While the name does not immediately announce the country as is typical of flagship carriers, Avianca S.A. (AVHOQ) is Colombia's leading and largest airline.
Known as the Sociedad Colombo Alemana de Transportes Aéreos (SCADTA) from 1919 until it was rebranded with the current name during World War II, Avianca currently has over 140 Airbus A320 (EADSF) and Boeing 787 Dreamliner (BA) planes in its fleet. It serves over 75 destinations across South and Central America and offers several longer flights to those looking to get to the country from North America and Europe. It falls behind only Chile-based LATAM Airlines (LTMAQ) as the largest airline in South America.
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Listed on the Colombian Stock Exchange since 2011, Avianca has been looking to go public in the United States ever since it filed for Chapter 11 bankruptcy amid a pandemic-related flying drop-off in May 2020 and emerging in 2023 after cutting costs, restructuring its business model to attract more middle-class passengers and shutting down its Peru branch. The restructuring convinced creditors and investors, who stepped in with $1.7 billion in additional funds.
Avianca is preparing for a U.S. IPO but a lot still needs to happen
In 2023, Avianca reported a net annual income of $131 million and a total of 9.3 million passengers transported — a 37.5% increase from the year before. Operating revenue in the first quarter of 2024 was $1.27 billion, up from $1.09 billion a year earlier.
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On July 1, Avianca announced that it is preparing to confidentially file for an initial public offering in the United States. The option was established in 2012 as part of the newly passed JOBS Act. It is often chosen by smaller companies that want to start filing with the Security and Exchanges Commission (SEC) while not immediately making all of their financial details public.
As first reported by Reuters, the airline's leadership has been working on steps to file, but the exact timing and execution will depend on existing market conditions. Competitor Aeromexico (GRPAQ) has followed a very similar trajectory as Avianca. After struggling to stay afloat during the height of the pandemic in 2020, Mexico's leading airline filed for bankruptcy protection in 2020 and delisted from the Mexican stock exchange before announcing that it was looking to raise $300 million for a U.S. IPO in May 2024.
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'The IPO makes sense to support the group's growth'
"During the Covid-19 pandemic, we underwent a transformational reorganization," Grupo Aeromexico wrote in its F-1 filing with the SEC. "Throughout this time, we successfully reset our operations, including various fundamental changes to our revenue generation and cost structure. We estimate that we had approximately $450 million in structural savings in 2023 compared to 2019."
With demand for travel both within South America itself and to the continent from other regions continuing to grow, Avianca has repeatedly said that it expects to be of interest to investors once it is finally listed on the New York Stock Exchange.
"Without a doubt the IPO makes sense to support the group's growth," Avianca's Head Of Investor Relations Maria Cristina Ricardo said in an April 2023 interview.
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