February 26, 2024

Colombia’s Viva Air grounds fleet after Avianca merger hold-up

Viva Air said it has suspended operations as the indebted low-cost carrier awaits a ruling by Colombia’s civil aviation authority on its potential merger with Avianca 

Passengers left stranded in airports across Colombia as a result of the suspension began protests and blockades inside airport terminals, while Transport Minister Guillermo Reyes said other airlines were working to get them to their destinations.

Viva Air said late on Monday it had halted ticket sales and grounded its entire fleet after the regulator allowed five other airlines including Aerolineas Argentinas and JetSMART to take part in the merger process.

They had argued they would be affected by Viva Air’s integration with Avianca, Colombia’s flag-carrier. Low-cost carrier JetSMART and regional giant LATAM Airlines have both expressed an interest in buying Viva Air.

Viva Air’s financial difficulties stem from the impact of the coronavirus pandemic, worsened by rising fuel prices in 2022 and the depreciation of Colombia’s peso.

“The (civil aviation authority’s) unprecedented decision will result in further delays in reaching a decision, for which Viva is forced to announce, unfortunately, the suspension of its operations with immediate effect,” Viva Air said in a statement.

Viva Air said it will continue negotiations with creditors under a restructuring process that began this month and will work to ensure it can restart operations at a future date, assuming the regulator approves the merger.

The airline grounded five of its planes last week and named Francisco Lalinde as interim president and chief executive, replacing Felix Antelo, who resigned citing health problems.

Viva Air and Avianca’s potential merger has suffered repeated delays, with the civil aviation authority objecting to the deal last November, before annulling and reopening the process in January after citing “procedural irregularities”.

Source : Reuters


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