Changes are afoot in Colombia as Avianca-Viva merger hangs in the balance

During the past year Avianca and Viva have attempted to drive consolidation in the Colombian market - but have encountered headwinds after the government concluded that their plans would harm competition in Colombia's aviation sector.

Despite the fact that Colombia had one of the swiftest rebounds in traffic after the COVID-19 pandemic, the dramatic drop-off demand in the early days of the crisis propelled the country's largest airline, Avianca, into Chapter 11 bankruptcy protection.

In Apr-2022 Avianca outlined its plans to purchase its Colombian low cost rival Viva and keep the entities separate. Now those airlines have offered concessions to push the deal through, stressing that time could be running out for Viva, whose financial situation continues to deteriorate.

But it remains unknown whether they can convince the government to endorse their merger, and as those airlines await the fate of their tie-up, the fast growing airline group JetSMART group is working to spread its ultra-low cost wings to Colombia.