Last April Avianca and Viva signed an agreement to become part of the same group, followed by the 100 percent acquisition of Viva’s economic rights in Colombia and Peru. The partners have now requested integration authorization from the Colombian authorities.
On Monday (August 8, 2022) Avianca and Viva requested authorization from the Colombian Civil Aeronautics Authority to integrate. This announcement follows an agreement last April between the carriers to become part of the same business group, with the subsequent acquisition of 100 percent of Viva’s economic rights in Columbia and Peru by the new airline group. In May 2022, following an agreement with GOL, Grupo Abra was created, with the goal of becoming the air transportation leader in Latin America by combining the investments made in the economic rights of Viva with a loan convertible into a minority position in Sky Airline. The urgency of the request to the Colombian regulatory authorities has been accelerated in light of market headwinds from high jet fuel prices, inflation and the appreciation of the U.S. dollar.
In Monday’s announcement, Avianca’s President and CEO, Adrian Neuhauser, said,
“The integration request with Viva seeks to fight for its survival in the market, as well as to maintain the competitiveness it has built during 10 years of operation. Even with the complex outlook that aviation is experiencing in the world due to rising fuel prices, as well as the historical inflation in the region, Avianca has a solid financial position, evident in the recent announcements, which would allow it to achieve synergies and take advantage of economies of scale with Viva, provide financial support and participate in its management. We trust that the Aeronautical Authority will be able to study this request quickly, given its relevance for the country.”
According to Avianca, following integration Viva would become part of one of the most prominent airline groups in Latin America, creating efficiencies and synergies that would benefit the future of Columbia’s low-cost pioneer. The new group will also enable a more efficient cost structure, enhanced direct connectivity, and a stronger loyalty program. During the integration process, customers can expect Avianca’s flight offerings, products, services, operations and processes to continue as normal.