After it became known this Monday morning that the Superintendence of Industry and Commerce (SIC) of Colombia issued a statement of charges against Avianca, Viva and Viva Peru accusing them of an alleged business integration without the approval of the Aerocivil, Avianca responded that both companies are not integrated and that everything responds to a strategy of competing airlines whose purpose is to “hinder the outcome of this operation and take Viva out of the market”.
“Avianca complies and has complied with all applicable integration control regulations” and “the transaction on Viva’s economic rights did not constitute an integration. Avianca and Viva continue to be fully independent airlines, which compete vigorously in the market for the benefit of users”, Avianca stated in a press release, pointing out as “erroneous and inaccurate” the arguments used by the SIC and which were promoted by competing airlines.
“Likewise, Avianca has taken into account the concerns expressed by the Aerocivil by presenting a broad, detailed and, above all, innovative offer of conditions. Pending the Aerocivil’s definition, each company has maintained and continues to maintain full independence”, the company continued, arguing that all its actions are “fully supported by the applicable regulations, precedents on the matter and the rules issued by the SIC itself to support the separation of businesses, which clearly indicate that the only relevant criterion for assessing the independence of the parties is the absence of control and full independence”.
In this sense, they emphasized that Avianca and Viva “have never stopped competing and continue to compete vigorously, as they have done historically” and that “Avianca completely lacks influence or control over Viva, and contrary to what is stated in the fragments of the resolution of the SIC to which the company has had access, the figures show the strong competition between the two airlines”.
They point out as proof of this that other low cost airlines have been gaining a sustained share in the domestic market, and that in Colombia “the aviation market is one of the most competitive in the world, with 30 airlines operating in the country, 10 of them flying domestic routes”.
The SIC had stated that “the acquisition of the economic rights of Viva Air and Viva Peru by Investment Vehicle 1 Limited, controlling company of Avianca, would have been sufficient to constitute a business integration or at least the beginning of the execution of the business integration between the airlines mentioned. However, the operation in question was neither informed nor authorized prior to its execution by the competent authority. Therefore, Avianca, Viva Air and Viva Perú would have allegedly incurred in restrictive practices of free competition and could be sanctioned with up to 100,000 minimum legal salaries in force, or up to 20 percent of their operating revenues or up to 20 percent of their equity, as provided in Article 67 of Law 2195 of 2022”.
