Avianca pushes back on Colombia’s conditions for it to take over bankrupt Viva Air

Colombian authorities have tentatively approved Avianca’s proposed merger with bankrupt Viva Air under strict conditions following alleged antitrust violations by the legacy carrier. Aerocivil, Colombia’s civil aviation regulator, approved the deal earlier in March with a number of conditions. They include resurrecting Viva, which shut down on February 27, as its own standalone discount brand; refunding tickets for all passengers affected by the shutdown; and giving up slots at the congested Bogotá airport to competitors. Most of these are the standard fare when it comes to mitigating the impact of airline mergers that concentrate capacity in the hands of one carrier or group. But Avianca, after months of arguing its case to merge with Viva — and even offering some concessions in exchange for approval — is not simply accepting the approval and getting on with things. “We will analyze in detail the feasibility of conditioning in light of what is Viva today. That company no longer has the same capabilities in terms of route network, aircraft, and workers,” Avianca CEO Adrian Neuhauser said in a LinkedIn post following Aerocivil’s decision. The key difference appears to be the fact that Viva is not a going entity anymore. Maintaining the brand would require restarting the airline and that would likely require more capital than Avianca budgeted for— capital that Avianca may not have following its emergence from US Chapter 11 bankruptcy restructuring in late 2021. But the harsh conditions come into a new light given the recent revelations that Avianca may have violated Colombian antitrust law in its takeover of Viva. Numerous local media outlets have reported that, following Avianca’s purchase of Viva early last year, it installed a board loyal to its own interests at the ultra low-cost carrier despite repeated assurances that it had no say over commercial matters at the airline. Story has more.<br/>