Avianca and Viva Air announce unification

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A major airline merger in Latin America is underway, with Colombian rivals Avianca and Viva Air close to an agreement to become part of the same group. The objectives of the agreement were officially announced in the early hours of this Friday (29).

Avianca released a statement in which the majority shareholders of the two companies announced that Viva will become part of the same holding company of the Avianca group. Declan Ryan, Viva’s founding partner, will join the new group’s board of directors.

“The eventual incorporation of the control rights of Viva’s operations in Colombia and Peru to the Avianca Group’s holding company will be conditioned to the request and obtainment of all the necessary regulatory authorizations in the required countries”, says the note.

While these authorizations do not come out, the companies will continue to act as competitors in the countries where they are present.

“In the same way, as long as authorizations are not reached, the way users, suppliers, employees and entities relate to the different airlines will remain the same, maintaining their internal and external processes, as well as their own sales and service channels. known today.”

Roberto Kriete, main shareholder and chairman of Avianca’s board of directors, said that the new group will be able to offer lower prices, thanks to what he called an efficient cost structure and a mesh of direct connectivity routes.

Also according to the statement released by the company, the decision to unify the economic rights of both groups in the same holding is taken as a consequence of the biggest crisis in the airline sector, generated by Covid-19.

Declan Ryan, founding partner of Viva, said that the company’s growth and expansion strategies will be maintained, under the banner of aerial inclusion.

Avianca Colombia (or Avianca Holdings) is the oldest operating airline in the Americas and the oldest in the world in terms of non-stop operations.

The company has gone through several owners and transformations, and even had a sister in Brazil, which ended up closing its doors. Now after leaving Judicial Recovery because of the Pandemic and for the reasons that led to the crisis in the Brazilian division, she bets high.

Months ago, the Colombian flag company’s plan was to acquire Chilean SKY, a low-cost newcomer that has been increasing its presence in South America.

The company’s focus would be to become a giant in the Andes, moving from the traditional model to the low-cost model, but this should now happen with the countryman Viva Air, which has just announced regular flights to Brazil.

According to analysis by Aviacionline, the Colombian market is dominated by Avianca, followed by Latam Colombia and Viva Air. The two companies will now be able to have up to 57% of the market if the deal is approved by the authorities, which could take up to 12 months.

Avianca has a fleet of around 100 aircraft of the Airbus A319, A320, A320neo and A330-200 models, and Boeing 787-8 and 787-9 models. In turn, Viva, founded in 2012, has 22 aircraft of the Airbus A320 and A320neo models.

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