Brazil’s civil aviation authority ANAC has suspended the operations of Avianca Brazil, dealing what could be the final blow to the airline which has operated under bankruptcy protection since December 2018.

ANAC says in a statement that it has decided “to suspend all operations of Avianca Brazil as a precautionary measure”.

It adds that all flights will remain halted until the carrier proves its ability to ensure safe operations, saying that the decision was made based on information provided by ANAC's operational flight safety department.

Avianca Brazil did not immediately comment.

This decision to ground Avianca Brazil throws into uncertainty the airline's plans to auction off assets in a court-supervised process to pay off debt, as a prolonged grounding might void the carrier's slots and route authorities. These rights are considered public assets awarded to airlines temporarily, conditioned on utilisation. Azul, LATAM Airlines and Gol have expressed interest in taking over the carrier's slots.

Avianca Brazil is legally obligated to refund or rebook passengers with existing bookings on other carriers, notes ANAC.

After returning dozens of aircraft to lessors and slashing its workforce by 900 employees, the airline has operated a skeletal network, serving Brazil’s busiest slot-controlled airports to maintain its landing and take-off slots, which are its most valuable assets.

These airports include Sao Paulo Congonhas, Sao Paulo Guarulhos, Salvador and Rio de Janeiro Santos Dumont.

Avianca Brazil’s flight crew recently grounded the airline with a two-day strike on 17 and 18 May, saying that the financial situation of the company placed excessive stress on them to continue operating safely.

The Sao Paulo-based carrier is a wholly-owned subsidiary of Synergy, whose BRW Aviation is the majority shareholder of Colombia's Avianca.

Source: Cirium Dashboard