Colombia’s Avianca, Brazil’s GOL team up in Latin America consolidation drive
Days after announcing plans to merge with Viva, Colombia’s Avianca (AVHOQ) has set out another deal with Brazil’s GOL to create a new Latin American aviation group.
The main shareholders of Avianca (AVHOQ) and GOL have agreed to create a leading air transportation group under a holding company structure named Abra Group Limited, they said in a joint statement on May 11, 2022.
UK-incorporated Abra Group will control Avianca (AVHOQ) and GOL and bring together all of their airline brands under one roof. The Group will also control Viva’s operations in Colombia and Peru and own convertible debt representing a minority stake in Chile’s Sky Airline. Under Abra, the airlines will maintain their own brands and operate independently but benefit from greater efficiencies that come with common ownership.
The aim is to “anchor a pan-Latin American network of airlines that will have the lowest unit cost in their respective markets, the leading loyalty programs across the region, and other synergistic businesses,” according to the companies’ statements.
Avianca (AVHOQ) announced on May 2, 2022 plans to merge with local low-cost carrier Viva to strengthen their operations as they emerge from the COVID-19 pandemic.
Roberto Kriete, founder of Mexican carrier Volaris and who merged TACA with Avianca (AVHOQ) in 2009, will become chairman of Abra. Constantino de Oliveira Junior, founder of GOL airlines, will serve as the group's CEO, while Adrian Neuhauser, current CEO of Avianca (AVHOQ), and Richard Lark, current CFO of GOL, will serve as the group's co-presidents.
"Our vision is to create an airline group that tackles 21st century issues and improves air travel for our customers, employees, and partners as well as the communities in which we operate,” Kriete commented. “Our customers will benefit from access to even better fares, more destinations, more frequent flights and seamless connections, and the ability to earn and use points across the brands' loyalty programs.”
The pandemic has led to a flurry of merger activity in the Americas. Along with the latest news out of Latin America, there is also a battle for control of Spirit Airlines (S64) (SAVE). After announcing plans to merge with Frontier, JetBlue (JBLU) proposed a counteroffer, but Spirit has since confirmed it plans to proceed with the Frontier proposal.
Avianca (AVHOQ) and GOL expect the deal to close in the second half of 2022, subject to regulatory approval.
Updates on May 12, 2022 to add that the airlines will maintain their own brands and operate independently
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