After questioning the merger between Avianca and Viva Air, LATAM Airlines Colombia, a subsidiary of LATAM Airlines Group S.A., expressed its interest in starting negotiations to acquire Viva Air Colombia.
At this point there are at least three suitors behind the company: Avianca, the Chilean airline JetSMART and, now, Latam.
Earlier , according to Wingo and LATAM Airlines, the Avianca and Viva Air merger could affect free competition in the air sector in the country.
"We continue to face the possible formation of an actor that would concentrate more than 60% of the Colombian air market and would control the essential infrastructure for the provision of the service (slots - takeoff and landing slots at airports), going against the healthy indices of competition and, therefore, affecting the general interest and collective well-being," says the Wingo statement.
Although Civil Aeronautics had objected to the merger between Avianca and Viva Air in November of last year, in January of this year, under a new administration, they backed down the entire process.
Now, In a written communication to the President of Viva Air Colombia and Castlesouth Limited, the company has informed that the operation is subject to a financial analysis, which it would be able to carry out expeditiously, to a possible agreement between the parties and to the corresponding regulatory approvals.
Viva Air has repeatedly said that the airline's only survival option is to integrate with Avianca , but LATAM says,
The Colombian subsidiary of the LATAM group is prepared and has the capacity to strengthen its operations in the country. In this way, an eventual acquisition of Viva Air Colombia becomes a growth opportunity, offering Colombian consumers the best value offer in the local market in terms of service, and the country new alternatives to strengthen its connectivity and development. of tourism.
LATAM Airlines added further,
LATAM Airlines Colombia has been operating in the Colombian market for 11 years, and throughout its history it has been constantly concerned about investing in the Colombian market.
For this reason, we consider that this potential operation would be the best option to strengthen the conditions of free competition, as well as offer the necessary support that will allow responding to the financial situation of Viva Air Colombia and its creditors, which will result in the strengthening of the industry. Colombian airline.
Meanwhile, Viva Air announced last week that it accepted the Business Recovery Process (PRE), a voluntary mechanism that allows companies that suffered from covid-19 to start negotiations with their creditors to settle their debts.
"This decision comes after six months of waiting for the definition of the alliance with Avianca, which if approved would allow us to continue in the low-cost business through our link to another group of airlines with weight in the region, with which we want to ensure the preservation of jobs, and reinforce our commitment to generate higher levels of connectivity in the country at low cost based on obtaining the required capital injection," Viva said in a statement.
According to the latest market review at the end of January 2023, Latam has a 26% market share within Colombia. For its part, Viva Air holds a 15% share. Thus, a merger could help Latam reach a 41% share, eventually becoming the first operator in Colombia, even above Avianca.
According to data published by Aerocivil, as of December 2022, Viva Air Colombia has a fleet of 19 Airbus320 family aircraft and transported 8.1 million passengers to, from and within Colombia.
