Nine months later Avianca closes the possibility of integration with Viva – Sectors – Economy

Avianca’s announcement to withdraw from an integration with Viva Air puts an end to a story that has affected the Colombian air sector and that contrasts with the announcement made a year ago by the companies of the creation with Gol of the Abra Group, which would be one of the leaders in air transport in Latin America.

The idea of ​​the conglomerate the size of Latam, with control of Avianca and GOL and economic rights of Viva, was that customers would benefit.

Avianca says that it was nine months after starting the integration application process and after studying Aerocivil resolution 873 of 2023 in detail, a process that had delays and that also put the sector at risk.

That is why Viva announced the end of its operations. “With deep pain that, without the possibility of financial support, the company no longer has the capacity to continue operating in the market,” he said.

He pointed out that he tried to avoid this outcome by presenting the integration review in a timely manner to save himself, but “after receiving the conditions and evaluating the impact, it was found that it was not possible to comply with them.”

Avianca stated that it repeatedly sought to save Viva’s existence and thus protect consumers, employment and regional connectivity. But the conditions to the transactions defined by Aerocivil not only would not allow Viva to be a financially and operationally viable airline.

For Viva, the determinations of the Aerocivil allowed the outcome to be reached “that destroys a company and all the value around it due to lack of business understanding”.

A sum of factors

The pandemic, the closure of the skies, the cost of gasoline and the operations carried out on airlines to a crisis. Viva Air went to different entities of the National Government asking for help due to the critical financial situation it was going through

In the middle of the whole process, on February 27, 2023, the Viva Air crisis was more than evident, the company ceased its operations immediately, left its passengers on the ground, along with the planes and their workers in the middlesomething that he had already announced since November 2022, when he asked for the integration process to take place.

The desperate scenes of travelers at the country’s airports, in Peru and Argentina added to the anxiety of its more than 1,250 employees due to the company’s decision to fire 260 pilots and 460 flight attendants, therefore, through the Colombian Association of Civil Aviators (Acdac), they asked the Government to intervene so that they would take the necessary measures.

Viva even tried to save Jetsmart, a new player in the Chilean low-cost sector that also opted for Ultra, but neither of the two operations prospered.

The CEO and president of the Chilean airline, Estuardo Ortiz, noted that the Colombian market must maintain the conditions of free competition and quality of service.

“We continue in the certification as an air operator in Colombia, to offer an efficient and affordable service,” he said.

On March 23, the president (e) of Viva, Francisco Lalinde, stated that In these circumstances, it was impossible for it to comply with the conditions that Aerocivil placed to authorize its integration with Avianca.whose term is greater than 60 days, in case of being appealed, as actually happened at the beginning of April.

Avianca has extended until May 31 the protection for users affected by the cessation of Viva operations, which according to figures exceed 500,000.

“Despite Avianca’s willingness to return more than 75 percent of Viva’s slots in El Dorado -and more than 72 percent of Viva’s slots in “premium” slots -, the authority demanded the return of such a number of slots that it would not allow Viva to base a single aircraft in the main country’s airport efficiently. This would make Viva economically unfeasible,” Avianca said.

Adrián Neuhauser, president and CEO of Avianca, added that since the start of the integration request they have been respectful of the process, that now their responsibility is to protect Avianca.

According to Neuhauser, the company made a concrete proposal to save Viva, has mobilized more than 160,000 people for free (compared to the less than 10,000 that all the other airlines in the sector have rescued as a whole) and has served critical destinations such as San Andrés, Medellín, Riohacha or Buenos Aires with additional flights, among many others.

“In this, it maintains its conviction of being a key player for connectivity and avoiding a deeper crisis, and will continue to protect affected users of Viva and Ultra until May 31,” he highlighted.

For the manager, the integration request with Viva sought to fight for its survival in the market, as well as to maintain the competitiveness that it has built during 10 years of operation, but “unfortunately the conditions of this resolution, which is already the firm decision , the rescue of Viva impossible by making it not only unfeasible as an airline, but, to realize the integration under the conditions imposed by Aerocivil, would put the stability of Avianca and the connectivity of Colombia at risk”.

The director of Civil Aeronautics, Sergio París, assured that “the decision that weighs and compensates the decisions of those who were interested in this situation. The passengers are not abandoned. The competition is allowing spaces for airlines other than the integrated entity to operate and have access to the El Dorado airport,” he said.

The other possibility is that due to the difficult economic situation they experienced, a few months ago the Superintendency of Transportation managed to get the Superintendency of Companies to admit the airlines Viva Air and Ultra Air for business reorganization.

More news

The paper on labor reform is ready to file

Viva Air says goodbye: “The company no longer has the capacity to operate”