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Viva Air Colombia Cancels Several Routes as It Faces Financial Struggles

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The airline canceled routes from Cali International Airport.

On Friday, the Colombian ultra-low-cost carrier Viva Colombia announced it would temporarily close three direct routes from Cali International Airport (CLO). The airline cited a complex reality it is facing, including external macroeconomic factors, the lack of an expected investment on behalf of an investor, and the not-yet-approved merger with Avianca.

Viva is canceling three routes

Yesterday, Viva Colombia released a statement announcing the cancelation of three direct routes departing from Cali International. These routes went to Cartagena International (CTG), Santa Marta International (SMR), and San Andrés International (ADZ). The low-cost carrier said, “The decrease in our offer of 17 flights per week from Cali to the beach destinations in Colombia is due to the complex macroeconomic conditions that are impacting the air industry and Viva, especially who, by not having an investor financially backing it, can’t bear the over costs caused by exchange rates, inflation, and fuel prices.”

Viva has been in a complex financial position since last year. This led the airline to return some leased aircraft to the leasing company, not launch more routes after an international boom in 2021, and look to merge with Avianca.

Viva will keep its connectivity to other destinations from Cali, though. The airline said it will keep flying 18 times a week to Medellín International (MDE) and 11 times a week to Bogota International (BOG).

What’s going on at Viva?

During the COVID-19 pandemic, Viva was one of the fastest-growing airlines globally. The Medellín-based company began opening many routes both domestically and internationally. In June 2022, Viva offered 981 flights per week and 176,580 seats, an 80.7% increase compared to the same period in June 2019. In that same span, Viva opened 35 routes.

Nonetheless, that impressive growth –fueled without economic assistance– has now stopped. For months, the airline has been publicly saying it is in a bad financial position. Viva blames the complex financial landscape in a post-COVID environment. Viva does not make its financial results public, so there’s no real way to know the full extent of the airline’s crisis.

To address its dire financial position, Viva and Avianca announced in 2022 they would merge under one holding. Viva would remain an independent brand, but they would be under the same umbrella. Moreover, if the merger were approved, Viva would also be a part of the Abra Group, a holding created by Avianca and GOL to create a “leading inter-American air transportation group.”

The approval of the Abra Group has advanced without many issues. Nevertheless, Avianca and Viva’s merger has faced tighter scrutiny. The former Colombian government rejected their partnership, citing a risk to the competition and well-being of the consumers.

Both companies filed a second merger attempt, introducing new solutions to ease the government’s worries. Last month, the new Colombian government announced it had reviewed the first rejection of the merger and decided to annul it after finding “procedural irregularities.” The government is reviewing the proposal a second time and has not announced a final decision. Both airlines urged the Colombian authorities to accelerate the review, citing Viva’s financial troubles.

Between January and November 2022, Viva Colombia carried 6.57 million passengers, increasing by 50% of its pre-pandemic traffic levels. Viva was the third largest carrier in the country behind Avianca (over 14 million passengers until November) and LATAM Colombia (over 7.6 million passengers). ( https://simpleflying.com/viva-colombia-cancels-several-routes-financial-struggles/)

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