JetSMART has signed a Letter of Understanding to acquire 100% of the shares in Colombia’s Ultra Air, as the change-up of the industry continues.
The next 30 days will allow JetSMART to conduct due diligence on the technical and financial data from Ultra Air. Any agreement thereafter will need to obtain the blessing of local authorities.
Ultra Air will continue to operate independently of JetSMART until the deal is closed.
The news comes on the back of the cessation of Viva Air’s operations and rumors that Ultra Air is facing financial problems – rumors which were strongly denied by the Colombian airline founded by industry veteran William Shaw.
JetSMART had already planned to enter the Colombian domestic market, having filed the paperwork recently.
The Viva Air Situation: How Does It Impact JetSMART?
Colombian low-cost airline Viva Air has initiated the business recovery process with the goal of achieving its permanence in the market.
The process initiates in the heat of a highly anticipated conclusion and decision of a possible merger with Avianca.
Viva Air, the low-cost airline which serves Colombia and the region, has recently announced its initiation of a business recovery process, the Delaware Business Recovery (PRE), in accordance with regulations set to protect companies heavily affected by the Covid-19 pandemic.
The airline’s view with this process is to achieve permanence in the market while they await an urgent definition from Aerocivil regarding a possible alliance with major carrier Avianca.
Viva’s determination to initiate the process occurs due to the crisis the airline is facing when adding to the effect of the Covid-19 pandemic, along with the current macroeconomic factors that are of public knowledge.
Adding to this, the company (Viva) has not been able to access capital over the past nine months due to the lack of possibilities to integrate with another airline, which in this case is Avianca, currently pending authorization from the National Government.
Explaining the decision is Viva themselves, who describes their decision as the following:-
“Viva accepts this voluntary recovery process that lasts 90 days in order to restructure their debts through a negotiation with their major creditors to continue operating under sustainable conditions that guarantee the continuity of the company.”
“This decision comes after six months of waiting for the definition of the alliance with Avianca, which, if approved, will allow us to continue in the low-cost business through our linkage to another group of airlines with weight in the region, with which we want to ensure the loss of jobs, and reinforce our commitment to generating higher levels of connectivity in the country at low cost on the basis of obtaining the required capital injection.”
“After studying all the alternatives available to the current situation, we enter this voluntary mediation process while we wait for the urgent decision by the authority of our alliance with Avianca.”
“Just as we have adapted in the past, we are convinced that we will be able to overcome this situation for the good of all passengers who have benefited from the low-cost model in which we are experts.”
“During this restructuring, at Viva, we will continue to ensure the continuity of operations and the provision of our services.”
“Finally, some news against this process, the operations of the company, or the descriptions by the authority on the alliance with Avianca, will be communicated opportunely to the opinion public, media, allies, and especially to partners and passengers.”