On the eve of its first anniversary, Colombia's Alianza Summa grouping has placed the US division of Avianca under court-supervised reorganisation in New York.
This may be the first time a foreign airline has sought protection solely from a US bankruptcy court, a move Summa justifies on the grounds that most of Avianca's $130 million debt is US-based, largely in aircraft leases.
This Chapter 11 filing appears to be more calculated than most. Avianca has already proposed a reorganisation plan to the court and arranged $17-18 million in debtor-in-possession financing, mostly from shareholders. Juan Emilio Posada, Summa's president, hopes to renegotiate Avianca's aircraft leases and other debts within the next 60 days and emerge from bankruptcy before year-end.
Summa launched the formal integration of Colombia's three main carriers, Avianca, Aces, and Sam, a year ago on 20 May. Most of the operational integration is already finished. The arrival of three new Airbus A320s finishes its fleet renewal plan. Summa's focus now is on labour relations and finance.
Its 2002 annual loss dropped to 86.1 billion pesos ($29 million) compared to 289.6 billion pesos the year before. This reflects improved efficiencies from integration, as annual traffic also fell by 1.4%. Posada predicts by next year the alliance will break even. Rising fuel prices and the downward spiral of Colombia's peso are his biggest worries.
Alliances with overseas carriers is a growing part of Summa's hard currency revenue. It already codeshares with Air France on the Paris-Bogota route, and expanded that in March when Air France added flights. Washington has approved the first phase of Summa's codeshare with Delta Air Lines. In the next two months Summa hopes to have clearance to add Delta's code to its flights within and south of Colombia.
But Posada is in no rush to join a global alliance. "We must look at the aggregate of alliance synergies in each global partnership," he says. For now, he prefers bilateral deals demanding less investment and allowing "more focus".
Source: Airline Business
