They approve the merger of Avianca and Viva Air: what are the conditions that must be met?

Through a releasethe Civil Aeronautics of Colombia made public its decision to approve the integration of the airlines Avianca and Viva Air, after the latter company announced at the end of February the total cessation of its operationsalleging as main foundation a financial crisis. However, the authorization of the merger from the Colombian government was approved under a series of conditions or “structural and behavioral remedies” that both companies must comply with:

Closure of Viva Air: Is there ‘blackmail’ to the Colombian Government for not giving in to a monopoly?

• That the rights of VIVA users are respected, canceled flight tickets are refunded and those who have tickets pending execution are allowed to fly.
• shall respond to affected VIVA passengers by the unilateral decisions of the company to cease its operations.
• Return of take-off spaces that aggravate the concentration in the most demanded slots, both in departures and arrivals. The objective is not to increase the entry barriers that access to the infrastructure of the market generates for this market. El Dorado airport.
• Keep the VIVA low cost scheme.
• Return of frequencies on the Bogotá-Buenos Aires route, which has been particularly affected.
• keep a effective rate limit on routes where the integrated entity remains with 100%.
• guarantee the dynamism on the routes object of greater concentration.

These conditions on the part of Aerocivil de Colombia are not the same as those offered by Avianca in the application process, because the government alleged that the proposed remedies did not achieve attenuate the concentration, dominance and asymmetry derived from the transaction.

Avianca questions the merger with Viva Air

As detailed Bloombergfrom Avianca they are reviewing the conditions to determine if they are viable because “Viva Air no longer has the same capabilities (route network, aircraft, workers) that it had before the temporary suspension of its operations,” according to says a statement from the airline.