up to US$370 million by the Colombian Government, published Valora Analitik.

See also: Avianca will resume its international operation from El Salvador September 19.

According to Avianca, the appeal presented was based on five argumentative points.

The first of these has to do with the fact that the loan refers to favorable economic conditions for Colombia since the financing includes, among others, guarantees on assets that according to the airline (based on “objective valuations” of investment banks) represent double the financing.

This, in addition to the fact that the interests of the loan, of a minimum of 11% annualized, in dollars, plus commissions, “are significantly higher than the cost of sovereign funding of Colombia”.

See also: Colombia: Spirit Airlines to restart flights between Fort Lauderdale and Cartagena.

Secondly, Avianca says that the precautionary measure puts the company’s survival at risk, as well as the country’s air connectivity. “Avianca would no longer receive fresh resources and would suffer an even greater reduction in its liquidity levels, which would make its operation unviable,” the firm says in the appeal.

Third, the Administrative Court’s decision would represent, over the next five years, a loss of 123,000 jobs in Colombia, per year; as well as a blow to the national economy of close to $31 billion (3.19% of the national GDP).

In addition, tax collection would be seriously affected, according to the airline, as Colombia’s coffers would not receive nearly $1.3 billion in that same period.

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