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The merger of Avianca and Viva Air has encountered a major hurdle, as the Colombian government opposes the proposed merger. The move could be a blow to Avianca’s plan to create a pan-South American airline organization with Brazil’s Gol.
Colombia’s Civil Aeronautics Authority, or Aerocivil, said Tuesday that the merger of the country’s first and third-largest airlines could simply lessen the festival and hurt consumers. It could also increase the barriers facing competition in the market. In addition, Aerocivil said that Viva Air The monetary situation, which according to the airline required speeding up the approval of the merger, is not so bad as to “affect its viability in the market. “
“We are involved in the direction of the decision, because itArray. . . ignores the prospective effect that the disappearance of Viva would have on users and the market,” Avianca CEO Adrian Neuhauser said in a statement about the decision. “At Avianca, we reiterate our commitment to actively participate in the rescue of Viva. “
Avianca first announced plans to acquire, but not merge, Viva Air in April. However, in August, airlines applied for accelerated antitrust approval from Aerocivil for a merger that was “vital to the sustainability and development” of Viva Air. In an October interview, Viva Air CEO Felix Antelo said the airlines plan to continue operating as separate brands, but will coordinate schedules and fares to give travelers greater flight options.
“It will provide us with much more powerful and greater monetary muscle than we had before,” he said. “We’re going to continue to be the [low-cost] model, we’re going to continue to be the brand, [and] they’re going to keep rates low. “
Antelo also said that “remaining independent in aviation in the 2020s is an option. “
The Avianca-Viva Air merger is the first step towards the creation of Abra, a new South American corporate airline holding company from the merger of Avianca and Gol. The organization also has the option to take a stake of at least 42% in Chilean airline Sky. .
Aerocivil said it would reconsider the deal if Avianca and Viva resubmit their merger request and offer “remedies” to encourage competition.
Updated with the observation of Avianca CEO Adrian Neuhauser
Tags: abra, avianca, colombia, gol, mergers and acquisitions, sky airline, viva air