Avianca pronounces itself before Aerocivil's refusal to join with Viva

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officially, The airline Avianca made public its pronouncement before the negative decision taken by Aerocivil in response to the request to belong to the same group with Viva.

Avianca receives with concern the recent negative decision taken by the Civil Aeronautics regarding the joint application of Avianca and Viva to be part of the same business group.

This is how the statement begins, where the largest airline in Colombia shows its concern at the denial of the Colombian aeronautical authority to the request made by both companies.

Aerocivil says no to Avianca and Viva

For its part, the governing body has concluded that integration represents risks for competition in the sector and the well-being of consumers..

Once the information provided and the data accessed by the Authority have been studied, it was concluded that, if the proposed integration is allowed, it will promote, among others, the following effects:

1. Generate or reinforce market power in favor of the integrated entity (Avianca, Viva Air and Viva Peru). The participants participate in 59 national routes, that mobilize the 93.7% of the country's domestic traffic. of these routes, on 29 national round trip routes participate coincidentally.
2. This economic group would reach 100% of participation in 16 national routes.
3. The economic indicators used to assess this integration show considerable potential deterioration. In terms of free competition, would mean a setback and a return to levels that were not seen in the country for more than 7 years.
4. Viva, which has been a relevant player in the Colombian market, it has boosted competition in the sector and has become a valuable alternative for Colombian and regional consumers, would disappear as an independent competitor.
5. The other competitors would face new difficulties to grow or enter markets affected by higher barriers to entry and greater market power..
6. Consumers could be harmed to the extent that the integrated entity (Avianca, Viva Air and Viva Peru) would have more facilities, incentives and lower risks by increasing your prices, reduce frequencies, cancel routes or reduce complementary services, among others.
7. Free competition is a right of all that entails responsibilities. The authorities in charge of authorizing business integrations have a legal and constitutional duty to protect the market, free economic competition and, above all, to customers.

This application, that seeks to protect passengers and jobs and promote connectivity in the country, would have allowed Avianca to support Viva to turn around the company's financial situation low-cost. in the event of delays in the payment of financial commitments with the lessees of the aircraft, as reported by Avianca.

Adrian Neuhauser, President and CEO of Avianca affirmed:

"We are concerned about the meaning of the decision, because it goes against the needs of the country and ignores the potential effect that the disappearance of Viva would have on users and the market. From Avianca we reiterate our willingness to actively participate in the rescue of Viva, seeking to maintain the connectivity of travelers, strengthen tourism and preserve formal employment."

Faced with this scenario, Avianca will analyze in detail the decision of the Aerocivil and will evaluate all the legal alternatives available to seek the necessary approvals.

It is important to clarify that this process is independent from Abra Group, project in which the shareholders of Avianca and GOL keep moving forward.

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