Both Avianca and Viva Air have mentioned on multiple occasions that the only option that exists to save the budget airlines it is through business integration that requests Aerocivil.
However, and to the surprise of these two airlines, in the last few hours it was learned that JetSmart Airlines is willing to enter into negotiations to acquires 100 percent of the shares of Vivabecause it considers that it has the «resources, capacity and experience to negotiate and close an acquisition in an agile manner».
(Also read: JetSmart wants to buy all the shares of Viva Air: this is the proposal)
«Since our beginning we have had a very clear long-term vision: to establish a low cost airline in South America. Colombia is the second most important market and, therefore, we have closely followed the possibility of also being able to enter the domestic market,» said Estuardo Ortiz, CEO of JetSmart Airlines, in an interview with EL TIEMPO.
JetSmart is a relatively young airline, it started its operations in July 2017 and currently mobilizes more than 16 million passengers. By 2028, the goal is to transport more than 100 million people. Its fleet is made up of 23 Airbus aircraft and it also has another 101 aircraft on order.
In Colombia it already has a presence, but with international routes. Since 2019 it has been traveling from Medellín, Cali and Bogotá to Santiago de Chile, it also has a single route between Cali and Antofagasta.
Avianca’s objections
JetSmart’s declaration of interest as the sole objective of using a proposal, by all accounts unfeasible, to distract from the integration request of Viva and Avianca
As expected, Avianca reacted to the interest of this airline and assured that «not a real option» to solve the Viva crisis because both JetSmart and its second largest shareholder (American Airlines) operate in the Colombian market.
Therefore, any transaction would require the same approvals that you need Avianca for integration with Viva. And it would not only be in Colombia, but also in the other markets in which Viva will participate together with JetSmart and/or American Airlines.
«JetSmart’s declaration of interest as the sole objective of using a proposal, clearly unfeasibleto generate a distraction to the request for the integration of Viva and Avianca ”, assured the company.
However, Estuardo Ortiz said that American is a minority partner in JetSmart, has no control over the airline and has nothing to do with this process that Viva Air is seeking to initiate.
He was also emphatic when stating that «JetSmart is a viable option, it is real and we have the capacity and resources to make it happen. We believe that it is an excellent option for the Colombian market, because it will allow more competition, better prices, and we can add value to the country and to the shareholders (of Viva)”.
Regarding the issue of approvals, he indicates that they would be simpler if compared to what is required for business integration. Therefore, the purchase operation would be «quite easy and quick to achieve.»
(Also read: Viva Air’s letters in the face of uncertainty over eventual integration with Avianca)
Negotiate with Avianca?
Faced with the possibility of entering into some type of negotiation with Avianca, Ortiz assured that what they expect, for now, is that the shareholders, the administration and the directors of Viva attend to the request that was made.
«Of course we are open to understanding the shareholding structure of the company, understanding the operation and soon reaching a definition that sale for the benefit of users«, he claimed.
We are convinced that the JetSmart offer is a very positive alternative, because we do not have routes in common with Viva in Colombia, something that does happen with Avianca
For now, JetSmart is waiting for Viva to respond to the letter that was filed and, if positive, start talks immediately to enter into a negotiation that allows them to acquire this airline.
«We are all aware of the situation (financial of Viva) and we believe that the faster it is, the better. We are convinced that the JetSmart offer is a very positive alternative, because we do not have domestic routes, We do not have routes in common with Viva in Colombiasomething that does happen with Avianca”, added the CEO.
And since this purchase intention was only known until last Monday, he says that it is too early to make estimates of the offer.
But beyond this possibility becoming a reality, JetSmart is also thinking of increasing its operations in Colombia, and in November 2022 it participated in a public hearing from Aerocivil to request permits for operate 27 domestic routessomething that is still in process.
However, he acknowledges that the market in Colombia is limited because the El Dorado airport in Bogotá has time slot restrictions, so he considers that it is not easy to enter the country.
«Definitely, our interest in Colombia is long-termIt is strategic and will be maintained. However, right now the ball is in Viva’s court and we hope that we can start these talks immediately and move quickly,» Ortiz said.
