Avianca reported Q3 results today which included the first 11 days of the strike. The numbers were pretty healthy (source Valores/Bancolombia)


3Q17: Operating margin reached 9.2%, 60bp above our expectations. Yields present their second consecutive year-on-year increase reaching USD8.9. Leverage ratio net debt / EBITDAR closed at 5.6x.

Avianca Holdings reported results that we classified as extraordinary where the company, thanks to the good results in July, August and the first 20 days of September, managed to compensate for the effect of the 11-day strike in Q3. Thanks to a slight increase in year-on-year yields, along with an increase in passengers transported and high occupancy factors, Avianca reported a 158bp revenue growth higher than that of operating expenses leading operating income to reach the best margin for the year. 3T since 2013.

This week it was also known that during October the company transported 1.9mn passengers, decreasing 25%. The above is due to the pilots' strike that took place during the whole month, which affected the domestic market to a greater extent, which reduced the available seats by 37%. On the other hand, the international market decreased the available seats by 10.5%. The aforementioned was slightly offset by an overall increase in the load factor by 40 bps, however they also account for the difficult situation the company went through with the pilot strike, which we expect to have material repercussions on the results of the 4T.

Apparently the illegality of the strike was upheld by a higher court today... things may get nasty.

By the way, Medellinexpat, very nice to see another person from around JMC Airport here. I thought I was the only local. Cheers!

Global Pilots Condemn Avianca Airlines Management’s Union Busting Actions


March 02, 2018 05:00 PM Eastern Standard Time


MONTREAL--(BUSINESS WIRE)--The International Federation of Air Line Pilots’ Associations (IFALPA) condemns the union busting conduct of Avianca Airlines management who terminated the President of the Colombian Pilots’ Union (Acdac), for carrying out his legitimate union activities. We understand that Avianca management is planning similar discipline for many more pilots in retaliation for supporting their union.

Captain Ron Abel, IFALPA President, stated that this outrageous anti-union conduct cannot be tolerated. Avianca pilots and workers are being denied their basic human right to collectively bargain salary and working conditions and not to be subject to discrimination based on union membership.

This behavior, in our view, also violates the Labor Action Plan in the current U.S.-Colombia Trade Promotion Agreement and the International Labor Organization Fundamental Conventions 87 & 98 that Colombia has ratified, which protect the rights of workers to organize, bargain collectively, and engage in industrial action.

IFALPA is also concerned that the “non-punitive” or “Positive Safety Culture” recommendation from The International Civil Aviation Organization (ICAO), a United Nations Specialized Agency, has been undermined by the actions of Avianca management. Flight Safety is a pilot’s number one priority. Distractions, concerns about employment status, and difficult relationships with the employer, can adversely impact a pilot’s focus on his primary function, the safe operation of the aircraft.

IFALPA urges Avianca management to change its course and work to regain the trust of its pilots in order to reestablish a Positive Safety Culture environment.

Captain Abel pledges the full support of IFALPA to the Avianca pilots represented by Acdac to reinstate them to their positions with no retaliation by Avianca management. IFALPA will be communicating with the appropriate Colombian government officials to seek their intervention and bring this unfortunate matter to a mutually satisfactory conclusion.


104 pilots terminated as of yesterday.

During the strike Avianca were leasing several aircraft from sources like Wamos and Envelop. When the strike ended those arrangements were continued and continue despite Avianca having several aircraft (including two 787s) grounded for lack of pilots. During the strike there were also significant reductions in schedule some of which even now continue. So management clearly have decided to manage around pilot ‘shortages’ even if as now self inflicted.

Despite the strike Avianca financials for both 4q17 and full year 2017 weren’t unimpressive. Cutting schedules back and leasing in aircraft clearly worked from a management point of view. It’s an interesting thought (although only speculation) as to whether they might have been helped out on the leasing side by Rolls providing compensation for the 787 engine groundings?

Presumably now Avianca have a ruling that the pilot strike was illegal as Avianca’s flights are a necessary resource for Colombia they now think that they are protected against any future actions. Avianca remains the dominant airline in the country and even despite the strike there was little evidence of any of the other local carriers pushing hard to increase market share.

There was a local newspaper article about Avianca training up replacements. However in a country and region where both weather and terrain can be challenging experience in the cockpit is really needed.

Some newspaper talk here in Colombia that the dismissals may result in further strike action.