Avianca on the verge of bankruptcy

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Read today on a couple of FF blogger sites that Avianca is on the verge of bankruptcy - I guess not really a surprise but those with balances in LifeMiles should beware; me being one of them. It does not even help to book tickets now for next year (say) because those tickets will not be honoured if Avianca fails.

But as I said to Mr LL (when I read this) - there's not that much difference between having miles and not being able to book flights (due to LM glitches and limitations and/or lack of *A premium space ex-OZ) and losing those points if Avianca goes under.

Hopefully Avianca will be rescued or bailed out and LM will live on (I do realise that LM is a separate entity).
 

MEL_Traveller

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Apparently because LM is a separate entity, there's a chance tickets issued on partner airlines will be honoured, if LM can pay for them. Depends on LM's financial liquidity I guess.

Having said that, I have around USD1000 worth of points sitting with LM, so the exposure isn't too bad. Given the years (and years) of excellent redemptions I'm not too upset.

Where to go next for cheap miles is the issue. The major US carriers are mostly out of the game now (cheapest miles are around USD1.72c). Alaska is good. Copa for Star is cheap, but can never get any availability.

I don't think Avianca will go under. It seems UA has written off their loan to them, worth around USD680m. That's got to help :)
 

burmans

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Given it's the national carrier and second largest in South America would suggest there are more who'd like to see it saved than (say) Virgin Australia so think this is another story with a while to go!
 

repete

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I'm hoping you're right burmans. After the hours spent planning my folks world trip last year, it's all fallen in a spectacular heap. I was pleased with how efficiently their points were returned and taxes promised in refund the other day when they cancelled with Avianca. 420K points will be a serious burn of their $$ if it all goes belly up :(
 

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I’m holding quite a few LM points like most here. Making International award redemptions for anything before the end of 2020 might be wishful thinking if the CMO and government keep up their rhetoric and close Oz borders for “months“. In the meantime, and assuming domestic travel (and even NZ) is relaxed in the coming weeks, one way to use your Lifemiles is via their hotel/Stay feature. They partner with plenty of hotels Australia wide.

Obviously the value isn’t as good, it it’s not terrible and at least you might be able to redeem some value before any collapse or devaluation occurs in the future.
 

tomcut2000

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I’m holding quite a few LM points like most here. Making International award redemptions for anything before the end of 2020 might be wishful thinking if the CMO and government keep up their rhetoric and close Oz borders for “months“. In the meantime, and assuming domestic travel (and even NZ) is relaxed in the coming weeks, one way to use your Lifemiles is via their hotel/Stay feature. They partner with plenty of hotels Australia wide.

Obviously the value isn’t as good, it it’s not terrible and at least you might be able to redeem some value before any collapse or devaluation occurs in the future.

If I was you - start thinking on using the miles as soon as possible
 

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If I was you - start thinking on using the miles as soon as possible
Are you holding any special insights that the public isn’t aware of yet, Tomcut? Or just offering sage advice to de-risk ala Virgin? FWIW, I cashed out my VFF points to SQ weeks ago when I saw the writing on the wall. But I’m not anywhere near as well versed of the Lifemiles situation. All I have to go on are various travel bloggers whom all claim it could go either way. From what I understand, the viability of Avianca and Lifemiles is a matter of weeks if the government doesn’t bail them out.

Using the miles ASAP as you say limits us to domestic hotel bookings only in reality.
 

MEL_Traveller

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Are you holding any special insights that the public isn’t aware of yet, Tomcut? Or just offering sage advice to de-risk ala Virgin? FWIW, I cashed out my VFF points to SQ weeks ago when I saw the writing on the wall. But I’m not anywhere near as well versed of the Lifemiles situation. All I have to go on are various travel bloggers whom all claim it could go either way. From what I understand, the viability of Avianca and Lifemiles is a matter of weeks if the government doesn’t bail them out.

Using the miles ASAP as you say limits us to domestic hotel bookings only in reality.

The viability of Avianca may be weeks without assistance, but LM is a separate entity. Can that work? There have been examples where it has (Aeroplan, sort of), and others where it hasn't (JetAirways' program spin-off).
 
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Just read that Avianca has now filed for Chapter 11 in NY - watch this space I guess - who knows what the 'restructured' airline will look like and how LifeMiles will fit into the picture. Mr LL and I are both sitting on a heap of points . . . SIGH It's hard to believe it won't re-emerge somehow - maybe as part of United (wishful thinking allowed).
 

MEL_Traveller

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I agree with you l-l. I think it will fly again. My points expose is limited - around 75K. Others I know are close to the 300K range.
 
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coolkid101

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We bought more than 2 million miles over a few years many years ago when aud was 1:1 with usd and availability was abundant, even with access to many more sq routes.. Have had difficulty using them over the many years we've had them.. Just looked at our accounts and have 1.2mil miles between the Mrs and I.. Lesson learnt in speculative buying.
 

