Low-cost airline JetSMART has filed an appeal against the conditions imposed by Colombia’s civil aviation authority, Aerocivil, on the integration between Avianca and Viva Air, arguing that they are not enough to ensure fair competition in the market.
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According to JetSMART CEO Estuardo Ortiz, assigning take-off and landing slots at Bogota’s El Dorado airport is equivalent to assigning market shares. He insisted that Aerocivil should regulate the slot reassignment process to prevent inefficiencies and called for Viva Air to return all the slots it had before it ceased operations.
“Without prejudice to sharing the position adopted by the Aerocivil, inasmuch as the entity set conditions to the transaction, JetSMART filed the appeal in question, on the understanding that such conditions do not fully mitigate the damages that the integration of Avianca and Viva Air may entail for the market and especially for the new entrant operators,” said the company in a statement.
JetSMART’s appeal follows a similar move by LATAM, which also expressed dissatisfaction with the conditions. LATAM argued that the slots’ allocation needs to be defined more clearly to avoid the negative effects of the integration, such as reducing competition.
As per El Espectador, the appeals are set to be reviewed in a second instance, and if accepted, the conditions would be amended. The integration between Avianca and Viva Air, which began eight months ago, has faced increasing difficulties as Viva Air has suffered financial losses, ultimately ceasing operations on February 27th, 2023.
Avianca has reaccommodated over 100,000 Viva and Ultra Air passengers, corresponding to 86% of the total number of affected passengers, according to a statement by the airline.
The decision regarding the integration is critical as Colombia’s air market is facing a crisis due to the loss of Viva Air and Ultra Air operations. The authorities must consider the interests of the industry and passengers to maintain fair competition, said industry experts.
Aerocivil had imposed several conditions to ensure a low-cost model for Viva Air’s operations and respect the rights of its passengers, including the refund of cancelled flights and the guarantee that outstanding ticket holders can still fly.
The conditions also included the return of slots that could lead to market concentration and limiting the fares on routes where Avianca and Viva Air hold 100% of the market share.
