A turbulent week at Viva Air Columbia: the airline’s CEO resigned days after announcing fleet cuts following entering a debt restructuring process. The Colombian low-cost carrier is battling financial difficulties while it eagerly awaits a local authority’s decision regarding its proposed merger with Avianca.
On February 21, 2023, Viva Air Colombia said it was cutting its aircraft fleet by five planes because of the financial issues that it is facing. The airline, which operates an all-A320 fleet, is downsizing to 16 Airbus planes. Two aircraft, registered as HK-5307 and HK-5327, both just over 3 years old, have already been sent to storage, Planespotters.net data shows.
Days later, the low-cost carrier’s chief executive Felix Antelo abruptly quit, citing health concerns as the main reason for the resignation in an internal letter to employees. Antelo was appointed Viva Air Colombia CEO in 2018 and is replaced by Francisco Lalinde as interim president and chief executive, the company confirmed on February 24, 2023.
Earlier in the same month, on February 10, 2023, the company initiated a Business Recovery Process (Proceso de Recuperación Empresarial, PRE). The process should allow the ailing carrier to restructure its debts by negotiating with main creditors. The airline hoped it would allow it to stay afloat while it awaits the much-needed decision from the Civil Aviation Authority of Colombia (UAEAC) regarding its proposed merger with Avianca.
Viva Air and Avianca, a Colombia-based full-service carrier, announced their intentions to merge in April 2022. Under the proposed agreement, Viva Air would hand over 100% of its economic rights in Colombia and Peru to Avianca.
In November 2022, the UAEAC objected to the merger, citing competition and consumer well-being concerns. The airlines appealed the decision and in January 2023, the authority re-started the merger review process.
In February 2023, two more airlines announced intentions to take over the struggling Colombian low-cost carrier. First, on February 7, JetSmart airlines, a Chilean ultra-low-cost carrier backed by US investment fund Indigo Partners, said it was interested in making an offer for 100% Viva Air and its subsidiaries’ shares. On February 20, LATAM Airlines Colombia, a subsidiary of Chile-based LATAM Airlines Group, also expressed interest in Viva Air.