Brazilian carrier GOL Linhas Aereas and Colombia’s Avianca are planning to combine their operations to create one of the largest airline groups in Latin America, with a network spanning two dozen countries.
The carriers will come together under one UK-based holding company named Abra Group that will be jointly controlled by Avianca and GOL’s main shareholders. The entity will also include Viva following Avianca’s deal to buy the Colombian ULCC in April, as well as having a minority stake in Chile’s Sky Airline.
The move comes after Avianca emerged from Chapter 11 bankruptcy protection in late 2021 after restructuring its business model to compete more effectively against low-cost operators. In March, it also ordered 88 Airbus A320neos with purchase options for 50 additional aircraft.
Based on current schedules filed with OAG, Abra would be roughly the same size as Chile’s LATAM Airlines Group in terms of scheduled weekly seats with about 1.4 million each.
In Brazil, the group would control about 28% of the market, behind Azul Airlines on 34% and LATAM on 32%. Abra’s capacity share in Colombia would be around 62%, with LATAM on 23%.
Overall, the combined entity would connect 288 airport pairs across Latin America, of which approximately two-thirds are domestic. OAG data shows there is currently no overlap between Avianca and GOL, while Avianca and Viva compete directly on about 31 routes.
Roberto Kriete, an Avianca board member, will serve as Abra’s chairman, while GOL founder Constantino de Oliveira Junior will be the group's CEO. Kriete said that the airlines would retain their respective brands and be able to expand operations into new markets.
“Abra will provide a platform for the operating airlines to further reduce costs, achieve greater economies of scale, continue to operate a state-of-the-art fleet of aircraft and expand their routes, services and product offerings and loyalty programmes,” Kriete said on a May 11 conference call.
“Through this partnership, Avianca and GOL will each be able to expand operations into markets where they are not active today. The new group will enhance the airline’s presence in international long haul and cargo markets in the Americas.”
He added that the scale and diversified market presence of Abra would enable the carriers to better compete with “large legacy carriers and global carriers active in our region.”
Avianca is a member of the Star Alliance, while GOL is unaligned. However, oneworld member American Airlines has a 5.2% stake in the Brazilian carrier and the two airlines are working to deepen their partnership.
The closing of the Abra deal is expected to be completed in the second half of 2022, subject to customary closing and regulatory conditions.
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