At 0:21 a.m. on April 29, Mexico time, Avianca (Colombia’s flagship airline) confirmed its interest in adding the young ultra-low-cost company to its group Live (before VivaAir and before VivaColombia), including its operation in Peru.
Both brands are underpinning the recovery of tourism in both countries.
Without having formalized before the corresponding authorities the announcement of what could be a merger, although said step has to be taken, it was reported that “Declan Ryan, founding partner of Livewould join the board of directors of the new group, contributing all his expertise in the world of aviation”.
In reality, it will be in charge of tightening operating costs and analyzing in detail the rate families that Avianca had launched months ago to compete, as far as possible, with the low-cost airlines that continue to sweep.
This man of Irish origin and who is said to love a low profile, is a pillar of the austere and efficient airline business worldwide. the family business, Irelandia Aviationfinanced the creation of Ryanair in Europe, Tiger Airways in Asia, Allegiant Air in United States, VivaAerobus in Mexico and VivaColombia.
In their business model it is usual that after a while they sell their shares. So it happened with VivaAerobuswhich is now 100% Mexican (under the command of Roberto Alcántara) and is in the process of finalizing its alliance with Allegiant Air.).
And as in the low cost there are high relations VivaAerobus Y Live they started an interline agreement last year that in its first stage includes for the Mexico-Bogotá route, with which they will offer a better offer to their clients.
“The decision to unify the economic rights of both groups is made after the biggest crisis in the history of the airline industry, generated by Covid-19, which forced airlines to adapt to new ways of flying and strengthen their operations to face future challenges”, he detailed.
What if, Aviancadespite not very good forecasts, managed to resolve its financial restructuring process at the end of 2021 and came out of Chapter 11 of the United States Bankruptcy Law.
Based on information released this morning by Aviancauntil the companies apply for and obtain the permits, they will not be part of its holding company and Viva’s operations will continue to compete with the airlines that are part of Avianca Group.
“Furthermore, while the authorizations are not achieved, the way in which users, suppliers, employees and entities relate to the different airlines will remain the same, maintaining their internal and external processes, as well as their own sales channels”, was explained.
One detail to consider in the approvals is that, during the first two months of 2022, on flights within Colombia, Avianca Y Live added a market share of 59% with its two million 985,117 passengers.
Regarding the effect in Mexico, the operations of Avianca they are historic, but Viva is planting the flag with a frenzy: It already operates the routes: Bogotá-Mexico City, Medellín-Mexico City, Medellín-Cancún and Cali-Cancun. In addition, between May and June, Cartagena-Mexico City and Cali-Mexico City will begin.
As if that were not enough, on April 20, he requested authorization in his country to fly the Bogotá-Monterrey and Bogotá-Guadalajara routes (the first is to the VivaAerobus hub and the second will arrive at a strategic airport for Volaris).
The role of William Shaw
While more details of the agreement are known, It’s tourism! takes up fragments of a couple of good notes from the last 10 days related to the Mexican William Shaw, brain in the creation of Viva’s business model.
The first was published in the Colombian newspaper La República, where Shaw, who now leads UltraAirhe said: as a pioneer in having brought the low-cost model to Colombia, I feel very honored of a possible acquisition by Avianca a Live.
The second, published on T21, where the CEO of the complicated inter jetCarlos del Valle, told Ruth Arellano that in the 13 months that they have been restructuring, and in order to determine responsibilities in the management of the company on strike, “it was until this stage that they decided to sue criminally for diversion of resources to 12 former directors of the two past administrations, including José Luis Garza, who served as CEO for 14 years, William Shaw, who succeeded Garza and lasted just over a year, and Julio Gamero, former commercial director.