Gol and Avianca merge under the Abra group to save costs

The main shareholders of Colombian Avianca and the controlling shareholder of Brazilian Gol, Constantino de Oliveira Junior, released a statement this Wednesday (11) announcing the creation of the Abra group, which brings together the operation of the two airlines. The holding will control the two companies, which include the brands Gol, Avianca, Viva (Colombia) and Sky (Chile), all of which are low-cost.

The controllers of the Abra group will be Oliveira Junior and Roberto Kriete, founder of Taca, which was later merged with Avianca Airlines. Adrian Neuhauser, current president of Avianca, and Richard Lark, current chief financial officer of Gol, will be co-presidents of Abra. Paulo Kakinoff continues as president of Gol.

“The main shareholders of Avianca (Colombia) and the controlling shareholder of Gol (Brazil) signed a historic agreement to create a leading air transport group in Latin America, through a holding structure called Abra Group Limited (Abra Group)” , says the statement. Abra’s headquarters are in London. Oliveira Junior will be the executive chairman of the group and Kriete will be the chairman of the board.

“Airlines will maintain their brands, teams and culture while benefiting from greater efficiency and investments made by the same controlling group,” the statement said, noting that executives are expected to make a statement on the operation this Wednesday afternoon. According to the text, the transaction is subject to customary regulatory approvals and closing conditions.

“Together, Avianca and Gol will form the basis of a pan-Latin American network of airlines with
the goal of having the lowest unit cost in their respective markets, the leading loyalty programs in their regions and other synergistic businesses”, says the text.

Avianca Colombia, which joins Gol, has no connection with Avianca Brasil, controlled by Ocean Air – which only used the airline’s brand and went bankrupt.

According to the statement, Abra will provide a platform for airlines to reduce costs, gain economies of scale, continue to operate a fleet of modern aircraft and expand their routes, services, product offerings and loyalty programs.

Gol is one of the three largest airlines in the country, alongside Latam Brasil and Azul.

Airlines were one of the sectors most affected by the pandemic worldwide. In Brazil, companies were recovering routes and occupancy rate since the end of last year, with the focus on domestic tourism. But the war in Ukraine has sent the price of jet fuel soaring and has driven up ticket prices.

In late April, a merger between Avianca and its Colombian rival Viva Air had already been announced.

The statement also said that the group will hold a “non-controlling interest of 100% of the economic interests in Viva’s operations in Colombia and Peru and an investment in convertible debt representing a minority interest in Sky Airline (Chile).”