The leading investors at Avianca and GOAL Linhas Aéreas will create a new holding, called Abra Group Limited, under which these two airlines will be, plus Viva Colombia and Viva Peru. This holding will also have an investment in Chile’s Sky Airline. What does this mean for the Latin American airline industry? Let’s investigate further.
A new Latin American giant
On Thursday, Avianca and GOL announced they received a notice from their controlling shareholders stating they entered into a new master agreement to form a new holding called the Abra Group Limited. This holding will bring together Avianca, GOL, Viva Colombia, and Viva Peru, keeping their “Iconic brands under the same holding” but maintaining their independent brands, talent, teams, and culture.
Abra Group will also have a convertible debt representing a minority interest investment in Chile’s Sky Airline. In the past, there were rumors Avianca and Sky Airline could merge.
The creation of Abra Group, which is being called a “Leading air transportation group across Latin America,” is subject to customary regulatory approvals and closing conditions. The Group will be co-controlled by the principal shareholders of Avianca (including Kingsland International Group, Elliot International, and South Lake One, and by GOL majority shareholder, MOBI FIA.
Avianca has informed it will remain as part of the Star Alliance group.
Avianca and GOL shareholders will launch Abra Group Limited, a new holding which will own these two carriers, Viva Colombia, and Viva Peru. Photo: Getty Images.
Launching this holding would create a company similar to the International Airlines Group (IAG) in Europe (which owns British Airways, Iberia, Aer Lingus, Vueling, and Level but keeps them under separate brands).
Roberto Kriete, Abra Group’s Chairman, said,
“Our vision is to create an airline group that tackles 21st-century issues and improves air travel for our customers, employees, partners, and the communities in which we operate. Our customers will benefit from access to even better fares, more destinations, more frequent flights and seamless connections, and the ability to earn and use points across the brands’ loyalty programs. They will also be able to enjoy enhanced travel benefits and access to superior products and services. “
The launch of Abra Group is the latest consolidation movement in the region. Constantino de Oliveira Junior, Abra Group’s CEO, said,
“This agreement places Abra’s airlines in a position to lead air travel within the region – serving a population of over one billion and GDP of nearly three trillion US dollars – providing significant opportunities for capacity and revenue growth. Our unique enterprise structure will allow each airline to drive results by maintaining their independent brands, talent, teams, and culture and will provide employees more opportunities for personal and professional growth at every stage of their careers. “
What does this mean for the Latin American airline industry?
According to its management, the launch of Abra Group is expected to be complete in the second half of 2022. The holding will provide long-term stability and flexibility to the airlines, said Kriete in an investor’s call.
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This new holding will benefit customers through better fares, more connectivity, and GOL and Avianca’s loyalty programs, LifeMiles and SMILES.
Oliveira Junior said the formation of Abra Group will scale and put the group’s expertise to solve current problems, like sustainability and making air travel more accessible.
“Over the long term, Abra will aim to redefine sustainable aviation in the region, providing an attractive platform for innovation using the most advanced and clean technologies and fuel-efficient aircraft,” added Oliveira Junior.
What do you think about this latest consolidation movement in the Americas? Let us know in the comments below.
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