Colombian carrier, Avianca, has filed for bankruptcy at a United States court citing  "unforeseeable impact of the Covid-19 pandemic.

The world's second-oldest airline said in a statement that the decision to file for bankruptcy — voluntary petitions under Chapter 11 — was made with the intention to "protect and preserve operations" during the continuing coronavirus crisis.

"On May 10, 2020, Avianca Holdings S.A. and certain of its subsidiaries and affiliates filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York to preserve and reorganize Avianca’s businesses as the Company continues to navigate the impact of the COVID-19 pandemic," it said in a statement.

Avianca noted that the filing was necessary due to the unforeseeable impact of the COVID-19 pandemic, which resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by US$314 billion.

“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,” said Anko van der Werff, Avianca CEO.

 Avianca's scheduled passenger operations have been grounded since mid-March, reducing its consolidated revenue by over 80% and placing significant pressure on its cash reserves.

According to Avianca, it directly employs 21,000 people throughout Latin America and nearly 90% of countries where the airline operates is currently under total or partial lockdowns.

Avianca said the petition is also to reorganise Avianca's businesses as it clarified that Avianca's FFP LifeMiles is administered by a separate company and is not part of the Chapter 11 filing.

 Avianca underwent a similar Chapter 11 process in 2003.