Viva Air plans to introduce a third low-cost airline in Latin America

Viva Air, the group of airlines in Latin America owned by the founder of the Irish Ryanair Holdings Plc, plans to introduce the third airline in the region and carry out an initial public offer to take advantage of the strong demand for cheap airfares.

The money will help finance the pending deliveries of the airline's 50 new Airbus SE 320 aircraft.
The money will help finance the pending deliveries of the airline's 50 new Airbus SE 320 aircraft.

The company wants to sell shares in New York within two years, Viva's largest shareholder Declan Ryan said in an interview in Lima. The shares could also be quoted in another market, such as Colombia.

"For all intents and purposes we are the Ryanair of Latin America," said Ryan, who was one of the founders of the low-cost Irish airline. "The middle class in Latin America moves every day, Colombia has a large middle class, so we see many more passengers on our planes."

Low-cost airlines are transforming the transportation industry in Latin America by attracting travelers who previously opted for long bus trips while forcing older airlines to reduce prices. Viva has become the third largest operator in Colombia, where it began seven years ago, and the number two operator in Peru, where Viva Air Peru began operations in 2017.

The company is considering Ecuador or Central America as the basis for the third airline. Anticipating the IPO, Ryan's Irelandia Aviation said it had sold a $ 50 million stake in Viva Air to Cartesian Capital Group, a New York-based private equity firm. The money will help finance the pending deliveries of the airline's 50 new Airbus SE 320 aircraft. 

"Now that we have the capital base, we can focus on going public," Ryan said. "Airlines must quote on the stock exchange to access capital."

At least 100 million dollars of Viva Air's capital will go to the IPO and that he expects the public offering to value the company, based near Medellin, Colombia, in more than 500 million dollars.

Low-cost airlines Sky Airline and JetSmart have also grown to neighboring countries this year. Cartesian previously invested in Flybondi of Argentina along with the former Ryanair operations director, Michael Cawley.

Colombia and Peru will probably obtain 20 of the new jets, respectively, and the rest will be assigned to the new base. In Central America, the company favors Costa Rica and El Salvador. Venezuela represents a "great opportunity" when it overcomes its current crisis.

Ryan anticipates that Viva Air will operate up to 100 aircraft in the region within ten years.

by Agency

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