Avianca or Liquidation: VIVA Deal is Almost Impossible, JetSMART CEO Says


While Colombian aviation authorities are moving ahead at their own pace with the decision to integrate Viva and Avianca, even as thousands of passengers remain stranded two weeks after the interruption of its scheduled flights, another of the ultra-low-cost carrier’s suitors has made its position clear on the process and distanced itself almost definitively from any possibility of participating in its rescue.

See also: Breaking: Viva suspends operations

In an exclusive interview for Aviacionline on Monday (the full content of which will be published in the coming days), JetSMART CEO Estuardo Ortiz said that “at the moment, although the door is not closed, we find it very unlikely, I would say almost impossible” to complete the purchase of Viva.

“Indeed, at the beginning of February we sent a letter to Viva’s shareholders with the intention of moving forward with a negotiation process to buy 100% of the shares,” Ortiz said.

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See also: Viva’s main investor Castlesouth prioritises Avianca deal over JetSMART’s offer

“The context allowed it in the sense that the Colombian government had already spoken out against the integration with Avianca although it had recently opened a door again in a second process,” he continued, noting that they were convinced (and still are) that there was no overlap between JetSMART and Viva and that therefore the offer would allow for more competition and consumer benefits.

“The reality is that this negotiation has made very limited progress. Publicly both Viva and Avianca stated that the only option was integration with Avianca and that is the reality,” the executive added.

See also: Castlesouth: “Viva has reached a critical point”.

That is why JetSMART celebrated last week that Aerocivil has approved its application to begin the process of setting up a subsidiary to operate domestic flights in Colombia.

See also: After Viva crisis, Aerocivil approves JetSMART Colombia’s request and starts certification

“The plan now is focused on establishing the airline and taking advantage of this space in the Colombian market,” concluded Estuardo Ortiz on the subject.

Viva may fall, but the low-cost model is solid

Asked if the crisis that Viva is going through is leading them to rethink some of the issues involved in the implementation of the low-cost model in the region, Estuardo Ortiz said that although he is not aware of the details that led the airline to experience this situation, it has nothing to do with the model, but with its own circumstances.

Although he does recognize that aviation in the world and the region has gone through an exceedingly difficult period during the pandemic and, when the recovery was progressing, the war in Ukraine put significant pressure on the price of fuel.

“The low-cost model is proven worldwide to be the most sustainable, the most profitable and the fastest growing,” he added, citing the example of Indigo Partners’ sister airlines, which have had record operations both during and in the aftermath of the pandemic.

Edgardo Gimenez Mazó
Edgardo Gimenez Mazó
Cofundador de Redactor en Aviación Comercial e Infraestructura. Product Manager. Basado en Rosario, Argentina, pero a uno o dos vuelos de cualquier lugar.


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