Almost one year after it was announced, the merger between Avianca and Viva Air was awarded the approval of Aerocivil, Colombia’s civil aviation authority.
The approval was announced on Monday and conditions the deal on meeting several requirements, including maintaining Viva Air’s low cost profile for three years.
The airline, founded just over a decade ago, stopped flying on February 28 due to a serious financial situation. Part of the fleet was returned to lessors due to non-payment and the carrier’s future was in doubt as more airlines showed interest in acquiring it.
In the statement, Aerocivil reaffirmed that the merger between the two companies would result in damage to the passenger, due to market concentration.
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In the new analysis, however, the state agency determined that Avianca and Viva Air proceed with the integration plan, but that it provides for the service to passengers affected by the stoppage of the service and the return of several slots in busy airports, including the route between Bogotá and Buenos Aires, Argentina.
Two requirements, however, sound quite imprecise, such as “maintaining a tariff limit on routes where both have 100% of the market”, or “guaranteeing dynamism on routes that are the target of greater concentration”.
Despite the decision, the other competitors may appeal or contest the result. Airlines such as LATAM and JetSmart are keen to expand their presence in Colombia, one of the largest aviation markets in South America.
Together, Avianca and Viva Air control around 54% of passenger traffic in Colombia. El Dorado Airport, in Bogotá, currently the busiest on the continent, is the main reason for dispute due to the limited space of schedules.