Avianca Holdings Initiates Voluntary Reorganization Proceedings

- Despite Effective Debt Reprofiling in 2019 and Successful Execution of its "Avianca 2021" Plan through Mid-March, Speed and Scale of Dramatic COVID-19 Crisis Impact Necessitates Avianca's Chapter 11 Filing in New York

- Court-Supervised Process is Intended to Continue Avianca's Operations, Preserve Jobs, Maintain Connectivity for Avianca's More Than 30 Million Annual Passengers, and Promote Economic Recovery in Colombia and Company's Other Core Markets

- Avianca is Committed to Continue Serving Customers with Safe, Reliable Air Travel and High-Quality Service as COVID-19 Travel Restrictions are Gradually Lifted

- Company Continues Discussions with Governments Regarding Financial Support for Successful Process

BOGOTA, Colombia, May 10, 2020 /PRNewswire/ -- Avianca Holdings S.A. (NYSE: AVH, BVC: PFAVH) (the "Company" or "Avianca") and certain of its subsidiaries and affiliates today filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York to preserve and reorganize Avianca's businesses. LifeMiles, Avianca's loyalty program, is administered by a separate company and is not part of the Chapter 11 filing.

The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association. Avianca's scheduled passenger operations have been grounded since mid-March, reducing its consolidated revenue by over 80% and placing significant pressure on its cash reserves.

Through the Chapter 11 reorganization process, Avianca intends to:

• Protect and preserve operations so Avianca can continue to operate and serve customers with safe and reliable air travel, under the strictest biosafety protocols, as COVID-19 travel restrictions are gradually lifted;
• Ensure connectivity and drive investment and tourism by continuing as Colombia's flagship airline, serving over 50% of the domestic market in Colombia and providing essential non-stop service across South America, North America and European markets as well as continuing cargo operations, playing a key role in the economic recovery of Colombia and the Company's other core markets following the COVID-19 pandemic;
• Preserve jobs in Colombia and other markets where the Company operates, with Avianca directly responsible for more than 21,000 jobs throughout Latin America, including more than 14,000 in Colombia, and working with more than 3,000 vendors; and
• Restructure the Company's balance sheet and obligations to enable Avianca to navigate the effects of the COVID-19 pandemic as well as comprehensively address liabilities, leases, aircraft orders and other commitments.

"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. "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."