Steps to understand the situation of Avianca Holdings

We will analyze the different events and situations that have led to the current situation.ógroup number Avianca Holdings and we will clarify the issue United Airlines.

Safe in these díhave itíthis one «United tomó Avianca control», that the end of the administration is comingón of «Don Efro» or that the aerosolínea podríto break, just on your anniversary 100, so i created this guíto understand the situationón current and cuáThere were some or the main factors that influenced the dítoday in the situationón del holding.

1. ACDAC strike

The 2018 didn't startó good for Avianca Holdings and its Colombian subsidiary, where a strike by pilots affiliated with the ACDAC generatedó the first contingency and operational problems such as canceled flights, rescheduled and a significant impactón to its institutional image.

The legal issues thereof correspond úonly to the Colombian courts to determine, but without a doubt this situationón generó an unforeseen affectationón económica where the aerosolíThey say noó that más de $140 millions of dólares stopped selling until November 2018, moment when I finishedó the unemployment.

2. The Boeing 787

It was the second blow in a row for Avianca, but it was not the única aerolíaffected area, but they added negative factors for the Colombian subsidiary, generating the effects of the Boeing shutdown to be passed on 787, más paro ACDAC, to the rest of the Holding.

The well-known problems of Rolls Royce Trent engines 1000 generated significant operational impacts, cancellations of hundreds of flights, passengers affected in all paíyou know where the airplane fliesínea, pérdidas económicas (although these values ​​willíThe sdodo cubertos by Rolls-Roce), but the main affectationón was his image again, losing credibility and passengers on their planes.

Esta situationówhat a startó in the first quarter of 2018 I extended myselfó until the úlast quarter of said toñO, where the image by external factors, was affected.

3. Joint Venture con United y Copa Airlines

Avianca, United and Copa signed a joint venture agreement in November 2018, to expand cooperationón between the three companies on their flights between Latin Americaérich and the United States. further, I agreeó el préstamo on the part of United towards Avianca for $456 millions of dólares payable until 30 November 2025.

4. Renegotiateón Airbus

Part of the improvement process Avianca Holdings was to renegotiate the incorporationón of new Airbus aircraft that was part of its order book during March, when it was signedó the agreement to defer the incorporationón of 35 planes and financial commitments were reduced by más of USD 2.6 thousands of millions.

5. Cancelaciónumber of destinations

Spaghettién the aerolínea has had to cancel/suspend several destinations from Bogotáá towards Bostón, Chicago, Montevideo, from Cartagena to New York, from Guatemala City to Chicago, New York, Orlando, from San Salvador to Bostón, Cali and from Cartagena to New York and San Salvador among others.

Another point tooéIt was not the cancellationón of the majoríthat of sun destinationséstics in Perú, where the úThe only route that remains operational is Lima – Cusco, concentrating on the airíline for international flights.

6. Change of corporate governance

In official statement, the airíI don't indicateó the next:

Through a shareholder agreement, United Airlines decidedó exercise contractual rights derived from the créI say that there isíhas agreed with BRW Aviation (Synergy Group) and nameó to Kingsland Holdings Limited as an independent third party with the voting rights corresponding to the shares of BRW Aviation in the companyñía, más not your property. Kingsland, largest minority shareholder of the companyñía has a trajectory of más 40 añyou in aviationón and have been part of the company's board of directorsñífrom the formationón del Holding.

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in addition, Kingsland Holdings Limited tomó I decided itón to renew the company's Board of Directorsñía, which will beá chaired by Roberto Kriete and made up of Richard Schifter, Sergio Michelsen, Fabio Villegas, Álvaro Jaramillo, Óladder Butíor Morales, James Leshaw, Juan Emilio Posada, Jairo Burgos, Rodrigo Salcedo and Roberto Zamora. This first-level board has the presence of three former presidents of Avianca and several global experts in the aero sector.áuseful.

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For his part, It is worth reiterating that United Airlines has not taken control of Avianca Holdings, ni de su operationón, nor of your service, nor business decisions. What has happened is a change in the corporate governance of the Holding, más not of its compositionón corporate.

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About the stratum allianceélogic and commercial with United and Copa

BRW-related measures announced today, They do not change the course of the existing alliance between United Airlines, Copa Airlines and Avianca Holdings. United's agreement with BRW is completely independent of said alliance and does not affect it.

6.2 United Airlines

United decidió exercise contractual rights derived from the crédate agreed with BRW Aviation. United Airlines no tomó control of Avianca Holdings, what has happened is a change in corporate governance, but not of its compositionón corporate.

6.3 Kingsland

Kingsland Holdings Limited is now the independent third party with the voting rights corresponding to BRW's shares in the company.ñía.

6.4 Board of Directors

The Board of Directors will now beá chaired by Roberto Kriete, and made up of 3 former presidents of Avianca: Fabio Villegas, ÁAlvaro Jaramillos and Juan Emilio Posada, además of global experts in the aero sectoráuseful.

7. Avianca Brazil and Avianca Argentina

It is known púI understand the complex situationón of these two airídenies, especially from Brazil, which is bound by the authority of this countryís to keep their flights suspended, but it must be indicated and clarified, that these have no relationón with Avianca Holdings and úonly one they share, is the use of brand.

¿There has been some impactón towards Avianca Holdings? Difíeasy to measure exactly, but without a doubt it caníWe want to say that there is an affectationón of indirect image due to lack of knowledge of the púwar towards non-relationshipón among the aerosolsíneas mentioned.

8. Flight effects

not existán Affects or cancellations of flights due to administrative changes at the airlineínea, otherwise, With these changes, a strengthening of the operation is expected.ón of the aerolíne at all levels.

9. Ecuador

Regarding our market, as well as at all levels of the Holding, there will not beáNo effects and all operations will be maintainedá as it is done at dífrom today.

10. Future

In future installments we will continue updating the changes or developments that arise in Avianca Holdings once the new corporate government begins to present its action plan.ón and take control of decisions in favor of improvement within the company.

For now, We cannot know major changes or modifications in the different subsidiaries, only time will tellá and hereí we will publish it.