Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

Colombia’s Bankrupt Viva Air Shuts Down

12 months ago

Struggling Colombian budget airline Viva Air stopped flying late Monday, less than a month after it filed for the local equivalent of bankruptcy.

The Medellin-based carrier, and Colombia’s third largest, cited the delay by the country’s civil aviation regulator, Aerocivil, in approval of its proposed merger with Avianca for its closure. Aerocivil has been considering the airline’s merger, which former Viva CEO Felix Antelo said last year was critical to the airline’s future, for nearly seven months.

“Unfortunately, we are at this point due to the repeated delays of the [Aerocivil] and their inability to recognize that what is best for Viva is also the best for all Colombians,” Viva said in a statement. “We remain hopeful that [Aerocivil] will take immediate action to ensure that Viva continues to paint the skies yellow.”

Aerocivil first rejected Avianca and Viva’s merger request in November due to competition concerns. The regulator reopened the review in January after Avianca and Viva offered concessions to preserve competition. However, after JetSmart and Latam Airlines expressed interest in acquiring Viva, Aerocivil postponed a decision on the merger earlier in February.

Viva said that it will continue talks with creditors with the hopes it can restart operations in the future.

Airlines

Avianca Defends Viva Air Deal as Latam Airlines Shows Interest

1 year ago

It may be a full on bidding war for bankrupt Colombian budget airline Viva Air. Latam Airlines has expressed interest in acquiring the carrier, joining Chile’s JetSmart, and put Avianca in defense mode over its proposed merger with Viva.

“The ‘proposals’ of the competitors that have expressed their alleged interest in Viva are, by all accounts, unfeasible, late and seem more of a distraction in the face of the request for integration of Avianca and Viva,” Bogotá-based Avianca said Wednesday. The airline acquired a controlling stake in Viva earlier this year but, as yet, its proposed merger with the discounter has been blocked by Colombian regulator, Aerocivil.

A Viva Air Airbus A320neo
(Viva Air)

Aerocivil took a second look at the Avianca-Viva deal in January after the airlines offered to divest slots in Bogotá, among other conditions, in order to preserve competition. The regulator tweeted on February 10 that it anticipated a “prompt” decision on the proposed merger following Viva’s filing for the Colombian equivalent of bankruptcy.

Avianca’s comments Wednesday came after Latam said the day before that it had sent an expression of interest to acquire Viva to the airline’s management and shareholder Castlesouth Limited.

“We consider that this potential acquisition would be the best option to strengthen the conditions of the free market, as well as offer the necessary support to respond to the financial situation of Viva Air Colombia and its creditors, ultimately resulting in the strengthening of the Colombian airline industry,” Latam said.

Viva is Colombia’s third largest airline. In the first quarter, Viva is scheduled to fly nearly 17 percent of all seats in the country, according to Diio by Cirium schedule data. Avianca will fly 43 percent and Latam nearly 21 percent. JetSmart currently does not have a domestic operation in Colombia, but serves the country from Chile.

The potential bidding war for Viva comes amid a wave of potential airline consolidation in Latin America. Avianca is separately in the process of merging with Brazil’s Gol to form the new airline holding company, Abra. And Brazil’s Azul tried unsuccessfully to acquire Latam in 2021.

Airlines

Colombia’s Viva Air Files for Bankruptcy, Keeps Flying

1 year ago

Struggling Latin American discounter Viva Air has entered the local equivalent to bankruptcy protection under Colombian law, as it works to restructure debt while awaiting a decision on its proposed merger with Avianca.

The Medellin-based airline said Friday that it had filed for Colombia’s Business Recovery Process, or known locally as PRE, to restructure its debt following challenges related to the Covid-19 pandemic and the delays in approvals to its combination with Avianca.

“The company has not been able to access capital during the last nine months since it has not yet been able to finalize its merger with another airline, which is still pending authorization from the national government,” Viva told Reuters.

Viva flights continue to operate as normal as the carrier begins restructuring, flight tracking website FlightRadar24 shows.

Viva CEO Felix Antelo told Airline Weekly in October that the merger was necessary for the airline’s continued survival. He noted that the deal would provide the budget carrier with the “financial muscle” to expand its low-fare model to more travelers.

Avianca and Viva announced plans to merge in August, after the former took a controlling stake in the latter earlier in 2022. However, Colombian regulator, Aerocivil, blocked the combination on competitive grounds in November. Aerocivil reopened the case in January after Avianca and Viva — Colombia’s first and third largest airlines — offered concessions to promote competition in Colombia.

And Chile-based budget airline JetSmart made a competing offer earlier in February to take full control of Viva.

Aerocivil tweeted Friday that it was advancing with “technical and legal rigor” its evaluation of the proposed Avianca and Viva merger, and anticipated a “prompt” decision on the matter.