Economy

The war for Brazilian skies

Avianca Brazil, the country’s fourth-largest airline, is grounded. The National Civil Aviation Agency (Anac), which regulates Brazil’s air travel market, suspended the company’s activities on May 24, fearing that its financial struggles would compromise passenger security. Meanwhile, customer service hotlines were shut down, and those with Avianca tickets don’t know how to get a refund, or transfer to other carriers.

The downfall of Avianca pushed plane tickets to rise by 20 percent in Brazil this year. And it is the result of a war staged between the three market leaders—Gol, Latam, Azul—and creditors who have BRL 2.8 billion to receive. July 10 is set to see the auction of Avianca assets. Now, interested players are hoping that no further twists will delay the process.

Understanding how Avianca got here

In December 2018, Avianca filed for court-supervised reorganization after posting losses of BRL 1.3 billion that year. While the administration plan was being drafted,...

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