Bankrupt airline Avianca paid millions in executive bonuses during pandemic

Airline Avianca Holdings came under broad criticism in Colombia for paying its top two executives $6m in bonuses in May, at a time when the carrier had furloughed most of its employees without pay and was preparing a bankruptcy filing. According to bankruptcy court documents submitted by Avianca itself, the airline paid CE Anco van der Werff $3.7m and paid CFO Adrian Neuhauser $2.8m on May 6. Five days later, the airline filed for Chapter 11 bankruptcy protection in the US. "Avianca is facing the most challenging crisis in our 100-year history," van der Werff said at the time. On Wednesday, Avianca defended the bonuses, saying they were necessary "as an incentive for the company's management team to continue to provide services to Avianca." In court filings, it also said its key executives would have sought employment elsewhere without the extra pay. During the pandemic, Avianca took more radical payroll cutting measures than its rivals, asking the majority of its 20,000 employees to take unpaid leaves. Avianca and most Latin American airlines have not received government bailouts like their peers. Colombia's government has, however, proposed a loan of more than $300m to help get Avianca out of bankruptcy. The May bonuses were at least the second round of bonuses paid that year, documents show, although Avianca said some of that money was in reality tied to 2019 performance.<br/>