Avianca Group International (formerly Avianca Holdings) and Viva Latinamerica (Grupo Viva) have announced they will merge under a new holding company but continue operating as separate brands.
The agreement foresees the establishment of a new umbrella holding which will be an economic shareholder with voting rights in both Avianca Group and Viva Latinamerica. The latter will hold economic rights in trusts owning Viva (Colombia) (Medellín José Maria Córdova) and sister carrier Viva Air Perú (Lima International). An independent third party will hold voting rights but not economic ownership in these trusts. Declan Ryan, the founding partner of Viva, will join Avianca Group's board of directors.
Pending approval from the relevant competition authorities, both airlines will continue to operate wholly independently and compete with each other. If the merger is approved, they will retain separate brands and strategies.
"This new and robust group of airlines will benefit customers by using a more efficient cost structure to offer lower fares, a route network that delivers direct connections between destinations, a strong loyalty program, and friendly and efficient service. In addition, the combination will help ensure that customers in Colombia and Latin America have two airlines that serve the Latin American market," Avianca's main shareholder and Chairman of the Board of Directors Roberto Kriete said.
The financial terms of the merger were not disclosed. Both carriers are privately-owned - Avianca by creditors following its Chapter 11 restructuring completed in late 2021, and Viva by Irelandia Aviation. They did not disclose whether the shareholders of the new holding would be the same as Avianca Group's existing owners.
The ch-aviation capacities module shows that avianca airlines (AV, Bogotá) and Viva have a combined 61.7% market share by scheduled weekly capacity in Colombia (66% on the domestic market). Their presence in Peru is much smaller, with just a 4.2% combined market share. According to the ch-aviation fleets module, Avianca Group's fleet comprises twenty-one A319-100s, sixty-nine A320-200s, fifteen A320-200Ns, four A321-200s, A330-200s, thirteen B787-8s, a single inactive B787-9, and six A330-200Fs across AOCs in Central and South America. The LCC operates eleven A320-200s and eleven A320-200Ns in Colombia and Peru.
Avianca Group shares owners with SKY Airline (Chile) (H2, Santiago de Chile) but the two airlines do not cooperate operationally. The Chilean LCC said recently that a merger with Avianca was, however, not off the table.
