GOL announced (09-Oct-2009) its global offering of 38 million preferred shares, including preferred shares in the form of American depositary shares (ADS), by the company and ASAS Investment Fund, the Company's controlling shareholder, has priced on 08-Oct-2009, raising USD347 million. [more]
GOL raises USD347 million from global share offering
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Avianca Brazil faces tough conditions and fierce competition on new international flights
Brazil’s fourth largest domestic airline, Avianca Brazil, has opted to branch out internationally with new service to Miami and Santiago, Chile, joining formidable competitors in each market that will compete fiercely with a new rival. Avianca Brazil’s competitors have significant strength in each market, with an ability to market vast network connections in conjunction with their partners.
Avianca Brazil’s decision to add international destinations occurs as its domestic growth continues unabated, despite warnings by its Brazilian rivals that overcapacity in the domestic market could threaten a slow recovery of yields that is just starting to take shape.
Avianca Brazil’s branching out into international markets occurs against the backdrop of a potential merger with Avianca Holdings. Each company is majority owned by Synergy Aerospace, but operates separately. After completing the evaluation of a potential merger with Avianca Brazil in 2014, Avianca is now reconsidering a potential tie up with the airline amid an ugly shareholder battle over Avianca’s pursuit of a strategic partnership with United.
LATAM and Avianca continue balance sheet clean up as shareholder strife clouds Avianca-United tie up
A two year economic downturn in Latin America has forced the region’s airlines to put even more emphasis on improving their balance sheets through improved leverage, debt reduction and decreasing capital commitments. Two of the region’s largest airline groups – LATAM Airlines Group and Avianca Holdings – have worked to strengthen their balance sheets employing a variety of methods, including renegotiating aircraft delivery schedules to defray capital costs.
Avianca Holdings is taking delivery of six aircraft in 2017, whereas LATAM’s total fleet is shrinking 5.5% year-on-year during 2017 as it slashes its capex commitments by USD2 billion during a two year period.
LATAM is enjoying a boost in its liquidity after receiving an equity infusion by Qatar Airlines in late 2016, and the investment by Qatar helped boost LATAM’s liquidity to trailing 12M revenues by 5.5ppt year-on-year at the end of 2016. Avianca has been searching for an equity provider and strategic partner since mid 2016; but its selection of United has stirred controversy between its two largest shareholders, with lawsuits and counter lawsuits overshadowing the potential commercial benefits of the tie up.