The post-pandemic brings profound changes to aviation in the Americas

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The post-pandemic brings profound changes to aviation in the Americas
Source: Twitter @IATA
May 11, 2022

As the weeks go by, purchases and mergers are announced to dominate a market in full recovery

On April 29, it was published that Viva would become part of the same holding company as Avianca Group International Limited, shocking news due to the effects it has on a continental level. The decision to unify the economic rights of both groups is made after the greatest crisis in the history of the airline industry -generated by Covid-19- that forced airlines to adapt to new ways of flying and strengthen their operations to face future challenges. Under this scenario, countries around the world have seen the need to create solid and sustainable airline companies that guarantee and strengthen national and international air connectivity and, at the same time, generate value for the consumer.
Although the news itself was already very relevant, it was also predictable that it would not be the last announcement of its kind. Well, today we start the day receiving a statement confirming that the main shareholders of Avianca and the controlling shareholder of GOL will create the Abra Group. The objective is clear, they seek to create the leading air transport group in Latin America.
Through the recent investments made by the shareholders of Avianca and Viva, the Group would also have 100% of the economic rights of Viva's operations in Colombia and Peru, but would not control it, and would have a credit convertible into an investment. representative of a minority interest in the airline Sky Airline de Chile.
Together, Avianca and GOL will be the anchor of a network of Latin American airlines that will have the lowest unit costs in their respective markets, the leading loyalty programs throughout the region, and other complementary businesses. Avianca and GOL will maintain their brands, talent, teams and culture independently, while benefiting from greater efficiencies and investments within common ownership.
Abra will provide a platform that will allow operating airlines to further reduce costs, achieve greater economies of scale, continue to operate a fleet of state-of-the-art aircraft and expand their routes, services, product offerings and loyalty programs.
Together, the airlines that will become part of the Abra Group could offer their customers the widest and most complementary network of routes with minimal overlap between markets.
Abra's financial strength will provide participating airlines with long-term stability and agility, thus driving constant and sustained investment in innovation and synergies.
The Abra Group will be co-controlled by the main shareholders of Avianca and the majority shareholder of GOL, and will be led by a management team with extensive experience in aviation in the region, a long history of entrepreneurship and a proven record of success in growing and airline transformation.

Roberto Kriete, who will serve as Chairman of the Group's Board of Directors, was the one who made TACA the leading airline in Central America in the 1980s, before merging with Avianca in 2009. He also founded, in 2006 , Volaris, the leading airline in the Mexican market.
Constantino de Oliveira Junior, who will serve as the Group's CEO, pioneered the low-cost airline revolution in Latin America when he founded GOL Airlines in 2001. Along with the acquisition of VRG in 2007 and Webjet in 2011, he led the growth of the company until reaching a leadership position in the market.
Adrian Neuhauser, current President and CEO of Avianca, and Richard Lark, current CFO of GOL, will serve as co-presidents of the Group and will maintain their current positions in the airlines. Further details on Abra's management team will be released upon closing of the deal.

Roberto Kriete, Chairman of the Group's Board of Directors, stated: "Our vision is to create a group of airlines capable of facing the challenges of the 21st century and that improves the flying experience for our customers, employees, allies and communities where we operate. Our customers will benefit from having access to better fares, more destinations, more flight frequencies, more convenient connections, and the ability to earn and use points through airline loyalty programs, as well as enjoy better benefits. and access to superior products and services.

Constantino de Oliveira Junior, CEO of the Group, mentioned that: "This agreement places Abra airlines in a leadership position in the air transport market in the region, being able to serve a population of more than one billion people and a GDP close to US$3 trillion - generating capacity and revenue growth opportunities Our particular and unique company structure will allow each airline to pursue its results while maintaining the independence of its brands, talent, team and culture; and , will provide employees with more opportunities for personal and professional growth at every stage of their careers."

Naturally, new announcements are expected in a market that will not sit idly by. We will have to be very attentive to the next few days.


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