South American carrier Viva Air has suspended operations after its takeover by interested buyers was blocked by regulators.
Viva – which was developed by Ryanair co-founder Declan Ryan – is an ultra-low cost airline in Colombia. It has a subsidiary airline in Peru, which has also been suspended. Larger Colombian low-cost airline Avianca has been trying to buy the financially-constrained airline.
Avianca’s plans to buy Viva have been in the public domain for nearly 12 months, but have been stymied by several delays by Aerocivil, Colombia’s civil aviation authority.
Aerocivil has since blocked the deal on competition grounds, claiming it would give Avianca a monopoly in Colombia.
Viva said in a statement: “This unprecedented decision by the entity will result in further delays in making a decision, for which Viva is forced to announced, unfortunately, the suspension of its operations with immediate effect”.
Viva said the decision by the regulators to block the deal “calls into question the future of the low cost air service in Colombia and jeopardises the jobs of more than 5,000 Colombians, who directly and indirectly depend on Viva.”
The airline has informed the Colombian government of its financial challenges and that the takeover is the only way it can survive.
Viva Air launched in 2012 and added Viva Air Peru five years later.