Avianca steps aside and abandons integration with Viva

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Finally, after several dimes and bickering more less and less attractive conditions, Avianca desists from joining Viva Air. Photo Channel 1

With a comprehensive press release, The airline Avianca indicated that it is stepping aside and desisting from integrating with the bankrupt low-cost airline Viva Air, which accumulates almost 3 months from its cessation of operations

Avianca no longer goes by Viva Air

Avianca consistently reiterated for months its conviction that the integration was the best solution to respond to Viva's financial crisis., and to protect consumers, to employees and air connectivity. Nevertheless, after studying in detail the resolution 873 from 2023 of Aerocivil and verify that the conditions of Aerocivil make it impossible for Viva to recover and could even affect the stability of Avianca, Unfortunately, the Company was forced to withdraw from the integration.

The technical shortcomings of the resolution 873 they are numerous. Among other, the following stand out:

1. Little regulatory flexibility to provide certainty about the conditions for the reactivation of Viva's operations.
2. Lack of adjustment of the conditions to the current reality of Viva and the time elapsed between the start of the process and the 8 august 2022 and the date of a final decision. The conditions require Avianca to assume obligations, routes, and price and service level commitments that do not match Viva's remaining capacities after two months of suspension of operations.
3. Despite Avianca's willingness to return more than 75% of Viva's slots in El Dorado -and more than 72% of Viva slots in "premium" slots-, the authority demanded the return of a number of slots such that it would not allow Viva to base a single plane at the country's main airport efficiently. This would make Viva financially unviable, and it is explicitly contradicted by other conditions that require Viva to continue providing connectivity on the historical routes where it was the only operator, and that passengers affected by the cessation of operations of Viva be protected, which according to official figures exceed 500.000.

Despite this unfortunate outcome - in which other airlines in the market played a detrimental role, improving its competitive position in the market by delaying the decisions of the authority- the intention of Avianca is to continue being an ally of the Colombians, so it will seek to increase its number of aircraft to provide better connectivity to the regions, At the same time, it will implement mechanisms to offer employment options to employees of Viva. Given your intention to make this important investment, Avianca respectfully calls for the application of the Colombian Aeronautical Regulations (RAC) clearly and fairly to all operators equally.

Adrian Neuhauser, President and CEO of Avianca, said:

"Unfortunately the conditions of this resolution, that it is already the firm decision, make it impossible to rescue Viva by making it not only unfeasible as an airline, but, of integration under the conditions imposed by Aerocivil, would put the stability of Avianca and the connectivity of Colombia at risk. Since the beginning of the integration request we have been respectful of the process. However, it is our responsibility to protect Avianca and put it at the service of the country as a key piece of development, while taking care of our employees and our customers, and we respond to the shareholders who have believed in us by investing billions of dollars over the past few years”.

During the current crisis in the sector, in which not only Viva but also Ultra they have stopped flying, Avianca has constantly been the one who has sought to propose solutions: It is not only the only company that made a concrete proposal to save Viva, but has mobilized more than 160 thousand people for free (compared to less than 10.000 that have rescued all the other airlines in the sector as a whole) and has served critical destinations such as San Andrés with additional flights, Medellin, Riohacha or Buenos Aires, among many others. In this way, maintains its conviction of being a key actor for connectivity and avoiding a deeper crisis, and will continue to protect affected users from Viva and Ultra until the 31 of May.

"Unfortunately, this long process puts Viva at imminent risk of disappearance, airline that brought the low-cost model to the country, put millions of Colombians to fly at competitive prices and gave direct and indirect employment to thousands of families. Now the challenge for the country will be to advance plans to protect the sector and prevent Colombia from continuing to lose competitiveness, diverting the flow of passengers to countries like Panama, Chile and Peru” concluded Neuhauser.

In this way, Viva Air ends as we knew it until February of this year, leaving the distant possibility that some other air actor is interested in rescuing this airline and what is indicated, it is hardly salvageable.

What do you think of this whole process and the time it has taken??

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