Columbian flag-carrying airline Avianca and Viva Air have received merger approval from the Columbian civil aviation authority. The merger was originally proposed back in April 2022 with the intention to keep the branding and strategies separate.
One of the merger conditions is that Viva Air reimburse all passengers who have been affected by flight cancellations and that it’s low-cost model is retained. Viva Air must also permit passengers with current bookings to fly, the authority said, and frequent flights between Bogota and Buenos Aires must be reinstated.
The merger is a lifeline for struggling Viva Air, which has been embattled financially following the coronavirus pandemic and seen its financial woes worsen due to higher fuel prices in 2022 and the depreciation of the Colombian peso. The carrier had temporarily suspended its operations in February after its financial struggles left it unable to operate. Avianca exited Chapter 11 bankruptcy at the end of 2021 after completing a corporate restructuring.
However, the proposal was blocked by the civil aviation authority in November, which said the deal represented a risk to competition and consumer welfare. However, the regulator annulled that ruling this January, citing procedural irregularities, and restarted its assessment of the merger.
“The decision to authorize the integration is conditioned on compliance with diverse structural and behavioural remedies,” the Columbian authority said in a statement late on Tuesday, according to Reuters news agency. Avianca is Colombia’s biggest low-cost carrier headquartered in Barranquilla, Colombia with corporate headquarters in Bogotá. It currently operates a predominantly Airbus fleet of 104 aircraft, with a further 176 on order, including 168 Airbus A320 neos.
Viva air is a subsidiary of Irelandia Aviation and is the third-largest airline in the country. The low-cost carrier commenced operations in 2012 and is headquartered in Rionegro, Columbia. It currently has a fleet of Airbus A320-family aircraft.