This increase has been observed over the last months of 2024 and the first weeks of 2025. In total, 61 cases of yellow fever were confirmed in 2024, with 30 resulting in death. This number exceeds the 58 reported cases of yellow fever, including 28 deaths, between 2022 and 2023 in Bolivia, Brazil, Colombia, and Peru. In January of this year, 17 additional cases were reported, with seven deaths.

While in 2024, cases were mainly concentrated in the Amazon region of Bolivia, Brazil, Colombia, Guyana, and Peru, in 2025, the disease has begun to spread to areas outside this zone, particularly to the state of São Paulo, Brazil, and the department of Tolima, Colombia. Peru has also reported a fatal case. PAHO warns that other countries could also be affected.

Yellow fever is a serious viral disease that can be fatal, especially in its more severe form. This increase in cases highlights the urgent need to intensify efforts to prevent the spread of the virus, strengthen clinical management (with an emphasis on early detection and treatment of severe cases), and improve epidemiological surveillance in high-risk areas.

PAHO reminds that vaccination remains one of the most effective tools for preventing and controlling yellow fever. In 2024, most of the cases reported were in people who had not been vaccinated. In this regard, PAHO urges countries to continue strengthening their vaccination programs and to take appropriate measures to inform and protect travelers heading to high-risk areas.

Given the changes in the patterns of virus transmission, PAHO stresses the need to maintain active surveillance, particularly in areas near affected zones, to detect any suspected cases early and ensure timely isolation and treatment.

Key recommendations:

• Enhanced surveillance: Rapidly detect any suspected cases, even in areas not traditionally affected.
• Universal vaccination: Ensure that at least 95% of people in high-risk areas are vaccinated.
• Laboratory diagnosis: Conduct virological diagnostics via PCR during the first 7 to 10 days of illness, or ELISA IgM in the convalescent phase, with careful interpretation due to cross-reactivity in areas with other circulating flaviviruses.
• Clinical management: Strengthen early detection and specialized monitoring of severe patients as a key measure to save lives.
• Preparedness for outbreaks: Review and update the national and subnational vaccine inventory to plan a rapid emergency response.

Since 1970, yellow fever has reemerged as a public health threat in the Americas. The disease is endemic in 13 countries and territories in the region, causing outbreaks and deaths. In 2014, the virus spread beyond the Amazon basin. Some attribute this spread to changes in the interaction between monkeys, mosquitoes, and humans.

The Colossa Mine, a small-scale artisanal operation previously exploited in the 1800s, lies within a mineralized trend along the Otú Fault, covering multiple historical mines across a 1.8 km corridor. Soma says that its ongoing exploration indicates high-potential gold zones, further evidenced by stream sediment results and recent channel samples.

The Colossa Mine’s quartz veins, positioned in a unique orientation relative to the Otú Fault, resemble the configuration of veins at Aris Mining’s El Silencio mine in Segovia, raising expectations of further vein extensions. Soma Gold has scheduled an initial 500-meter diamond drill program in late 2024 to further explore these zones.

Since 2023, all Soma exploration samples have been processed by ALS Lima for standardized fire-assay and ICP-MS analysis due to lab improvements at Soma’s Operadora mine lab. Soma’s properties in Antioquia now cover over 56 km of the Otú Fault, including other significant mines along the district’s mineralized trend.

Soma Gold Corp. holds mining interests in Antioquia, Colombia, and Para State, Brazil. The company’s El Bagre Mill is currently operational, with funds from production directed toward regional exploration efforts.

Above photo: Stream sediment samples collected in the vicinity of the Colossa Mine. (CNW Group/Soma Gold Corp.)

This year’s program features 3,000 activities across 25 event categories, with the participation of 280 national and international guests. Among them are 16 international editors and publishing agents from countries including Argentina, Mexico, Venezuela, Ecuador, Spain, Puerto Rico, Brazil, Bolivia, Uruguay, and Chile.

The event’s agenda will include discussions, workshops, literary activities, and exhibitions. Notable participants include Colombian authors Mario Mendoza, Luis Miguel Rivas, and Velia Vidal. International guests include Andrés Oppenheimer (Argentina), Katie Kitamura (US), Javier Peña (Spain), Audry Magee (Ireland), Aura García-Junco (Mexico), and Carlos Manuel Álvarez (Cuba).

In addition to celebrating independent publishing, the event will commemorate significant milestones, such as the 100th anniversaries of La Vorágine and Colombian comics, the 20th anniversary of Bibliocirco, and the relaunch of the León de Greiff Prize, which recognizes contributions to publishing and literature nationwide.

The Fundación Secretos para Contar, participating for the first time, will conduct workshops at the Jardín Lectura Viva. These workshops, inspired by the foundation’s work in urban and rural areas of Antioquia and Colombia, will focus on reading promotion and narrative creation. The foundation will also unveil its ninth book collection, emphasizing the connection between rural and urban life.

Other highlights include the Cuentódromo, Salón del Libro Infantil y Juvenil, Salón del Cómic y la Ilustración, Salón de Nuevas Lecturas, Salón del Libro Universitario, and Salón de la Autopublicación. The event will also feature book launches, a national booksellers’ meeting, and seminars on editor training and comic research in Colombia.

Bibliocirco will mark its 30th anniversary with a performance on September 7, launching the latest installment in its Cuentico Amarillo series, La niña perdida espera a Peter Pan, written by José Andrés Ardila and illustrated by Yanneth Pineda.

On September 12 and 13, the Secretaría de Cultura Ciudadana and Sura will host conversations under the theme “How to Live Well Together?” These discussions, aligned with the Medellín Te Quiere 2024-2027 Development Plan, will explore social trust, civic culture, and community resilience.

