Avianca has abandoned a yearlong effort to purchase Colombian low-cost carrier Viva Air.
In a statement, Avianca CEO Adrian Neuauser said that the merger conditions laid out by regulator Colombia Aerocivil in a late April resolution were overly onerous.
"Unfortunately, the conditions of this resolution, which is already a firm decision, make it impossible to rescue Viva by making it not only unviable as an airline, but also, if the integration were to take place under the conditions imposed by Aerocivil, it would jeopardize Avianca's stability and Colombia's connectivity," Neuauser said.
Avianca first announced its intent to acquire Viva in April 2022. But Aerocivil rejected the proposed merger in November, citing market-concentration concerns.
Viva subsequently suspended operations in late February, while Avianca pursued remedies to achieve the merger.
In an April 26 announcement, Aerocivil laid out terms under which it would allow the merger to go through. Among other stipulations, the regulator said that Avianca would need to maintain Viva's low-cost operating model. Avianca was also to be required to turn over daily landing rights at El Dorado International Airport in Bogotá and to maintain capacity ceilings on routes with too much market concentration.
Avianca, in particular, said the stipulation regarding El Dorado was untenable. The carrier said that it was willing to turn over more than 75% of Viva's slots at El Dorado, which is Colombia's primary airport. But Aerocivil was to require the return of so many slots that Viva would not be able to efficiently base a single plane at El Dorado, Avianca said.
"This would make Viva economically unviable, and explicitly contradicts other conditions that require that Viva continue to provide connectivity on the historic routes where it was the only operator," Avianca said.
The carrier said that in lieu of acquiring Viva, it will seek to add aircraft to bolster regional connectivity in Colombia. The suspension of Viva service in February was followed a month later by the cessation of flying by Colombian low-cast carrier Ultra Air.
Avianca also said it would offer jobs to Viva employees.