Unity is strength! Sky and Avianca beckon merger for the next few months, says website.

A news published by the website Aeroflap, which is specialized in aviation, states that the airlines Sky Airlines and Avianca have given the green light for their merger. The two companies, one Chilean and the other Colombian respectively, intend their unification to result in the largest low-cost operator in Latin America.

According to Diario Financiero de Chile, the decision to merge mainly pleased Sky. Due to the pandemic, the airline went into financial collapse, which forced its president, Holger Paulmann, to revise its plans, even if, for this, part of the company was sold to attract new investments.

As much as Sky has already announced that it was partially for sale, this position attracted the interest of several entrepreneurs and companies in the sector, including Gol Airlines. The Brazilian air company even held preliminary meetings, but negotiations did not advance.

However, Colombia's Avianca also suffered a lot from the pain of the COVID-19 pandemic, even starting the process of Chapter 11 of the US Bankruptcy Law. However, according to the company itself, it intends to exit this process at the end of 2021.

New directions

With the unification, it is intended that Avianca will have a 70% stake in Sky, in an agreement valued at US$ 1 billion. However, the continuity of this plan will depend, firstly, on the approval of the US court, which will assess the negotiation with creditors. It will also depend on approval by the Chilean and Colombian air regulators.

With the conclusion of the negotiations, Sky will become a Chilean-flag subsidiary of Avianca. Despite this, until the first moment, the company will keep its brand alive, like what happened when Gol bought VARIG Airlines in 2007.

According to the Aeroflap text, the new group has ambitious plans to expand routes within Latin America and the United States. Also, it has Brazil as a promising potential market, something that was already in Sky's plans since before the pandemic. It is no wonder that, for a while, the company operated routes that had as origin or destination the International Airport of São Paulo/Guarulhos – Governador André Franco Montoro (GRU Airport).