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BOGOTA — Indigo Companions-backed price range service JetSMART Airways mentioned on Tuesday that it needed to purchase Colombian low-cost service Viva Air, in a transfer that if profitable would scupper Viva’s plans to merge with Colombian flag service Avianca.
Chile-based JetSMART Airways mentioned in an announcement that it deliberate to open talks to purchase the Colombian airline nevertheless it didn’t disclose how a lot it would pay to amass Viva, nor its funding plans.
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JetSMART is a part of personal investor Indigo Companions’ portfolio of price range airways alongside U.S.-based Frontier Airways, Europe’s Wizz Air and Mexico’s Volaris.
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The Chilean service at present operates 79 routes throughout South America, together with flights to Colombian capital Bogota in addition to Medellin and Cali.
“We imagine {that a} merger between JetSMART and Viva Air will permit us to take care of the ultra-low-cost mannequin in Colombia, serving to to proceed providing extra routes at decrease costs,” JetSMART Chief Government Estuardo Ortiz mentioned within the assertion.
Colombia’s civil aviation regulator initially rejected a proposed merger between Avianca and Viva in November on the grounds that it posed dangers to competitors within the sector and the welfare of customers.
Avianca and Viva filed an attraction the identical month, proposing alternate options similar to yielding some routes and granting higher touchdown and take-off schedules to rivals.
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The regulator in January annulled the merger, citing procedural irregularities, and commenced the method anew with out both firm having to reapply.
A doable merger between JetSMART and Viva would provide the very best circumstances for competitors available in the market, Ortiz mentioned, including the airways don’t have competing routes in Colombia.
Avianca and Viva didn’t reply instantly to requests for touch upon JetSMART’s proposed deal.
Viva faces a posh monetary scenario because of the results of the COVID-19 pandemic, final yr’s rise in gas costs and the devaluation of the Colombian peso. (Reporting by Luis Jaime Acosta; Writing by Oliver Griffin; Enhancing by Jamie Freed)
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