Avianca to pack more seats into planes as part of recovery plan, executive says

BOGOTA (Reuters) – Latin American airline Avianca AVT_p.CN will look to increase the number of passengers it can fit into a plane without enlarging its fleet as part of its efforts to overcome ongoing financial problems, its chief executive said on Thursday.

A video was released on social media this week showing president of the board Roberto Kriete telling employees that the airline was “broke.” The airline said the video was obtained illegally and denied that it was in a bankruptcy or insolvency process.

“We do not want to enter Chapter 11 (bankruptcy), obviously the negotiations on which we have focused seek to avoid having to ask for help from the courts or help from regulators and simply to reach deals that… allow us to pay everyone who we owe,” chief executive Anko van der Werff told journalists.

Avianca is asking investors to exchange $550 million in bonds that come due in 2020, part of a plan to change its capital structure.

The airline will reorganize debt, cut investment in some parts of its business and look to better serve its clients, van der Werff said.

It will also increase its number of seats without increasing its fleet, he said.

“It doesn’t mean less space – the new seats are thinner,” van der Werff said.

The executive ruled out de-listing the company from the Colombian stock exchange – where its stock was trading at 1,100 pesos per share on Thursday, down from around 2,000 pesos a year ago.

“We are not considering removing our shares from the stock exchange,” van der Werff said. “Without doubt in the future we’d like to look for financing structures in the markets where we participate, including Colombia.”