Castlesouth claims Viva Air has reached a critical point

Last Friday Colombia’s Aerocivil announced the opening of a three wek period for third parties to state their position on Viva’s integration with Avianca and for them to respond, as a preliminary to what could be the approval of the transaction.

But considering the value of time for the ultra-low-cost carrier, many fear that those three weeks may be the final push they need to collapse. And in that sense on Monday Viva had to ground five of its A320s at the request of the lessor.

In response, Viva’s controlling shareholder, Castlesouth Limited, issued a statement today saying that «Viva Air has reached a critical point».

«The loss of some aircraft from its fleet due to Aerocivil’s delay in granting approval represents a direct loss in revenue for Viva, reduces travel options for thousands of Colombians, and puts at risk more than 1,000 well-paid, knowledge-based direct jobs in Colombia, as well as approximately 8,000 other indirect jobs in Colombia resulting from a multiplying effect,» Castlesouth statement said.

«We want to be clear: the only viable path within the time period that Viva Air can continue to operate is for Aerocivil to allow Viva Air to form part of a larger and stronger airline group,» they continued, clarifying that while other companies (LATAM and JetSMART) have expressed their willingness to discuss the purchase of Viva, so far none have submitted an offer, but that even if they did and a deal could move forward, regulatory approval would likely not come in time.

«The proposed transaction awaiting Aerocivil approval is not novel: in other countries, legacy carriers and low-cost disruptors have successfully partnered, including in the case of Iberia, Spain’s legacy carrier, and Vueling, a low-cost airline that today continues to benefit Spanish and other European passengers,» Castlesouth added.