German Efromovich is a household name in the Latin American airline industry. Not so long ago, the Bolivian-born entrepreneur owned the giant South American airline, Avianca. Let’s take a closer look at Aeroitalia’s new non-executive chairman.
Efromovich, the airline businessman
Germán Efromovich made his money in the booming oil business. Before becoming an aviation magnate, he and his brother José made their fortunes in the oil, construction and even health sectors. They ran a company called Synergy Group.
In Brazil, he created an air taxi company, OceanAir, which would later be known as Avianca Brasil (although it was not directly connected to Avianca).
Efromovich entered the commercial aviation business in 2004. The previous year, on March 21, 2003, Avianca Airlines filed for Chapter 11 relief in the United States Bankruptcy Court. The airline took on its share of hardship following the terrorist attacks in the United States in 2001.
In March 2004, Synergy Group publicly announced its interest in making a substantial investment in Avianca. Synergy Group beat a bid from Copa Airlines and Continental Airlines and got their hands on the company.
Between 2012 and 2015, Efromovich attempted to buy TAP Airlines, the Portuguese carrier which was in financial difficulty. He lost the bid to another airline mogul, David Neeleman, founder of Azul and Breeze Airways, among others.
After its first chapter 11, Avianca has become stronger. The airline became the second operator in Latin America behind LATAM and survived, while other incumbent carriers disappeared, such as Varig and Mexicana de Aviación.
Avianca under Efromovich grew up in Colombia, Central America, Ecuador, Peru and Brazil. Under his leadership, Avianca and TACA merged under one brand. Nevertheless, the first signs of unrest appeared in Brazil.
Germán Efromovich saved Avianca in 2004. Photo: Getty Images.
In December 2018, Avianca Brasil filed for bankruptcy. The airline was heavily in debt and ceased operations the following year. At the same time, Synergy Aerospace failed to repay a loan worth US$456 million provided by United Airlines to BRW Aviation, a subsidiary of Synergy Group. The loan had Synergy’s shares in Avianca as collateral.
Following the default, United Airlines began pursuing certain remedies and named Kingsland Holdings as the majority owner of Avianca’s voting shares. Efromovich was ousted from the company he helped save.
Avianca then carried out two consecutive financial reorganizations. The first was a private reorganization in 2019, and the second was the airline’s second Chapter 11 as the COVID-19 pandemic wreaked havoc on the airline industry.
In 2020, Efromovich was reportedly interested in acquiring failing Alitalia. Ultimately he was unable to do so but launched his own Italian carrier instead.
Today we discovered a new airline startup called Aeroitalia. The carrier plans to have its base at Luigi Ridolfi Airport in Forlì (FRL) and will operate a fleet of Boeing 737-800s.
Aeroitalia is an airline seeking to compete directly with ITA Airways following the market exit of Alitalia and Air Italy.
Aeroitalia’s board of directors consists of German Efromovich as non-executive chairman, Marc Bourgade, a French banker as chairman, and Gaetano Intrieri as CEO.
German Efromovich said,
“Today is an important day not only for the birth of Aeroitalia but also for all commercial aviation in Italy and around the world. An airline has been created that will offer everyone the opportunity to fly, in strict compliance standards of safety, comfort and service excellence.
What do you expect from Efromovich’s latest airline, Aeroitalia? Let us know in the comments below.
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