1) Describe Avianca strategy.

Avianca's strategy is based mainly on the new fleet plan to be implemented; as the
document mentions Avianca faces a situation of financial stress given the different
situations presented in the last year, therefore its decision is to put aside the
expansion plans to focus on those strategies that allow to operate in a much more
profitable way and thas why Avianca’s created the Regional Express Americas SAS
airline whose goal is to operate domestic flights to non-main cities in order to be
highly competitive in prices compared, of course, with the regular market, there is
also a second point, which is the reduction and reorganization of its original fleet,
where the ART aircraft will be exclusively used with Regional Express Americas SAS
airline, the Embraer fleet will be sold given its high inefficiency in terms of fuel and in
order to recover income, while the Airbus and Boeing fleets will be used for long-
distance flights, in this way it is done possible for Avianca to have efficiency in time,
standardize maintenance and additionally the costs of crew training.

2) Main risk facing Avianca

The risks Avianca faces are the limited option of accessing a debt redistribution and
therefore a possible refinancing given that the company has not complied with the
debt agreements that have been imposed on it and this creates restrictions when it
comes to request additional debt, it is necessary to clarify that these situations are
also highly linked to the strong appreciation of the USD that results in a reduction in
yields, on the other hand Avianca is not complying either with the debt agreement
with United Airlines which gives the latter the power to take control of Avianca
Holdings.

3) Compare Avianca vs its competitors (strength / weakness).

Strengths:
 It has a strong base of reliable supplier of raw material thus enabling the company
to overcome any supply chain bottlenecks.
 It has built a culture among distributor & dealers where the dealers not only
promote company’s products but also invest in training the sales team to explain
to the customer how he/she can extract the maximum benefits out of the products.
 The loyalty program called LifeMiles.

Weakness:
 The company has not being able to tackle the challenges present by the new
entrants in the segment and has lost part pf the market share
 There are gaps in the product range sold by the company. This lack of choice can
give a new competitor a foothold in the market.
 Financial planning is not done properly and efficiently.