The potential collapse of the low-cost Colombian airline Viva could lead to higher fares and the loss of connections to some cities, Avianca’s chief executive said Thursday.
Avianca and Viva announced on Wednesday they had appealed to Colombia’s aviation regulator after it rejected their plan to merge, proposing steps to allay its concerns, such as yielding some routes to competitors.
In an April agreement to merge, the airlines envisaged retaining their respective brands and business strategies as the travel sector struggled with the COVID-19 pandemic.
Colombia’s aviation regulator objected to the merger, saying it poses risks to competition and the welfare of consumers.
«We believe it is essential for the country to save Viva and we believe we can do it in an economically reasonable way,» Avianca President Adrian Neuhauser said in a news conference.
Neuhauser said losing Viva, which has 20% of the market share in Colombia, 40 routes, a fleet of 23 aircraft and about 1,000 direct employees, would create a sector-wide crisis. As a result, ticket prices would rise and routes to some cities only served by Viva would be lost.
The aviation regulator has two months to resolve the appeal, although Neuhauser is confident a decision can be reached sooner…