Reuters reports that Colombia’s civil aviation authority formally approved a merger between Avianca and Viva Air. What do we know about the Colombian market?
As always, here’s a model.
- Colombia’s traffic has recovered from the pandemic and is back to previous levels. From April 2020 and August 2020, there was no air travel in the country.
- Viva’s collapse was traumatic. The airline claimed it could not afford to stay in business. It has refused to refund tickets or help passengers with lodging or food.
- The regulator’s concern with allowing the merger focused on allowing certain routes to potentially be monopolies. It appears this concern has been overcome. Like most small markets, there is a concentration in traffic flow among a few cities. The top seven cities accounted for 36% of traffic in 2022. This compares to these same markets accounting for only 30% in 2019.
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