Key Points:

  • Avianca plans to invest $473 million to increase its fleet with an addition of 16 aircraft, aiming to enhance its daily domestic flights from 600 to 750, marking nearly a 25% surge.

  • The significant expansion will be funded through Avianca’s available cash along with accruing extra debt from leases, as articulated by CEO Adrian Neuhaser.

  • Avianca intends to foster employment by creating approximately 1,200 new positions, with some recruits being sourced from the now-defunct Viva Air.

Avianca to Finance Fleet Expansion Through Cash Reserves and Additional Debt

BOGOTA —Avianca, Colombia's flag-carrier airline, is all set to undertake what Chief Executive Adrian Neuhauser describes as an "unprecedented growth" in its operation history. Speaking at a press conference in Bogota, Neuhauser announced an investment of $473 million targeted to augment the airline's fleet by 16 new aircraft. This addition is anticipated to enhance the company’s daily domestic flight service by nearly 25%, escalating from 600 to 750 flights.

Detailing the financial logistics of this ambitious plan, Neuhauser mentioned that the acquisition of these aircraft would be financed through Avianca's existing cash reserves and additional debt incurred from leases. The CEO emphasized that this hefty investment is designed to significantly expand the airline's seat capacity, forecasting an increment of almost one million seats on a weekly basis.

The fleet enlargement strategy outlines the lease of 14 Airbus A320 NEO along with two A320 CEO planes. These aircraft are slated to integrate with Avianca’s existing fleet sequentially from October to December end, furthering the airline’s objective to expand its route offerings and enrich customer experience through augmented service frequency.

Accompanying the fleet growth is an expansion in the airline’s workforce, as Neuhauser revealed a plan to hire around 1,200 new employees. Interestingly, a segment of this new workforce will comprise individuals from Viva Air, a formerly operating Colombian budget carrier. It is to be noted that Avianca had previously initiated steps to acquire Viva Air but retracted from the deal owing to certain prerequisites set forth by Colombia's civil aviation regulator.