Avianca Not Renewing Certain Employment Contracts Due To Bankruptcy & Pandemic

Avianca has announced to its employees new options regarding continuance of their employment contracts in light of the Coronavirus COVID-19 Pandemic, which currently include unpaid leaves of absence for a 6 or 12 month period and a voluntary early retirement plan for employees subject to fixed-term contracts. Additionally, the airline announced that due to the significant financial impact caused by COVID, it will not be able to renew fixed-term contracts.

The adopted measures reflect that Avianca’s post-COVID operations will be significantly reduced once flights resume , thus requiring a reduction in personnel to operate the airline.

Since the inception of the pandemic, the company has adopted a variety of alternatives, such as the reduction of salaries by mutual agreement, reduction of hours, unpaid voluntary leaves of absence, and the recent filing for Chapter 11 protection. In Peru, the company has been embroiled in a legal dispute for allegedly reneging on an early retirement dispute with former employees.

Renato Covelo, Chief People and Legal Officer of Avianca, noted that “despite our original intention to maintain all of our workforce , the profound effects that the crisis has had on the company, forced us to take these measures despite the considerable efforts we have made over the past three months. The uncertainty in terms of demand recovery and the impossibility of resuming operations in the short term lead us to adjust the size of the company in line with the projected size of our post-COVID operations. We will continue working to ensure the company’s continuity in the market and adapt to the gradual recovery of demand.”