On Friday morning, the shareholders of Avianca and Viva Colombia approved the acquisition of the ultra-low-cost carrier by Avianca. The approval will shake up the Colombian market; both carriers hold 50% of the domestic and international share.
Avianca and Viva Colombia under one holding
The majority shareholders of both airlines jointly announced that Viva would become part of the same holding company as Avianca Group International Limited (Avianca Group) and that Declan Ryan, founding partner of Viva, would join the board of directors of the new group, bringing all his expertise in the world of aviation, said Avianca in a statement.
The eventual incorporation of the rights to control Viva’s operations in Colombia and Peru into the Avianca Group holding company will be subject to requesting and obtaining all necessary regulatory authorizations in the required countries.
The decision to unify the economic rights of both groups into a single holding company comes after the biggest crisis in the history of the airline industry, generated by the COVID-19 pandemic, forced airlines to adapt to new ways of flying and strengthen their operations to face future challenges.
Avianca recently exited a Chapter 11 bankruptcy proceedings in the United States. At the same time, Viva Colombia (like many ULCC in the region) has quickly rebounded from the crisis, and it is carrying more passengers than in 2019. Moreover, Viva has launched many new routes in recent months via its hub at Medellin, Colombia.
The shareholders’ opinion
Declan Ryan, Viva’s founder, said,
“This is an important day for Viva as it is the perfect scenario to continue with our growth and expansion strategy, maintaining the flag of air inclusion and strengthening our company. In addition, if in the future the authorities approve the management of both groups in the same holding company, it will encourage the air transportation market to continue growing, promoting low fares for users and good service with the best punctuality, allowing everyone to fly to many destinations around the world. It will also be a source of qualified employment generation, providing more and better job opportunities for current and future employees, as well as continue to positively impact the connectivity of Colombia, the region, and the country’s economic development.”
Meanwhile, Roberto Kriete, Avianca’s main shareholder and Chairman of the Board of Directors, added,
“This strong new airline group would benefit customers by having a more efficient cost structure that would allow for even lower fares, as well as a route network that would promote direct connectivity between destinations, a strong loyalty program, and a friendly and efficient service in line with the needs of today’s traveler. In addition, it would give Colombia and Latin America a new and strengthened competitor that is sustainable over time, making both players continue to be relevant in the Latin American market.”
Daniel Martínez Garbuno is a Mexican journalist. He has specialized in the air industry working mainly for A21, a Mexican media outlet focused entirely on the aviation world. He has also published on other sites like Simple Flying, Roads & Kingdoms, Proceso, El Economista, Buzos de la Noticia, Contenido, and Notimex.