When there’s blood on the streets, buy property. Or a competitor.

Amid many uncertainties, the COVID-19 pandemic made one thing clear: there is no perfect recovery scenario for any carrier globally. However, those already facing challenges before the travel restrictions are now fighting an even steeper uphill battle. Thus, the old adage still rings true.

Avianca is a latecomer to the consolidation wave and is now setting the stage for integration with Brazilian GOL under Abra Group, a holding company that will be based in the United Kingdom once all required approvals are obtained. The carrier has just exited a painful Chapter 11 process that restructured its debt, providing liquidity close to $1 billion after raising $1.7 billion in capital.

Like most successful Chapter 11 recoveries – and Avianca has more than one of these to share – the company claims that the process made it more efficient, financially stronger, and highly competitive. With plans to double its fleet and route network, along with a hybrid product that blends «the best attributes of the low-cost model» with the «key differentiators» of its «traditional offering,» it remains to be seen how these ambitious plans will unfold. It’s like those toxic relationships that keep giving it another chance, hoping that this time it will work. At least they’re trying to change.

Viva Air Colombia’s fairy tale took an unexpected turn last April when Avianca made an offer the low-cost carrier simply couldn’t refuse: to take financial and operational control of its Colombian and Peruvian subsidiaries, pending regulatory approvals.

Avianca Group International Limited, based in the United Kingdom (distinct from Avianca Holdings, which was headquartered in Panama and liquidated following its previous Chapter 11 process), injected significant capital into Viva and created a complex structure to avoid confusion among competition regulators: this is not a merger with Viva.

However, regulators rejected the proposal, ruling that it would create a monopoly in the Colombian market and eliminate competition on certain routes. A Viva-Avianca integration transported nearly 15 million passengers in 2021, in a market that totaled 24 million.

Avianca appealed the decision and proposed a significant divestment in Bogota, its main domestic hub, but that may not be enough for Aerocivil to change its mind. Besides, there’s another factor that is even more pressing: time. Richard Galindo, Avianca’s Chief Legal Officer, was crystal clear when he said that if the Colombian authority doesn’t resolve the appeal in record time, it could be too late for Viva.

But what is Avianca buying when entering Viva? Despite its exponential growth in Colombia’s domestic market and its international expansion, the low-cost carrier has been struggling financially and has reduced its presence in Peru, a subsidiary that suffered from tight travel restrictions and the arrival of SKY and JetSMART, competing to fill the void Avianca left when it suspended its operations.

Now in a complex economic scenario that includes inflation, rising costs, and a worsening exchange rate as the Colombian Peso deprecates, Viva has entered the final stages of its survival mode. But the future doesn’t look good. And that’s without considering that JetSMART has just been given authorization to open a subsidiary. So, what’s so valuable in what’s left of Viva for Avianca to want it so badly?

It is undoubtedly true that the no-frills model that Viva pushed down Colombia’s aviation market throat forced Avianca to make significant changes in its own offer, facing substantial resistance from its customer base. The backlash to the new fare tiers, ancillary offerings, and even catering and seat reconfiguration has been fierce and made more than a dent in the one-hundred-year-old brand. For any other operator, cutting costs is a smart move. For Avianca, it meant cheapening. There’s a difference.

At first glance, one might think that by integrating Viva, Avianca acquires the low-cost business model that it has struggled to implement. But, in a way, integrating Viva while keeping its brand is the simplest way to embrace the one thing they crave: a true hybrid offer that protects Avianca’s name and reputation. A «guilt-free low-costing» strategy, if there’s such a term.

The real question is how much Avianca is willing to pay for that advantage. Is renouncing more than a hundred slots in Bogota just when a deep-pocket competitor – and with a business model that already hurt Avianca – is arriving to the market a good strategy? It is certainly better than letting Viva fail and trying to conquer its 20 percent market share without the proper tools. But there’s no easy win for Avianca here. Whether it gets what it wants, or if it does not, there’s no guarantee.

Remember that Carl Lewis’ Pirelli ad? Adrian Neuhauser said it a couple of days ago: it would take months or even years to gain Viva’s share. But if Viva goes bust and that race is on, Avianca will be forced to run with stilettos.