Avianca Defends Viva Air Deal as Latam Airlines Shows Interest

25.08.2023 - 14:11 / skift.com / Edward Russell / Latam Airlines / Airlines

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.

“The ‘proposals’ of the competitors that have expressed their alleged interest in Viva are, by all accounts, unfeasible, late and seem more of a distraction in the face of the request for integration of Avianca and Viva,” Bogotá-based Avianca said Wednesday. The airline acquired a controlling stake in Viva earlier this year but, as yet, its proposed merger with the discounter has been blocked by Colombian regulator, Aerocivil.

Aerocivil took a second look at the Avianca-Viva deal in January after the airlines offered to divest slots in Bogotá, among other conditions, in order to preserve competition. The regulator tweeted on February 10 that it anticipated a “prompt” decision on the proposed merger following Viva’s filing for the Colombian equivalent of bankruptcy.

Avianca’s comments Wednesday came after Latam said the day before that it had sent an expression of interest to acquire Viva to the airline’s management and shareholder Castlesouth Limited.

“We consider that this potential acquisition would be the best option to strengthen the conditions of the free market, as well as offer the necessary support to respond to the financial situation of Viva Air Colombia and its creditors, ultimately resulting in the strengthening of the Colombian airline industry,” Latam said.

Viva is Colombia’s third largest airline. In the first quarter, Viva is scheduled to fly nearly 17 percent of all seats in the country, according to Diio by Cirium schedule data. Avianca will fly 43 percent and Latam nearly 21 percent. JetSmart currently does not have a domestic operation in Colombia, but serves the country from Chile.

The potential bidding war for Viva comes amid a wave of potential airline consolidation in Latin America. Avianca is separately in the process of merging with Brazil’s Gol to form the new airline holding company, Abra. And Brazil’s Azul tried unsuccessfully to acquire Latam in 2021.