Avianca CEO rebuilding the airline for a future with half the business travelers

Avianca’s new CEO Adrian Neuhauser in April took over a carrier that was a year into its Chapter 11 bankruptcy restructuring in the US, and which all but shut down early in the pandemic. It faced increasing competitive pressures from low-cost carriers in its home Colombian and Central American markets. Six months later, and travelers are returning. Avianca plans to fly 65 percent of its 2019 capacity this winter. A bankruptcy exit is in its sights before the end of the year, and Neuhauser has a vision for a very different travel market once the Covid-19 pandemic is in the past. Business travel, long the bread-and-butter of legacy carriers like Avianca, is gone in a significant way, Neuhauser said at the IATA Annual General Meeting in Boston on September 5. He disagreed with the optimistic outlooks of the likes of Lufthansa Group CEO Carsten Spohr and United Airlines CEO Scott Kirby, and shook his head before declining to comment on Emirates President Tim Clark’s prognosis of a full business recovery by the end of 2022. “The threshold for a meeting to be in person has gone up,” he said. “We don’t think it’s a [down] 20% issue or 30% issue, we think it’s a 50, 60% issue of business travel going away. That impacts the entire design of our network, it impacts the entire design of our cabin — our commercial strategy.” That severe — but possibly realistic — outlook shaped the reorganization plan that Avianca submitted to the court in August. Under that plan, the airline will add seats to its Airbus A320 family narrowbodies — A320s will go to 176 seats from 150 seats today — add more point-to-point routes from secondary bases like Medellin, Colombia, and San José, Costa Rica, and implement a long-planned commercial partnership on U.S.-Latin America routes with United.<br/>