Viva Air suspended all its flights on Tuesday after Aerocivil, Colombia’s civil aviation authority, issued a decision that will allow other companies such as LATAM, JetSmart and Aerolineas Argentinas to participate in the airline’s sale process.
The low-cost airline had filed a merger request with Avianca in August last year, after announcing the merger in April. But Aerocivil rejected the request claiming that the two companies would cause harmful market concentration, reducing competitiveness in air travel.
The merger process had to be restarted and the entry of new interested parties made the situation more complex and time consuming. For this reason, Viva Air blamed the Colombian government for the suspension of its activities.
“This unprecedented decision by the entity [to allow new entrants] will result in further delays in decision-making, so Viva is forced to announce, unfortunately, the suspension of its operations with immediate effect,” said the company statement.
Effects of the pandemic
Almost a year ago, when Avianca and Viva Air announced their intention to merge their operations, the situation was considered “robust” to the point that the two took several months to file a lawsuit with Aerocivil.
By August, the scenario had changed: Viva Air was going through a serious financial crisis caused, according to them, by the effects of the Covid-19 pandemic. That is why the Colombian government had to urgently approve the merger.
However, Aerocivil did not accept the arguments and, after analyzing the case, considered that the two airlines had many routes in common and that they would end up affecting competition and ticket prices.
Viva and Avianca proposed to maintain the low-cost brand and eliminate 105 slots at El Dorado Airport in Bogotá, in addition to other concessions.
Viva has said it will continue to seek to renegotiate its debts with creditors as part of a bankruptcy filing in Colombia seeking a way to resume flights.
The airline operated a fleet of Airbus A320 jets, seven of which were withdrawn from service at the request of the leasing companies.
“Unfortunately, we have reached this point due to repeated delays by the Civil Aeronautics and their inability to recognize what is best for Viva is also what is best for all Colombians,” the airline said.