Avianca and Viva request their integration before Civil Aeronautics of Colombia
Last April, the majority shareholders of Avianca signed an agreement to be part of the same business group, unifying economic rights. In turn, they acquired 100% of Viva in Colombia and Peru, without this implying control or administration. A month later, after the agreement between Avianca and Gol, the creation of the Abra Group was announced, which would be one of the leaders in air transport in Latin America and would group together the investments made in Viva and a convertible credit in a minority position in Sky Airline.
Today, and given the information available in the market about the delicate financial situation that Viva is going through, this company and Avianca requested authorization from the Colombian Civil Aeronautics to integrate, with the aim of making the permanence of the low-cost airline viable for the benefit of passengers, connectivity in Colombia and Peru, as well as to safeguard jobs that directly and indirectly depend on Viva.
→ Avianca announces flights to Cali and Medellín from Cúcuta.
Given the relevance and urgency of this integration request for the country’s competitiveness and air connectivity, Avianca has held talks in recent days with representatives of the new government, explaining the reasons for this request, which was formalized once it took office.
It is important to point out that it is the market conditions (price of jet fuel, inflation and appreciation of the dollar) that have forced this request before Aerocivil to be accelerated and become of utmost urgency, since in the first quarter of the year, When the operation was negotiated between the shareholders of Avianca and Viva, the financial situation of the low-cost company was different and Viva estimated that it had the necessary finances to compete normally.
“The request for integration with Viva seeks to fight for its survival in the market, as well as to maintain the competitiveness that it has built during 10 years of operation. Even with the complex panorama that aviation is experiencing in the world due to the increase in fuel prices, as well as the historical inflation in the region, Avianca has a solid financial position, evident in 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 can study this request quickly, given its relevance for the country”, said Adrian Neuhauser, President and CEO of Avianca.
With the integration, Viva would also be part of one of the most relevant Latin American airline groups and efficiencies and synergies would materialize that could benefit the rescue of the low-cost pioneer in Colombia. Additionally, this new and solid group of airlines will allow for a more efficient cost structure, in addition to a route network that would promote direct connectivity between destinations, a strong loyalty program and a friendly and efficient service according to the needs of the traveler from today.
During this integration request process, the offer of flights, service, operational discipline and other Avianca processes remain normal. Likewise, the way in which suppliers, employees and entities relate to Avianca will remain the same, maintaining their own sales and communication channels, as they are known today.
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