Colombia’s flag-carrier airline Avianca will invest $473 million to grow its fleet by 16 aircraft as it looks to increase the number of routes on offer, Chief Executive Adrian Neuhauser said on Thursday.
25.08.2023 - 13:43 / skift.com / Edward Russell
Whether Viva Air will ever fly again is increasingly an open question. Avianca, which wants to merge with the bankrupt budget carrier, said late Wednesday that the conditions laid out by Colombian civil aviation regulators for the deal “make Viva’s recovery impossible.”
“Several conditions that, depending on the case, (i) make Viva’s operation unviable in the medium term, sentencing it to operational and financial failure (e.g. lack of slots), (ii) are impossible to comply with, given the current reality of that company, which has already lost more than half of its aircraft (e.g. the requirement to maintain capacity on exclusive routes despite the lack of aircraft and slots), or (iii) grant unjustified benefits to third parties (e.g. requiring Avianca to pay for Satena’s IOSA certification).”
The Bogotá-based Star Alliance carrier added that the conditions were “unfeasible” for the deal to move forward.
Aerocivil’s conditions include divesting slots at Bogotá’s congested El Dorado airport, reviving the Viva Air brand, honoring the tickets of travelers affected by Viva’s shutdown, and maintaining a codeshare with Colombian regional airline Satena.
Avianca first acquired Viva in mid-2022, and then announced plans to merge with the Colombian discounter — but maintain it as a separate brand — last August. What’s followed is a telenovela of twists and turns including allegations of antitrust violations by Avianca, 11th hour interference from competitors, and mixed messages from Aerocivil.
What happens next is anyone’s guess. Viva closed its doors two months ago at the end of February and, as Avianca, points out, aircraft leasing companies have already begun taking back aircraft. Latam Airlines has begun offering former Viva staff jobs at its own growing Colombian subsidiary. And competitors, including Chilean discounter JetSmart and Copa Airlines-owned Wingo, have outlined plans to expand in the domestic Colombian market.
Aerocivil has said that Avianca, and other “interested parties” — including JetSmart, Latam, and Wingo — have 13 days to respond to its tentative approval. Only then, under the current timeline, could it finalize its approval and the deal close.
Colombia’s flag-carrier airline Avianca will invest $473 million to grow its fleet by 16 aircraft as it looks to increase the number of routes on offer, Chief Executive Adrian Neuhauser said on Thursday.
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Good morning from Skift. It’s Friday, December 2. Here’s what you need to know about the business of travel today.
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Colombia’s civil aviation authority, Aerocivil, is taking a new look at the proposed merger of Avianca and Viva Air following what it described as a “substantial irregularity” in its initial review. That process, which concluded in November, rejected the airlines’ combination due to competition concerns.
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It may be a full on bidding war for bankrupt Colombian budget airline Viva Air. Latam Airlines has expressed interest in acquiring the carrier, joining Chile’s JetSmart, and put Avianca in defense mode over its proposed merger with Viva.