Ultra Air, the newly formed Colombian low-cost airline founded by businessmen William Shaw (also the founder of VIVA) and Oscar Herrera, stated in a press release that it opposes the merger between the Avianca group and VIVA (formerly Viva Air Colombia), citing the monopolistic potential of such business.
Ultra Air’s statement begins by stating that «with this integration, Avianca and Viva would have 65% of the market. There is no possibility of authorizing this operation». According to data from the Colombian aeronautical authority (Aerocivil), the current operations of Viva and Avianca represent 59% of the country’s commercial passenger traffic.
«Submitting the request on the first day of the government of President Gustavo Petro. Avianca’s argument of a possible bankruptcy of Viva Air in case it is not authorized is part of a pressure strategy. It seeks to favor this monopoly at a time when the market is registering a 30% growth in relation to 2019,» the airline’s statement adds. «If this integration were to be allowed, it would threaten what has been achieved in the last 10 years. Since the low-cost scheme came to be, the number of passengers increased from 14 million passengers in 2011 to more than 30 million projected for 2022».
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Ultra Air continues: «Additionally, with this integration, Viva and Avianca would be free to divide the routes that each one currently operates, favoring some destinations and increasing fares in others. This directly affects small and medium-sized companies that compete against them and, mainly, the consumer». Aerocivil has already made a statement on this topic indicating that they will analyze in detail the «possible effects that the integration will generate for consumers, the market and the commercial air transport service».
The airline also made a statement on the position that Avianca currently enjoys over other airlines in some terminals in the country. «We are already suffering from Avianca’s dominance in the use of infrastructure, parking positions, and slots in terminals such as Bogota’s airport. In the new scenario, this primacy could worsen,» Ultra Air said.
Aerocivil has already announced that it will exercise its functions «carefully». The agency indicated that it will analyze the presentations of the intervening companies and will determine the effects of the operation. Thus, it will seek to adopt a determination on the same in light of the regulations and the principles of free economic competition.
