LONDON – 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.
The recovery process is a go…
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.
Viva Air’s statement…
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.”
The possible alliance…
Earlier in 2022, AviationSource reported the two parts (Viva Air, and Avianca), had sought merger authorization.
The proposed merger aims to shore up Viva to its survival viable, while it faces a “complex financial situation that requires immediate intervention.” Felix Antelo, CEO and President of Grupo Viva, said.
The two parties had asked the Colombian authorities for permission to merge, ensuring the continuity of the ULCC model that gave so many Colombians the opportunity to fly in an airplane.
Avianca has asked the Colombian authorities to approve a merger with Viva under the legal figure “company in crisis”, allowing the possible bailout of ULCC. Avianca recently exited Chapter 11 and is currently in a strong financial position with less debt.