A historic agreement has been reached between Colombian airline Avianca and Brazil's GOL whereby both companies will function under the same holding, thus increasing their mutual presence throughout Latin America, it was announced Wednesday.
It will be the largest airline group in the region. The closing of the deal is expected to be finalized by the second half of 2022, subject to regulatory conditions.
Shareholders of Avianca and the controlling shareholder GOL agreed to create the Abra Group Limited, which will have a dominant presence in the region and promises to offer better frequencies, fares, connections, and frequent flyer perks.
Following recent investments by Avianca and Viva shareholders, 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 loan convertible into an investment representing a minority interest in Chile's Sky Airline.
Despite the managerial agreement, each airline will keep its brand, styles, and human resources independently, while benefiting from greater efficiencies and investments within a common business.
Abra's financial strength will provide the participating airlines with long-term stability and agility, thus driving constant and sustained investment in innovation and synergies, it was explained.
The Abra Group will be co-controlled by Avianca's major shareholders and GOL's majority shareholder and will be led by a management team with extensive aviation experience in the region, a long track record of entrepreneurship, and a proven track record of success in airline growth and transformation, according to Wednesday's announcement.
Abra will continue to invest in a fleet of aircraft with a lower carbon footprint, which would accelerate the airline industry's progress toward its carbon-neutral goals.
Roberto Kriete, Chairman of the Group's Board of Directors, said, Our vision is to create an airline group capable of meeting the challenges of the 21st century and enhancing the flying experience for our customers, employees, partners, and the communities in which we operate. Our customers will benefit by having access to the best fares, more destinations, more flight frequencies, more convenient connections, and the ability to earn and use points through airline loyalty programs. In addition, they will be able to enjoy better benefits and access to superior products and services.