I want Viva Air... you want Viva Air... they want Viva Air... we all want Viva Air! Or at least, that’s what it looks like. On Tuesday, LATAM Airlines Colombia expressed its interest in initiating negotiations to acquire Viva Air, joining JetSMART and Avianca in their bidding efforts to purchase the ultra-low-cost carrier.
One more buyer
LATAM Airlines Colombia has expressed its interest in initiating negotiations to acquire Viva Air Colombia in a written communication to the president of Viva Air and Castlesouth Limited (the company’s holder of voting rights). The airline, a member of LATAM Airlines Group, said that any transaction is subject to a financial analysis to be carried out expeditiously, an agreement between the parties, and the corresponding regulatory approvals.
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LATAM has now become the third airline to express interest in acquiring Viva Air, an ultra-low-cost carrier led by Felix Antelo. Viva Air is based in Medellín, Colombia, and operates about 15% of all departures from the South American country. Last year, the company reached an agreement to merge with Avianca under one holding but maintain their separate brands.
But then, earlier this month, the Chilean airline JetSMART also announced its interest in acquiring Viva.
Viva Air Colombia closed 2022 with a fleet of 19 Airbus A320 family aircraft and carried 8.1 million passengers to, from, and within Colombia.
LATAM is prepared to strengthen its operations
The Colombian branch of LATAM is looking to increase its operations in one of the hottest South American markets in the post-COVID era. In a statement, LATAM Colombia said that a potential acquisition of Viva Air would become a growth opportunity, offering Colombian consumers “the best value proposition in the local market in terms of service, and the country new alternatives to strengthen its connectivity and development of tourism.”
LATAM added acquiring Viva Air would be the best option to strengthen the conditions of the market, and is the best option to offer the necessary support for Viva to address its complex financial situation. This month, Viva Air launched a reorganization process, giving the company 90 days to renegotiate its debts with its creditors, in a process slightly similar to a Chapter 11 bankruptcy in the United States.
Which airline should Viva pick?
Viva and Castlesouth have said in the past that they are sticking with their merger process with Avianca. This week, Castlesouth released a statement saying,
“Given Viva’s current critical financial condition, immediate approval by the National Government to integrate Viva with Avianca is in the best interests of Viva and its passengers, creditors, employees, and other interested parties, including the Colombian public.”
Meanwhile, Avianca has said that the recent proposals from JetSMART and LATAM are not viable. Instead, these offers appear to be ill-intended since, in the past, many companies –including LATAM– have opposed the Viva-Avianca merger. Given the dire financial situation Viva is currently facing, maybe the airline should stick with its current plan.
What do you think about this latest development? Which airline should Viva Air merge with LATAM, JetSMART, or stick with Avianca? Let us know in the comments below.