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Turbulence in the Colombian air market for Easter

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Turbulence in the Colombian air market for Easter

Uncertainty has gripped the aviation sector between a fluctuation of administrative processes and financial difficulties, which has resulted in the continuity of Live and Ultra Aircompanies low cost hanging by a thread on the eve of Easter, one of the seasons with the greatest demand.

A situation that, for users, will affect a representative part of the market because Viva, that has been paralyzed for almost a monthand Ultra Air, whose difficulties led it to stop the sale of tickets until April, represented 28% of the passengers transported in January, according to data from the Civil Aeronautics.

(Mintransporte proposes to reduce VAT on air tickets from 19% to 5%).

But also, the offer of these two companies, which exceeded 940,000 seats in January for domestic flightsequivalent to 25.5% of the total market in the first month of the year, will have a strong impact that could lead to higher prices or greater demand for ground transportation services.

According to the latest report from the Civil Aeronautics, Viva had 19.5% of the existing seat supply in January (last recorded ‘high season’) and Ultra 6.5%. Even in the case of Viva, its international offer, which in January was 132,863 seats (6.5% of the total), will not be available either despite the conditional authorization to integrate with Avianca.

(Avianca warns that Viva Air no longer has the same operational capacity).

And it is that this option no longer seems to be as attractive as before for the red airline, because at first the companies proposed to give up up to 155 of their slots at the El Dorado airport (the allocation of landing and takeoff times that are provided to the airlines).

However, market sources say the decision affected only Viva, that it would have to release 70% of its slots and not the 50% offered, which leaves it with very little access to the country’s main terminal.

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However, while this would be a blow to the integrated airlines, according to industry expertsAvianca would have the possibility of not being ‘affected’, because its slots were not reduced.

Sources even say that this company continues with the same historical slots, despite the fact that its fleet is already It is not 187 planes but about 120 aircraft.

(JetSmart would start with an 8% fee if it buys Ultra Air).

In addition, added to the fact that Viva has lost financial strength, Avianca is considering, after almost eight months of request to the air authority, whether it is a good business to join or not.

Avianca evaluates the possibility of delivering its slots, because Viva’s are basically lost and they would have to deliver part of theirs, they see if it is favorable or not”, he explains about it Claudia Vásquez, aeronautical consultant.

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With all this panorama, according to sources in the sector, Viva continues to run out of fuel, and a delay in confirming the authorization from Aerocivil could take it off the market, which would harm buyers.

On the Ultra Air side, yesterday it stopped selling tickets on its website for the remainder of March and April. The basic reason is the same as Viva: lack of liquidity and very high operating costs.

(What you would stop receiving on flights if you want cheaper tickets).

However, Industry experts say that unlike Viva, the orange airline seeks to avoid difficulties in providing its service. It is worth remembering that Viva ceased its operations on April 27 without prior notice and sold tickets until that day until 8:00 p.m.

And he warns that this turbulent scenario represents a tough decision for the Government, which has always sought to “avoid market concentration” and “democratize access to public air service”Therefore, you must be careful in allocating the slots that could become free, since the big players would be the only ones with the financial muscle to take them and meet the demand.

If low-cost companies do not follow, other airlines with the ability to bring planes quickly could take advantage. An example of this is Latam, which announced the addition of five aircraft to its local fleet.

PAULA GALEANO BALAGUERA
Journalist Portfolio

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