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Brazilian airline Avianca Brasil declares bankruptcy

  • News Desk

    Agence France-Presse

Sao Paulo, Brazil   /   Wed, December 12, 2018   /   09:09 am
Brazilian airline Avianca Brasil declares bankruptcy In this file photo taken on August 19, 2015 an Avianca airliner prepares to land in the Santos Dumont airport (not framed) as sailing boats compete in the International Sailing Regatta in the Guanabara Bay in Rio de Janeiro, Brazil. Avianca Brazil, overwhelmed by debts, recoursed to the bankruptcy law on December 11, 2018, the Court of Justice of the state of Sao Paulo reported. VANDERLEI ALMEIDA / AFP (AFP/Vanderlei Almeida)

Cash-strapped Avianca Brasil, the country's fourth-largest airline, on Tuesday sought bankruptcy protection from creditors but reassured passengers that flights will continue.

"Due to resistance from the lessors (of their aircraft) to reaching a friendly settlement, we have filed seeking protection from creditors, to protect clients and passengers," a company statement said.

Operations are not expected to be affected and "passengers can have complete peace of mind to make reservations and buy tickets, since all sales will be honored and flights will be operating," it said.

The airline has debts of almost 493 million reais ($127 million) with multiple creditors, the business daily Valor reported.

Avianca Brasil, a brand of Oceanair Linhas Aereas SA (Oceanair), is not part of the group Avianca Holdings S.A, based in Colombia.

But both are parts of a holding company led by the same investor, German Efromovich.

Brazilian media said the carrier is in debt to creditors including state oil giant Petrobras and Sao Paulo's Guarulhos Airport.

Avianca Brasil serves domestic and international routes with 60 jets. The company is facing lawsuits for the return of 26 planes and 52 engines, Valor said.

The airline recorded net losses in the first half of the year of 175.6 million reais, up 24.4 percent from the same period last year.