Viva Air and Avianca urge merger to be approved quickly amid financial difficulty

Low-cost carrier revealed a fragile economic situation this week, motivating Avianca to request that the merger process be accelerated by Colombian authorities.

Surprisingly, Avianca and Viva Air asked the Aeronáutica Civil Colombiana (Aerocivil) that the merger between them be rushed because of the low-cost partner’s financial problems.

The two Colombian airlines had announced the integration of their operations in April, but that they would retain their corporate identities.

According to Avianca, Viva Air’s financial situation has proved to be quite serious in recent months, which motivated them to ask for the acceleration of the integration process.

“The request for integration with Viva seeks to fight for its survival in the market, as well as maintaining the competitiveness that it has built during 10 years of operation”, said Adrian Neuhauser, president and CEO of Avianca.

Avianca’s A320 (Venkat Mangudi)

No response from Avianca and Viva Air

In a statement released on Tuesday, Aerocivil downplayed the pressure made by the two airlines, stating that it “will carefully review the information, arguments and exceptions presented by the participating companies and will determine, following the highest standards of analysis developed by national and international authorities competition, the effects of the transaction with the aim of adopting a resolution on it in the light of the regulations and principles of free economic competition”.

Colombia’s civil aviation agency also revealed that Avianca and Viva Air had been required since April to present their integration plans and the date on which they intended to merge their operations, but the two companies only said in May that they “needed a reasonable time to submit” the information to Aerocivil.

Only on August 8 did the authority formally receive the authorization request from the companies, Aerocivil said. It is the day after the beginning of the mandate of President Gustavo Petro, the first leftist politician to assume the government of Colombia.

Ties with Ryanair

With a fleet of 23 Airbus A320 jets, half of which are the more efficient Neo version, Viva Air flies to domestic and international destinations, especially in the Caribbean, but also to South American cities such as Buenos Aires and São Paulo. The company has a branch in Peru.

In operation since 2012, Viva Air has Declan Ryan, son of Ryanair’s founder, as one of its partners. In the arrangement announced in April, the Irish executive is expected to take a seat on the Board of Directors of the Abra group, which will also include Gol Linhas Aéreas.

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