Avianca and GOL sign historic agreement to create Abra Group
The major shareholders of Avianca and the controlling shareholder of Brazil’s GOL signed a historic agreement to create a leading Latin American air transport group under a holding company structure called Abra Group Limited. Subject to customary regulatory approvals and closing conditions, the Abra Group would control Avianca and GOL, bringing these iconic brands together under one holding company.
Through the recent investments made by Avianca and Viva shareholders, the Group would also have 100% of the economic rights to Viva’s operations in Colombia and Peru, but would not control it, and would have a convertible loan facility in an investment representing a minority interest in Chile’s Sky Airline.
Together, Avianca and GOL will anchor a network of Latin American airlines that will have the lowest unit costs in their respective markets, the leading loyalty programs throughout the region, and other complementary businesses. Avianca and GOL will maintain their brands, talent, teams and culture independently, while benefiting from greater efficiencies and investments under common ownership.
Abra will provide a platform that will enable the operating airlines to further reduce costs, achieve greater economies of scale, continue to operate a fleet of state-of-the-art aircraft, and expand their routes, services, product offerings and loyalty programs.
Together, the airlines that will become part of the Abra Group will be able to offer their customers the broadest and most complementary route network with minimal overlap between markets.
Abra’s financial strength will provide the participating airlines with long-term stability and agility, thus driving constant and sustained investment in innovation and synergies.
Abra Group will be co-controlled by Avianca’s major shareholders and GOL’s majority shareholder, and will be led by a management team with extensive aviation experience in the region, a long history of entrepreneurship and a proven track record of success in airline growth and transformation.
Roberto Kriete, who will serve as Chairman of the Group’s Board of Directors, built TACA into Central America’s leading airline in the 1980s before merging with Avianca in 2009. He also founded Volaris, the leading airline in the Mexican market, in 2006.
Constantino de Oliveira Junior, who will serve as Group CEO, pioneered the low-cost airline revolution in Latin America when he founded GOL Airlines in 2001. Along with the acquisition of VRG in 2007 and Webjet in 2011, he led the company’s growth to a market-leading position.
Adrian Neuhauser, currently President and CEO of Avianca, and Richard Lark, currently CFO of GOL, will serve as co-presidents of the Group and will retain their current positions with the airlines. Further details of Abra’s management team will be provided upon closing of the agreement.
The Abra Group’s management team will focus on generating synergies to ensure the lowest cost structures for each airline in their respective markets; expanding their route network, services, product offerings and loyalty programs; and developing new and innovative products and services that respond to the needs of today’s passengers and cargo customers in the highly competitive Latin American air transportation market.
Abra will also strive to ensure that the airlines are leaders in implementing environmental, social and corporate governance (ESG) criteria by having strong governance and financial strength to continue to invest in a fleet of aircraft with a lower carbon footprint, accelerating the airline industry’s progress toward its carbon-neutral goals.
“Our vision is to create an airline group capable of meeting the challenges of the 21st century and enhancing the flying experience for our customers, employees, partners and communities where we operate. Our customers will benefit by having access to the best fares, more destinations, more flight frequencies, more convenient connections, and the ability to earn and use points through airline loyalty programs. In addition, they will enjoy enhanced benefits and access to superior products and services,” said Roberto Kriete, Chairman of the Group’s Board of Directors.
“This agreement puts Abra’s airlines in a leadership position in the region’s air transportation market, serving a population of more than one billion people and a GDP of close to US$3 trillion – generating capacity and revenue growth opportunities. Our unique company structure will allow each airline to pursue its results while maintaining the independence of its brands, talent, team and culture; and, it will provide employees with more opportunities for personal and professional growth at every stage of their careers,” said Constantino de Oliveira Junior, Group CEO.
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