Finance Colombia » Avianca Rebuked By Colombia’s President After Announcing Ticket Sales For Unauthorized Flights

Colombian airline Avianca (NYSE: AVH, BVC: PFAVH) has been forced to shutter ticket sales operations after receiving a strong, televised chastening by Colombia’s President Ivan Duque. The airline is in an existential crisis, already weak financially before the Coronavirus COVID-19 Pandemic closed Colombian airspace. Last Thursday, Avianca sent an email with the subject “#AviancaSeguiráVolando por Colombia en Mayo” or “Avianca continues to fly for Colombia in May” to passengers in their database announcing “Fly for Colombia from May 11!” The airline announced ticket sales for flights from May 11th between Bogotá, Medellín, Cartagena, Cali, Barranquilla, Santa Marta & Cali. The airline also announced safety measures, such as social distancing and enhanced disinfection. “Buy now” the email said. “Cool your jets…” Apparently annoyed at the United Airlines (NASDAQ: UAL)-controlled carrier, Colombia’s President Ivan Duque took to the airwaves on May 1st, a holiday in Colombia, to chasten the airline, where his own sister is a high-level executive, in a televised rebuke. “I want to give a very clear message about a theme. I was advised yesterday, at the end of the afternoon—actually it was at night—that ‘some airlines’ were beginning to sell tickets starting May 11. I want to be very clear: No airline is authorized to sell tickets in Colombia after May 11,” said Duque. “We have been very clear that who determines the moment when air traffic proceeds will be the national government.” Avianca, under pressure to find cash and with scarce revenues to pay wages, selling tickets was one way to bring in revenues, even though they were unauthorized. The airline has been appealing to the Colombian government for a bailout, but faces public opposition as the airline has infuriated passengers with operational issues in recent years, faces multiple legal scandals, is legally based in Panamá, and entirely foreign controlled. "Buy now” the email said. Regañado (chastened) as is said in Spanish, Avianca sent out a corrective email last Saturday and removed the offer from its website. By order of the Transportation Superintendency, AVIANCA rectifies its advertising AVIANCA S.A. regrets the confusion that the offer published on April 30, 2020 called Colombia #SeguiráVolando" (Will Continue Flying) and/or "Vuela por Colombia” (fly for Colombia) as of May 11 and/or “#AviancaSeguiráVolando por Colombia en Mayo" (Avianca Will Continue Flying For Colombia In May), has been able to generate and rectify said advertising informing users and consumers of the following: On April 30, 2020, through publications made through commercial emails sent to customers and its website, AVIANCA S.A. announced the availability of seven domestic routes, from May 11 to 31, 2020, and in which a 5% VAT would be paid. Although the information published by AVIANCA S.A. was based on an understanding of the regulations in force, the offer sought to inform customers that the company was ready to operate and offer its customers flights as soon as the suspension of domestic operation provided for in decree 593 of 2020 still in force expired. Following the instructions given by the National Government according to which "the operation of domestic flights is not yet authorized, therefore, there is no certainty regarding the date when it will be allowed to operate again and consequently resume flights", AVIANCA S.A. has proceeded to cancel all flights advertised in said advertisement. On April 30, 2020, through publications made through commercial emails sent to customers and its website, AVIANCA S.A. announced the availability of seven domestic routes, from May 11 to 31, 2020, and in which a 5% VAT would be paid. Although the information published by AVIANCA S.A. was based on an understanding of the regulations in force, the offer sought to inform customers that the company was ready to operate and offer its customers flights as soon as the suspension of domestic operation provided for in decree 593 of 2020 still in force expired. We will work hand in hand with the authorities to define and communicate the dates of restarting operations and to continue fulfilling our mission to connect the country and our passengers. Since the health emergency generated by the Covid-19 began, at Avianca we have continuously adjusted our itineraries to be prepared to fly when the suspension of flights is lifted, always under the strictest biosafety protocols.