As per Reuters Avianca has filed for Chapter 11 bankruptcy. The decision to file was likely prompted by a bond payment deadline and requests for aid from the Colombian government being unsuccessful. All is not lost for the airline or those loyalty customers with miles. Chapter 11 bankruptcy filings by airlines are an infrequent but common occurrence and are usually done to restructure debt. For example in 2005 Delta filed for chapter 11 bankruptcy and after 19 months of restructuring they exited that bankruptcy. You can read more about what happens to your miles and points during bankruptcy by clicking here.
LifeMiles has released this statement:
LifeMiles is a separate business from airline partner Avianca, remains well capitalized and is insulated from Avianca’s reorganization process
