Colombia’s Civil Aviation Authority (Aerocivil) is set to conditionally approve the Avianca and Viva Air merger, according to a report by Bloomberg. Viva Air ceased operations 22 days ago, unable to face its debt levels without a partnership with the country’s largest carrier.

Merger approved?

On Tuesday, Bloomberg reported that Aerocivil will approve the merger between the two airlines after evaluating their proposal and its possible impact on free competition in the South American aviation market.

An Avianca plane
Photo: Markus Mainka/Shutterstock

At the moment of publishing this article, Aerocivil had not made any official announcement. On social media, Colombia’s civil aviation authority stated that any public announcement would be preceded by a notification to the interested parties, Viva Air and Avianca.

According to Portafolio, the approval would include the condition of giving up several slots at Bogota’s El Dorado International Airport (BOG). Avianca had offered to give up to 155 slots at the airport. Simple Flying reached Viva Air for comment on the news. The airline said it had no comment available as it hadn’t been notified of any development.

Viva’s crisis

Even if the merger between Viva Air and Avianca is approved by Colombia’s authorities, many questions remain. The most important is how Viva Air will be able to resume flying. The ultra-low-cost carrier ceased operations on February 28. After 22 days, the airline has lost most of its fleet (including three planes that have recently been moved to Tucson until further news). Moreover, Viva’s credibility and public confidence has taken a toll after the company ceased operations.

A Viva Air aircraft
Photo: Markus Mainka/Shutterstock.

Avianca alone has relocated over 66,000 passengers who held tickets to fly with Viva Air, and other airlines, such as LATAM, have helped in these humanitarian efforts.

Leaving the COVID-19 pandemic aside (in which many airlines halted all commercial flights only to restore them in the future), it is very complex for carriers to stop flying and then restart. In the Latin American region, we have seen plenty of examples of companies ‘temporarily’ stopping their services, only never to fly again. In recent memory, Mexico’s Interjet and Brazil’s Itapemirim Transportes Aéreos come to mind.

What have Avianca and Viva proposed?

After the first refusal of their merger took place last year, Viva and Avianca outlined a new draft. In this draft, they offered five solutions to gain the sympathy of the local authorities on their merger, including,

  1. Decrease of participation at Bogota’s El Dorado. They would return a relevant percentage of slots and cede them to competitors with the objective that other airlines may, if they so wish, grow their operations in Colombia’s largest airport and second largest in South America.
  2. Maintain the brand and low-cost model of Viva. In the past, Avianca has absorbed many Central and South American carriers into its brand.
  3. Launch a codeshare agreement with Satena, Colombia’s State carrier, and keep Viva’s interline agreements.

If the Viva and Avianca merger is approved, Viva Colombia and Viva Peru would also be a part of the future Abra Group Limited, a holding company that will encompass Avianca and GOL Linhas Aéreas.

Do you think it is a good idea to approve the merger of Avianca and Viva Air? Let us know in the comments below.

Source: Bloomberg, Portafolio.

Find the latest South American aviation news here.