Avianca Holdings has filed for Chapter 11 bankruptcy protection in New York, citing “the unforeseeable impact of the Covid-19 pandemic”.

Colombian flag carrier Avianca is the second largest airline in Latin America after LATAM, and one of the oldest continually-running carriers worldwide, having celebrated its 100th anniversary last year.

The Star Alliance carrier said it would continue to operate during the process, although note that its flights have been grounded since mid-March due to the coronavirus crisis.

The company says that it “continues to be engaged in discussions with the government of Colombia, as well as those of its other key markets, regarding financing structures that would provide additional liquidity through the Chapter 11 process and play a vital role in ensuring that the Company emerges from its court-supervised reorganization as a highly competitive and successful carrier in the Americas”.

Avianca serves over 50 per cent of the domestic market in Colombia, and says it is “directly responsible for more than 21,000 jobs throughout Latin America, including more than 14,000 in Colombia”.

The group had already been in the process of restructuring and “debt reprofiling” prior to the coronavirus pandemic, but CEO Anko van der Werff said that “Despite the positive results yielded by our ‘Avianca 2021’ plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges”.

“When government-mandated air travel restrictions are lifted and we are able to gradually resume our passenger flights, we look forward to welcoming back our furloughed employees and playing a leading role in restarting the economy in Colombia and our other key markets,” continued Werff.

“We greatly appreciate the dedication of our employees to Avianca and to serving the more than 30 million passengers that fly our airline each year. We remain committed to our purpose to connect people, families and businesses.”

The Chapter 11 filing affects 39 subsidiaries under the Avianca Holdings parent company, including Avianca Ecuador, Avianca Costa Rica, and Taca International Airlines.

The group’s loyalty programme Life Miles is however not affected, and Avianca said that customers would continue to be able to redeem miles, and access lounges and other benefits such as priority check-in and upgrades.

Subsidiary Avianca Brasil ceased operations in late 2018, and officially left Star Alliance (in which it had been an affiliate member) last year.

Avianca is the third high profile carrier to seek bankruptcy protection in recent weeks, following Virgin Australia and Air Mauritius.