Bankruptcy Contagion?

Brazilian airline Avianca Brasil filed for bankruptcy restructuring in December, which is not an unusual event. However, Avianca Brasil licenses its name from Avianca Holdings SA, a Colombian airline. Avianca Holdings is a larger company, although the companies are owned by brothers. In a recent SEC filing, Avianca Holdings stated the close association between the companies “could generally result in an overall decrease in customer confidence, any of which could lead to a significant loss of business.” Whether this loss of costumer confidence occurs to Avianca Holdings occurs is yet to be seen, but Avianca Holdings also may be forced to take on four airplanes that it subleased to Avianca Brasil.