Representatives of JetSMART and Ultra Air signed a letter of understanding on Thursday to initiate a due diligence process aimed at ascertaining the technical and financial status of the latter in order to move forward with its acquisition. This is expected to take around 30 days.
The news comes days after JetSMART CEO Estuardo Ortiz, in an interview with Aviacionline, stated that it was almost impossible to move forward with the purchase of the now paralyzed Viva.
See also: JetSMART considers it almost impossible to buy VIVA
On the intention to buy 100% of Ultra Air’s shares, Ortiz said they believe in the potential of the Colombian market and are determined to contribute and add to the development of tourism and employment in the country.
«We have seen the operational and commercial qualities of Ultra Air and have reached an agreement on the terms of the purchase of the airline. We look forward to moving forward efficiently with due diligence and working closely with the respective authorities,» he added.
The process will not interfere with the operational status of Ultra Air, which will continue without any liability and interference from JetSMART.
The purchase of Ultra Air will also be subject to the approval of the Colombian authorities, although they emphasize that there would be a positive impact on the market given that the two ultra low-cost carriers do not have overlapping routes (JetSMART only operates international flights to Colombia with its Chilean and Peruvian subsidiaries, while Ultra Air operates domestic flights).
«If the transaction takes place, it would guarantee more dynamic competition in the Colombian air market, whose reorganisation demands travel options with lower fares for all Colombians, which would result in an increase in connectivity with the consequent potential for tourism, which is one of the main objectives in the country’s business sphere,» concluded Jet SMART in a statement.
Ultra Air in trouble?
On Tuesday Ultra Air came out to deny a Colombian media report claiming that the ultra low-cost airline was going through a serious economic crisis that would force it to suspend its regular operations after Easter.
They stated that they have been capitalised with more than 20 million dollars and that they are going through a capitalisation process with national and international investors «who see a great opportunity in the Colombian market», which is now understood to refer to Indigo Partners.
Ultra Air in the Colombian market
Ultra Air inaugurated its scheduled flights in February 2022, and since then has transported more than 1.8 million passengers on more than 12,000 flights, reaching an 8% share of the Colombian market.
Its network reaches 10 cities in Colombia through 17 routes, where they claim that fares have been reduced by 13% on average since they started flying.
Ultra Air Routes
From Bogotá (BOG) to:
- Cali (CLO); 21 weekly flights.
- Cartagena (CTG); 13 flights weekly.
- Medellín/Rionegro (MDE); 36 weekly flights.
- Santa Marta (SMR); 15 weekly flights.
From Medellín (MDE) to:
- Barranquilla (BAQ); 3 weekly flights.
- Cali (CLO); 7 weekly flights.
- Cartagena (CTG); 11 weekly flights.
- Montería (MTR); 4 weekly flights.
From Cali (CLO) to:
- Cartagena (CTG); 3 weekly flights.
- San Andres (ADZ); 12 weekly flights. Santa Marta (SMR); 3 weekly flights.
From Pereira (PEI) to:
- Cartagena (CTG); 3 flights weekly, resumes 2 June.
During its first anniversary celebration, Ultra Air said that by 2023 it expects to take its fleet from six to ten Airbus A320s to carry 3 million passengers.
