Colombian airlines look to Middle East for international partners

Avianca and Avianca Brasil, both owned by the Efromovich brothers, are hunting for tie-ups overseas in what could provide foreign carriers with entry points into Peru, Costa Rica and Ecuador, among others.
Planes from the Colombian airline Avianca are at the Puente Aereo airport in Bogota, Colombia. the carrier and its sister Avianca Brasil are looking for partners. John Vizcaino / Reuters
Planes from the Colombian airline Avianca are at the Puente Aereo airport in Bogota, Colombia. the carrier and its sister Avianca Brasil are looking for partners. John Vizcaino / Reuters

Colombia’s Avianca Holdings and Avianca Brasil, the two airlines controlled by the Efromovich brothers, are seeking separate international partners, including in the Middle East, while maintaining a long-term goal of merging, Jose Efromovich said.

“We are under confidentiality agreements” and many companies have shown interest, said Mr Efromovich, the chairman of Avianca Brasil, in Sao Paulo. “We are looking for a partner anywhere in the world. In the Middle East, in Europe, in the United States, in the Americas. Everything is possible, but it needs to make sense.”

Etihad Airways and Avianca Brasil in June announced a codeshare partnership.

Under the agreement, Etihad will put its EY code on domestic flights operated by Avianca Brasil, while Avianca Brasil will put its O6 code on Etihad flights between Abu Dhabi and São Paulo.

This year, Delta Air Lines, United Continental and Copa Airlines made non-binding offers for a minority stake in Avianca Holdings, it was reported last week.

Avianca Holdings, with a market value of US$832 million, carried 61 per cent of Colombia’s more than 15 million passengers through July. The Bogota-based airline, whose chairman is German Efromovich, offers potential suitors a point of entry into markets that also include Peru, Costa Rica and Ecuador.

The Efromovich brothers continue to pursue a merger of the two Aviancas that would create a single airline that flies all over South America. A combination would provide Delta and United a way to make new inroads in Brazil against American Airlines, which has a partnership with Latam Airlines. Avianca Brasil controls about 11 per cent of the Brazilian market .

“It can happen in a month or it can happen in five years, but it is going to happen,” Jose Efromovich said. “It is normal, it is rational, this was the goal when all this was conceived.’’

A deal in Colombia is no guarantee of entry into Brazil.

“We are sceptical about a merger between Avianca Holdings and Avianca Brasil,” said the Bradesco BBI analyst Victor Mizusaki, adding attempts to merge the two companies were frustrated in the past due to the opposition of another controlling shareholder for the Colombia airline with a veto power.

business@thenational.ae

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Published: September 22, 2016 04:00 AM

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