The ultra-low-cost airline JetSmart, from Chile, has decided to enter the dispute for the Colombian carrier Viva Air, which is currently in negotiations to be acquired by Avianca.
A subsidiary of the Indigo Partners group, JetSmart has been one of the most aggressive airlines in Latin America and the acquisition of Viva Air could place it in a strategic position in the Colombian market, one of the fastest growing in the region.
Avianca and Viva Air announced the merger proposal almost a year ago, however, the process moved slowly until August 2022, when the two companies urgently asked the Colombian civil aviation authority, Aerocivil, to approve the agreement.
The reason was that Viva Air was going through a serious financial crisis and that it could stop operating before Avianca could help it.
Aerocivil, however, was not moved by the appeal and vetoed the merger in November, claiming that there would be an excessive concentration of the market between them, making life difficult for passengers.
In January, Aerocivil annulled the merger process pointing out “substantial irregularity within the administrative process”, which forced the two companies to restart the request.
“Close an acquisition quickly”
“We believe that a transaction between JetSMART and Viva Air will allow the ultra-low-cost model to be Maintained in Colombia. We have a long-term vision to expand in South America and we are in a position to continue investing in our growth,” said Estuardo Ortíz, CEO of JetSmart.
JetSmart also says that it can take over Viva Air quickly, thanks to the resources, capacity and experience and the agreement would be the best for the market since the two companies do not operate common routes and both have fleets of Airbus A320neo aircraft.