It was on April 29, 2022 that Avianca and Viva Air announced their intention to merge their businesses.
At the time, the traditional Colombian airline and the fast-growing low-cost airline entered into an agreement that would bring potential benefits to its customers “by using a more efficient cost structure to offer lower fares,” said Roberto Kriete, chairman of the Board of Avianca Administration.
A year later, Avianca’s acquisition of Viva Air was finally approved by Aerocivil, Colombia’s civil aviation agency. But the scenario is now different, that of the “robust group of airlines” mentioned by the same Kriete 12 months ago.
Viva Air ceased operations on Feb. 27 amid debt and its leased planes being taken back to lessors.
The financial situation has become so serious and the conditions imposed by Aerocivil are so discouraging (return of slots, obligation to charge low fares) that Avianca already considers the deal “unfeasible”.
“The new resolution does not allow for a realistic transaction for the integration and redemption of Viva,” said a statement from Avianca on Wednesday.
The group also regrets the possibility that other companies supposedly interested in Viva (JetSmart, Wingo and LATAM) may file appeals that could delay the process.
Who to blame?
Avianca and Viva Air complained about Aerocivil’s delay in analyzing the merger, which would have contributed to the low cost’s financial situation deteriorating.
However, the two companies only entered the integration process in August, about three months after the announcement of the agreement, when it was revealed that Viva was already experiencing difficulties.
Aerocivil pointed out several irregularities in the first approval attempt and instructed airlines to re-enter the process in 2023.
Given the conditions, it is unlikely that Viva Air will fly again, the same destination as Ultra Air, another low-cost airline launched in Colombia and wich ended its operations recently.
Meanwhile, JetSmart, sponsored by the Indigo Partners group, started the operational certification process in the country. In possession of the AOC, the new subsidiary of the Chilean carrier intends to start domestic flights in Colombia in the near future.
The absence of Viva Air and Ultra Air already indicates a large gap for JetSmart to fill.