Avianca Brasil filed for bankruptcy protection, warning services could be severely impacted as lessors seek to repossess its leased aircraft.
Leasing companies are trying to reclaim nearly a third of its aircraft fleet, the airline said in the bankruptcy filing.
Avianca is asking a Brazil court to suspend the repossession to allow it to continue operating as normal.
It cited high fuel costs and volatile currency markets for its cash flow woes.
It is facing legal action from three lessors hoping to take back 14 aircraft, the filing said.
The airline said last week it was hoping to renegotiate its contracts with the leasing companies.
The airline said Brazil’s aviation regulator, ANAC could intervene and suspend its ticket sales, which ‘would dramatically affect cash flow.’
Avianca Brasil is the fourth largest carrier in Brazil.
It is owned by Synergy Group which is also majority shareholder of Colombia’s Avianca Holdings.
