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New group in South America: Avianca and Gol challenge Latam together

Colombian and Brazilian airlines are merging into a new group. Thus Avianca and Gol together become the challenger for Latam.

Remember the British-Spanish aviation group IAG, which includes British Airways, Iberia, Aer Lingus, Level and Vueling. In South America, Colombian Avianca and Brazilian Gol have announced that their major shareholders will join together to form the new Abra Group.

“Subject to customary regulatory approvals and closing conditions, Abra will take control of Avianca and Gol, merging their well-known brands into one group,” the airlines said. Through a recent agreement, Viva Air Colombia and Viva Air Peru have joined Avianca. Avianca also holds a minority stake in the Chilean airline Sky.

No airline mergers

In the Abra Group, however, airlines should not merge into one. “Airlines will keep their brands, talents, teams and culture independent, while benefiting from increased efficiencies and investments under common ownership.”

The chairman of Abra’s board of directors will be Roberto Kriete, currently chairman of Avianca’s largest minority shareholder, Kingsland Holdings. Constantino de Oliveira Júnior, former head and then president of Gol, will be the head of the group. Current Avianca CEO Adrian Neuhauser and Gol CFO Richard Lark will become co-chairs of the group in addition to their current positions.

Challenge for the Latam

The founding of Abra is a challenge for Latam. The largest airline in South America was born from the merger of the Chilean Lan and the Brazilian Tam.

It remains to be seen how the partners of Avianca and Gol from the US will react. Avianca works with United Airlines, both of which belong to the Star Alliance. Gol, on the other hand, collaborates with American Airlines, which is part of the Oneworld alliance. United also owns shares in Avianca, American in Gol.

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