Avianca Holdings S.A., Colombia’s national carrier, has filed for Chapter 11 bankruptcy protection in the United States court. One of the oldest airlines in the world aims to reorganise its business to continue operations.

According to a statement, the “filing was necessitated by the unforeseeable impact of the COVID-19 pandemic”. Although Avianca is the second largest airline in Latin America, its passenger services have been grounded since late March reducing the company’s income by over 80%.

Reuters also reports that the carrier had been battling with financial problems prior to the coronavirus spread and failed “to meet a bond payment deadline”.

“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic”, said Anko van der Werff, Chief Executive Officer of Avianca.

Now the company is “seeking financial support from the governments of the countries where it provides essential services” to secure additional liquidity.

In case Avianca, responsible for over 21,000 jobs throughout Latin America, fails to come out of bankruptcy, it will become the first major airline to collapse amid the coronavirus impacts.

The flag carrier says that the measure was inevitable to address its “financial challenges” and emerge “from its court-supervised reorganization as a highly competitive and successful carrier in the Americas”.

Nevertheless, Avianca hopes to further operate its flights while the process takes place.

In the early 2000s Avianca already was on the edge of bankruptcy, but was rescued by the entrepreneur German Efromovich.