With the COVID-19 pandemic continuing to affect the global economy, some airlines brand that are not able to find the monetary assistance from their respective domestic governments are now getting themselves in ever more tough situations. Unfortunately, the current spotlight is on Colombian carrier Avianca, which on May of 10th 2020 filed for Chapter 11 bankruptcy safety in New York. The world renowned aviation company Avianca, which is South America’s second-largest airline, is at verge of bankruptcy. The parent company Avianca Holdings filed for bankruptcy protection in a court of New York so as to avoid the payment of $65 million of debt to its creditors. Affected by the corona virus crisis, Avianca has not been flying regularly since the end of March, but the financial situation has already been serious because it hasn’t been known on a large enough scale to reach $10 billion in debt.
It is worth citing that the outbreak of the coronavirus primarily found its doors through the traveling of passengers across borders via flights. This cross-border travelling became the primary cause of the virus transmission. As a result of this, strict government protocols were enforced to cease the flights operation for an indefinite period. Hospitality, travel & tourism, aviation, recreation and many others, are all interrelated industry verticals and witness almost a similar effect due to the external dynamics. These dynamics, if favorable- stimulate development and ultimately, the unfavorable ones equally pose huge risks on these industries’ growth.
The complete lockdown situations in various economies have been enforced as the number of new corona cases continues to rise, with measures such as social distancing. This has resulted travel and outings ban, along with the ban on gathering of large community events. Hospitality industry encompassing food and beverage, travel and tourism, accommodation and aviation has suffered the most due to such bans. Further, the cancelation of various big events caused the direct economic loss to the aviation sector such as Facebook’s F8 event, Google I/O, SXSW, Mobile World Congress, and the massive video gaming conference Electronic Entertainment Expo (E3).
