The temporary suspension of Viva airline operations in Colombia highlighted the difficulty of air transport recovery following the impact of the pandemic and the importance of this sector for the connectivity of Colombians.
This paralysis affected more than 460,000 users who bought tickets and made reservations with Viva Air for domestic and international flights.
In this case, Viva had operations in 19 airports in the country at the time of the shutdown, which had already been reduced days before with the departure of 5 aircraft due to financial difficulties.
On the Caribbean coast, Santa Marta, Cartagena and Barranquilla were the hardest hit capitals, as was San Andrés. Travelers have been accommodated under an emergency plan drawn up by the authorities and the airlines.
This situation is getting worse as Viva operates routes that are not served by third parties, which has a negative effect on the market and especially on consumers, as it leads to a reduction in the offer of routes and frequencies.
There are five major players that have the largest participation in the national aviation market, led by Avianca with 35.5%; It is followed by Latam, with 19.1%; Viva Air at 15.7%; Wingo with 4.4%; Cup at 4.2% and others at 21.1%.
Precisely because of the composition of the market, competitors were not positive about the integration of Avianca and Viva.
When Civil Aeronautics issued its initial statement objecting to the integration, which was later overturned, it assured that it “posed risks to industry competition and consumer welfare.”
In addition, he said the integration would strengthen market power in favor of the group that Avianca, Viva Air and Viva Peru would form, as they participate in 59 national routes, mobilizing 93.7% of the country’s domestic traffic. Of these, they coincidentally participate in 29 national ‘tours’.
This economic group would thus retain 100% of the participation in 16 national routes.
Aerocivil assured that consumers could be harmed as this group would have more facilities, incentives and fewer risks by, among other things, raising prices, reducing frequencies, canceling routes or reducing additional services.
Source: El heraldo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
