Last April, Avianca's majority shareholders signed an agreement to become part of the same business group, unifying economic rights. In turn, they acquired 100% of the economic rights of Viva in Colombia and Peru, without this implying control or management. A month later, following Avianca's agreement with Gol, the creation of Grupo Abra was announced, which would group the investments made in the economic rights of Viva and a loan convertible into a minority position in Sky Airline.
Avianca has announced that in view of the information available in the market regarding the delicate financial situation that Viva is going through, Avianca has requested authorization from the Colombian Civil Aeronautics Authority to integrate, “in order to make 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”.
Given the relevance and urgency of this integration request for the country's competitiveness and air connectivity, Avianca said that it has held conversations in recent days with representatives of the new government, explaining the reasons for this request, which was formalized once the new government took office.
The airline states that market conditions (jet fuel prices, inflation and the appreciation of the dollar) have “forced this request to the Aerocivil to be accelerated and become of the utmost urgency, since in the first quarter of the year, when the operation was negotiated between Avianca and Viva shareholders, the financial situation of the low-cost company was different and Viva estimated that it had the necessary finances to compete normally”.
Adrian Neuhauser, President and CEO of Avianca 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.”
Avianca said that this strong new airline group would rescue the carrier and allow for a “more efficient cost structure, a route network that promotes direct connectivity between destinations, a strong loyalty program, and a friendly and efficient service that meets the needs of today's traveler”.