Major

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I used LM to book Motels for a road trip BNE to SA in Sept.
Now I don't know whether LM will still be around let alone whether we will be able to travel interstate in Sept.
 

burmans

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Just read that Avianca has now filed for Chapter 11 in NY - watch this space I guess - who knows what the 'restructured' airline will look like and how LifeMiles will fit into the picture. Mr LL and I are both sitting on a heap of points . . . SIGH It's hard to believe it won't re-emerge somehow - maybe as part of United (wishful thinking allowed).
Plenty of airlines come out of Chapter 11 given the whole point of it is a way to avoid bankruptcy. In Avianca's case South America is hardly a crowded market so if they can get rid of debt there is definitely money to be made.
 

coolkid101

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Some interesting views by Gary over at

 
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Thoughts with all those impacted...

Not sure if you mean Avianca staff or us poor folks with large LM balances which may be worthless. Even though I'm in the later category - I guess I already felt that my LM miles were close to worthless (even before CV-19) due to a combination of poor *A award availability, LM bugs/glitches/restrictions and high change/cancel fees (and low AUD vs USD) so I figure I'm not much worse off. However, staff of all airlines have been really hard hit by CV-19 and it will be a long time before they have their jobs back; Avianca staff in particular may never return to work.

Most people on this forum probably obtained their LMs via purchase with bonus offers - we all knew we were taking a calculated risk - the party was over a couple of years ago, IMO.
 

MEL_Traveller

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No doubt all LMers will receive this email eventually - but I got this a short time ago (bolding per their email headings, not added by me):

Dear customer,​
Because our relationship with you is important, I wanted to reach out directly to let you know about the actions Avianca is taking to make sure we have the financial strength we need to continue serving you well into the future.

Today, Avianca voluntarily filed for reorganization proceedings under Chapter 11 of the United States Bankruptcy Code. We did so to protect our business as we continue to navigate the effects of the COVID-19 pandemic as well as comprehensively address our debt and other commitments. We considered many other possibilities before determining that a reorganization made possible by the Chapter 11 process is the best path forward to protect the essential air travel services that we provide across Colombia and important locations throughout South America, Central America, North America and Europe.

Avianca has flown the skies for more than 100 years, and we are committed to our purpose to connect people, families and businesses. We look forward to returning to the skies and helping you and your organization safely travel across Latin America and the world.​
Here is what you need to know:
Avianca will continue to operate through this process, and Avianca will return to the skies and continue to fly once COVID-19 travel restrictions are gradually lifted.

Customers’ safety and well-being remain a top priority for us today and moving forward. Customers can be confident that they can continue to depend on Avianca for safe, reliable air travel and high-quality service. To that end, Avianca has implemented a number of measures to ensure the safety and well-being of our employees and customers. Additional information on the steps Avianca has taken can be found here.

Customers can expect to continue to arrange travel and fly with Avianca in the same way they always have. We plan to honor all customer programs throughout this process.
• Customers will be able to use tickets, vouchers, travel coupons, gift cards and any additional travel services purchased before we initiated this process.

• Additional frequent flyer benefits remain active, including access to VIP Lounges, priority check-in, upgrades and other benefits.

• Given the impact COVID-19 has had on travel plans, we will continue with our Flexibility Policy. Subject to government policies, we expect to continue to allow changes free of penalty and fare difference charges for previously booked tickets and/or newly purchased as long as the original and changed flights are until October 31, 2020. All customers who have booked travel or will purchase flights during this period can be confident they can rely on Avianca for their travels.

• The LifeMiles™ program is administered by a separate company and is NOT part of Avianca’s Chapter 11 filing.

Avianca customers will continue to accrue miles when they fly with Avianca, and can continue to redeem miles earned through LifeMiles™ to purchase tickets with Avianca during this process. Tickets purchased through redemption of LifeMiles™ miles will continue to be exempt from penalty fees until October 2020.​
We are proud of our 100-year legacy, and look forward to continuing to serve you. Thank you for your continued loyalty.​
 

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Most people on this forum probably obtained their LMs via purchase with bonus offers - we all knew we were taking a calculated risk - the party was over a couple of years ago, IMO.
Very true. The mere fact the underlying airline was based in Colombia sent 99.999% of any possibly interested parties packing. Nevertheless, since taking my first leap of faith into Lifemiles many years ago I have purchased and redeemed in excess of 3 Million points in long haul First/Business. The value I have gained from these redemptions would be well over $300K AUD (face value) and probably around $150K value to me based on what I would have paid etc etc. My remaining 200K miles is a reasonable sum which I hope I don’t lose, but big picture I’ve done extremely well with LM over the years.

Unlike VFF, I’m actually optimistic about the outlook for Lifemiles. Famous last words eh.
 
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