Avianca, GOL Shareholders Create Abra Group

[In The News]

DALLAS – The primary owners of Colombia’s Avianca (AV) and the controlling shareholder of Brazil’s GOL Linhas Aereas (G3) have signed a landmark agreement to form Abra Group Limited, a prominent air transportation group across Latin America.

The Abra Group will own AV and G3, bringing together their iconic brands under a single company. The union is subject to typical regulatory clearances and closing conditions.

The Group will also own a non-controlling 100% economic stake in Viva’s (FV) operations in Colombia and Peru, as well as convertible debt representing a minority equity investment in Chile’s Sky Airline (H2), thanks to recent investments made by AV and FV shareholders.

GOL Boeing 737-800 PR-GUN. Photo: Joao Pedro Santoro/Airways

Abra Group Goals

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Avianca and GOL will form a pan-Latin American airline network with the lowest unit cost in their respective regions, the region’s best loyalty programs, and other synergistic businesses. As per the official announcement, AV and G4 will keep their separate brands, talent, teams, and cultures while benefiting from increased efficiencies and investments under one aligned ownership.

Abra will provide a platform for the operational airlines to further reduce costs, gain greater economies of scale, maintain a cutting-edge aircraft fleet, and expand their routes, services, product offerings, and loyalty programs.

In aggregate, the airlines owned by the Abra Group will provide clients with the most comprehensive network of complimentary flights, with low overlap, across respective markets.

Abra will also ensure that its operating airlines are ESG market leaders by offering greater governance as well as the financial strength to continue investing in a lower carbon footprint fleet, accelerating the airline industry’s path to attaining carbon neutrality ambitions.

Viva Air Colombia HK-5352 Airbus A320Neo. Photo: Arturo La Roche/Airways

Abra Group Management

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Abra Group will be co-controlled by AV’s key shareholders and G3’s majority shareholders and will be led by management with extensive airline experience in the region, a long history of entrepreneurship, and a proven track record of growth and successful airline reforms.

• Roberto Kriete, who will serve as the group’s Chairman, grew TACA in the 1980s into the leading Central American airline before merging it with Colombia’s Avianca Airlines in 2009. He also founded the leading Mexican carrier Volaris in 2006.
• Constantino de Oliveira Junior, who will serve as the group’s CEO, pioneered Latin America’s low-cost carrier revolution when he founded GOL Airlines in 2001. Together with the acquisition of VRG in 2007 and Webjet in 2011, he led the company’s growth to a market-leading position.
• Adrian Neuhauser, current President and CEO of Avianca, and Richard Lark, current CFO of GOL, will serve as the group’s Co-Presidents, in addition to maintaining their current roles at the airlines; further details on the Abra management team will be provided at closing.

The management of Abra Group says they will concentrate on achieving synergies to ensure the lowest cost structure in each carrier’s relevant market; expanding routes, services, product offerings, and loyalty programs.

They also plan to develop “innovative new products and services that will meet the evolving needs of passengers and air cargo customers in the highly competitive Latin American air transportation market and beyond.”

One of many Airbus A319s operated by Sky Airline in the new livery. Photo: Sky KoreSCL – Own work, CC BY-SA 4.0

Comments from Abra Group Officials

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Roberto Kriete, Abra Group’s Chairman, said, “Our vision is to create an airline group that tackles 21st-century issues and improves air travel for our customers, employees, and partners as well as the communities in which we operate.” 

The Chairman added that Abra customers “will benefit from access to even better fares, more destinations, more frequent flights and seamless connections, and the ability to earn and use points across the brands’ loyalty programs. They will also be able to enjoy enhanced travel benefits and access to superior products and services.”

Constantino de Oliveira Junior, Abra Group’s CEO, said, “This agreement places Abra’s airlines in a position to lead air travel within the region – serving a population of over one billion and GDP of nearly three trillion US dollars – providing significant opportunities for capacity and revenue growth.”

The CEO added, “Our unique enterprise structure will allow each airline to drive results by maintaining their independent brands, talent, teams, and culture and will provide employees more opportunities for personal and professional growth at every stage of their careers.”

What do you think of this new airline group? Do you think it give the LATAM Group a run for its money and become the leading air transportation group across Latin America? Be sure to leave your comments on our Social media channels.

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Featured image: Avianca N797AV Boeing 787-9 Dreamliner. Nick Sheeder/Airways

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