As I found out later, the card had expired and Visa had mailed another to me. At the time of booking I hadn't received the new one and activated it. This was the only transaction that was affected. As stated, I called Avianca NYC office and they confirmed that the payment transaction took place OK. So I believed them.
Avianca may be within their rights to cancel the transaction based on payment cancellation by a third party. Nonetheless as a customer with a reservation number, they owed to me notification that they were cancelling the reservation. If they had contacted me to inform me they were cancelling the reservation, I could have corrected the payment situation or chosen not to fly to NYC.
But instead, they chose to cancel the reservation without informing me. That's just bad customer service. Even if they get away with not reimbursing me for my damages, they lose future business.
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