Avianca Pulls Out of Viva Air Deal

DALLAS - Colombia's largest airline Avianca (AV), has abandoned its plans to purchase low-cost carrier Viva Air (VH).

In a statement released on May 13, AV said that the conditions set out by the Colombian civil aviation authority, Aerocivil, "would not only render Viva financially and operationally unviable, but could also risk Avianca's stability and the sector's."

"Upon scrutinizing Aerocivil's Resolution 873 of 2023 and confirming that Aerocivil's conditions make Viva's recovery impossible and could even affect Avianca's stability, the Company was unfortunately compelled to abandon the integration process."

Viva Air Colombia Airbus A320Neo. Photo: Alberto Cucini/Airways.

"Impossible to Rescue"

Adrian Neuhauser, President and CEO of Avianca, added, "Unfortunately, the conditions of this resolution, which is already a firm decision, make it impossible to rescue Viva by making it not only unviable as an airline, but also, if the integration were to take place under the conditions imposed by Aerocivil, it would jeopardize Avianca's stability and Colombia's connectivity.

"From the beginning of the request for integration we have been respectful of the process. However, it is our responsibility to protect Avianca and put it at the service of the country as a key piece of development, while taking care of our employees and our customers, and responding to the shareholders who have believed in us by investing billions of dollars over the past few years."

Merger Plans

Plans to combine the two carriers under a joint holding company were put forward in April 2022. The two would continue to operate as separate brands. Both had struggled to recover from the pandemic, and the move, it hoped, would help improve the financial stability.

However, Aerocivil rejected the proposed merger in November 2022, claiming it would be a setback for competition in the market. Then in January this year, it announced it would review the deal again after stating there were errors in the initial review process.

But with the review process taking longer than anticipated, Viva Air and its Peruvian subsidiary Viva Air Perú (VV) were forced to suspend operations in January 2023 after running out of cash. The future of the airline that brought low-cost air travel to Colombia now looks increasingly in doubt.

https://airwaysmag.com/viva-air-suspends-operations/

Featured Image: Avianca Airbus A321 (N692AV). Photo: ony Bordelais/Airways.