Viva Air has announced the suspension of its operations with immediate effect, blaming the Civil Aviation Authority of Colombia (UAEAC) also known as Aerocivil for its decision.
The airline stated that following the latest statement from Aerocivil, which indicated that the authorities would continue to look into the Avianca-Viva Air merger, the delayed decision has forced Viva Air to announce, “the suspension of its operations with immediate effect”.
The Colombian low-cost carrier will continue to negotiate with creditors under the Business Recovery Process (Proceso de Recuperación Empresarial, PRE) procedures. The airline noted in a statement that it would continue to “work to preserve its ability to restart operations at a future date, assuming Aeronautica Civil immediately approves the pending alliance” with Avianca.
“After more than seven months of delays by the [government] entity, Viva Air has presented numerous pieces of evidence to the Colombian Government to demonstrate that it is in a critical financial situation, ensuring that the only way it can continue flying is for the Aeronautica Civil to allow it to become a part of a stronger and more well-capitalized group of airlines,” the airline continued in its notice issued on February 27, 2023.
Leaving no stone unturned
According to its own words, Viva Air left “no stone unturned” for Aerocivil to approve the merger with Avianca, including measures to alleviate fair competition concerns. Yet the authority has not done so.
The low-cost carrier submitted documents to Aerocivil in August 2022, which denied the merger request due to competition concerns in November 2022. However, in January 2023, the local civil aviation authority annulled that decision, citing “substantial irregularity in the processing of the administrative action in the first instance,” Aerocivil noted in a statement issued at the time.
“For weeks now, Aeronautica Civil has had everything necessary to issue a decision. They have had the full legal capacity and authority to issue that decision without further delay,” Viva Air noted.
The now-grounded airline also pointed out that it had provided documents to the local government proving its financial crisis and a series of measures to the civil aviation authorities to ensure that consumers would be protected following its merger with Avianca.
The low-cost carrier offered to relieve up to 105 slots at El Dorado International Airport (BOG) in Bogota, Colombia, a codeshare agreement with SATENA, and the continuation of Viva Air’s low-cost brand and model.
SATENA is a Colombian regional airline, serving domestic routes throughout the country. Its parent company is the Colombian Air Force (FAC).
Aircraft lessors also began to push for a decision, with Viva Air stating that they had met with the Colombian government, explaining that “they would no longer wait for a decision, causing the loss of more aircraft from [Viva Air’s] fleet in a short time”.
“We appreciate the support that our travelers, allies, collaborators, suppliers, media, congressmen, and other government officials have shown Viva Air. Unfortunately, we are at this point due to the repeated delays of the Aeronautica Civil and their inability to recognize that what is best for Viva is also the best for all Colombians,” the airline concluded.
In response, Aerocivil issued a statement on Twitter, reiterating the timeline of the initial decision to rebuff the Avianca-Viva Air merger and look into it again in January 2023, as well as providing more details about the current state of the approval application.
“The conditions offered by the parties involved to mitigate the impact on free competition will be transferred in a timely and transparent manner to interested third parties recognized in the action, who may express their opinions in this regard. The conditions will be assessed with technical rigor and under the need to protect the collective interest of free competition in order to determine if the integration operation can be viable,” the authority said.
“Notwithstanding the continuation of the integration control process by the Air Transport Directorate, in view of the statements made by Viva Air regarding its decision to cancel the flights of thousands of passengers who bought tickets with the expectation of flying, the entity, within the exercise of its functions and together with the Superintendence of Transportation, will especially ensure respect for the rights of affected users,” Aerocivil’s statement concluded.
Last week, Viva Air began to cut its fleet, citing financial issues. Its Chief Executive Officer (CEO) Felix Antelo quit abruptly, and the company appointed Francisco Lalinde as an interim President and CEO on February 24, 2023.