Aiming to become the largest low-cost operator in Latin America, the Colombian Avianca and Sky Airline gave the green light for the merger between the airlines.
According to the portal Chile Financial Diary, the decision mainly pleased Sky Airline, as the financial collapse as a result of the coronavirus pandemic made the company's President, Holger Paulmann, revise the airline's plans, even if for that, part of the airline was sold to attract new investments.
Although Sky Airline had already announced that it was partially for sale, this position attracted the interest of many businessmen and airlines in the sector, including GOL Linhas Aéreas, which even held preliminary meetings, but the negotiation did not advance.
However, Colombian Avianca also suffered huge losses during the pandemic, even filing the Chapter 11 process of the United States bankruptcy law during the height of the aviation crisis in the pandemic in May of last year. But according to Avianca itself, the company plans to exit the Chapter 11 process by the end of 2021.
New directions
With the progress of the negotiation, the expectation is that Avianca will have a 70% stake in Sky Airline, an agreement that is valued at US $1 billion, but this will depend first on the North American justice that will evaluate the negotiation plan in front of creditors, which should be concluded in the next few weeks, in addition to the approval of regular airlines and competitors in Chile and Colombia.
With this, Sky Airline will become a Chilean-flagged subsidiary of Avianca, but will keep its brand alive until the very first moment.
The new Group has ambitious plans to expand routes within Latin America and the United States, and has Brazil as a promising potential market, something that was already in Sky's plans before the pandemic.
