Avianca has announced it is dropping its proposed merger with low-cost carrier Viva Air. The Colombian flagship airline said conditions set by the country's aviation regulator "would not allow Viva to be a financially and operationally viable airline."
 
In a statement, Avianca said the requirements set by regulators could also put its own stability at risk.
 
"Regretfully the conditions of this resolution, which is a firm decision, make the rescuing Viva impossible," Avianca CEO Adrian Neuhauser said in the statement. According to Avianca, the conditions allowed little "regulatory flexibility" to reactivate Viva's operations.
 
Viva Air was hard-hit by the pandemic and the resulting slowdown in travel in 2020. The carrier’s financial situation worsened in 2021 as jet fuel costs rose and Colombia’s peso fell in value.
 
The on-again-off-again merger with Avianca had been approved in April by regulators, after stopping the process stopped late last year and reopening it in January. However, before the merger talks could proceed, Viva suspended operations in February.

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The deal would also have required Avianca to assume routes, commitments and prices that "don't coincide with Viva's remaining capacity" after the carrier suspended its operations for two months.

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