The event is supported by a public investment of $9 billion pesos from the Medellín city government, which aims to promote literacy, writing, and oral traditions across the city’s 16 districts and five townships. Partnerships with organizations such as Comfenalco, Comfama, EPM, Fundación Saldarriaga Concha, and El Colombiano have also facilitated the event’s programming.

The event will feature 300 exhibitors, including international representatives from countries such as Germany, Austria, Brazil, China, the United States, and several others. The focus will be on solutions related to the circular economy, Industry 4.0, 3D printing, digital manufacturing, and sustainable production.

Organized by Acoplásticos, Messe Düsseldorf North America, and Corferias, ColombiaPlast aims to provide a platform for industry leaders to explore advancements in raw materials, machinery, recycling, production management, process control, and sustainability. The event will also serve as a venue for forming business alliances and enhancing industry competitiveness in the region. Key participants will include directors, buyers, and technicians interested in the latest innovations and the need for industry transformation.

Daniel Mitchell, Executive President of Acoplásticos, emphasized the importance of such events for the industry’s evolution, noting that they offer valuable opportunities for knowledge exchange and addressing challenges.

ColombiaPlast 2024 will feature a comprehensive agenda of conferences, workshops, and exhibitions. The academic program will cover themes such as Industry 4.0, sustainability, and innovation in plastic processing technologies, aligning with global discussions in the petrochemical and plastic sectors. Notable speakers include Dr. Ing. Laura Fernanda Flórez Sastre, Dr. Ing. Ana María Henao Montoya, and Mag. Silvio Ospina, who will provide insights into making the plastic industry more sustainable and competitive.

The event will also include experiential areas like the 3D Fest and GoPlastic zones. The 3D Fest will highlight 3D printing and digital manufacturing, aiming to boost their adoption in Colombia’s production processes. The GoPlastic zone will expand on its 2022 focus on recycling, incorporating broader sustainability solutions to promote more efficient and environmentally friendly production.

For more information, visit https://www.colombiaplast.org/.

Ratings Rationale

The downgrade of Ecopetrol’s BCA (a measure of the company’s intrinsic credit risk without support considerations) to b1 from ba3 and the ratings downgrade to Ba1 from Baa3 reflect a shift in the company’s financial policy as leverage has risen concurrently with the ongoing distributions of dividends and the coming implementation of an ambitious capital investment strategy spanning the next three years, which could erode the company’s liquidity position or lead to higher indebtedness. The downgrade also reflects the negative free cash flow posted in 2023 and Moody’s expectations that Ecopetrol will continue to register negative free cash flows by 2025.

Ecopetrol has been increasing debt levels in order to finance its expansion, including the acquisition of Interconexion Electrica S.A. E.S.P.’s (ISA, Baa2 stable). However, Moody’s acknowledges that capital investments have not resulted in a similar increase of the company’s EBITDA. Debt increased at a compound annual growth rate (CAGR) of 22% during the 2019-2023 period, while EBITDA has only grown at an 11% CAGR. Increasing debt has also led to a lower interest coverage of 8.3x in 2023 compared to the 12.6x of 2022. Given that Moody’s expects Ecopetrol to continue funding its ambitious capital spending plan through debt and due to the high interest rates environment, interest coverage will further decline to 7.3x, on average, for 2024 and 2025. Moody’s also recognizes that a number of Ecopetrol’s planned projects, particularly those involving natural gas, carry increased execution risk due to their location in deep-water offshore environments.

The downgrade also takes into account that Ecopetrol has been distributing a higher share of dividends compared to its current policy of 40-60% during the last 3 years, while increasing debt levels, demonstrating a more aggressive financial policy. The cash outflows have been partially compensated by the Government of Colombia’s (Baa2 stable) transfers to reimburse fuel subsidies. However, Moody’s recognizes that instead of reducing debt or strengthening the company’s liquidity position, available cash has been used for dividends.

Ecopetrol’s Ba1 ratings continue to reflect the company’s status as Colombia’s leading oil and gas producer, accounting for over 60% of the country’s production and close to 100% of the supply of oil products, as well its large power transmission business in Colombia and other countries in Latin America. Furthermore, Moody’s assumes high probability of support from the Government of Colombia and a moderate default dependence between the two entities; this assessment results in a three-notch uplift of Ecopetrol’s rating to Ba1 from its b1 BCA.

Ecopetrol’s liquidity position is adequate. During 2023, Ecopetrol registered a negative free cash flow position of $3.4 billion funded through a $3.8 billion increase of debt given its record capex investments. The company’s cash position as of December 2023 equaled $3.6 billion. Moody’s expects that in 2024 the company’s cash generation along with the Government of Colombia’s transfer to compensate fuel subsidies will be enough to cover mandatory cash obligations plus annual capital expenditures of about $6 billion, as per management’s guidance, and dividends. However, Moody’s expects that liquidity will be tight during the next two years per Moody’s expectation that capex will remain around $6 billion, and if dividend distributions continues to outpace the policy range.  The rating action takes into account that while the company took an extended time to refinance 2023 and 2024 maturities, it has already refinanced 2025’s. The next significant debt maturity is in 2026 when $2.8 billion will become due.

Moody’s expects Ecopetrol’s financial obligations will continue to be supported by access to global and Colombian capital markets, and government support. Ecopetrol’s Ba1 ratings also take into consideration the solid and relatively stable cash flow from its power transmission company, Interconexion Electrica S.A. E.S.P. (ISA) and its midstream subsidiary, Cenit SAS, which includes Oleoducto Central S.A.

The stable outlook on Ecopetrol’s ratings reflects Moody’s view that its credit profile will remain mostly unchanged over the next 12-18 months. The stable outlook also reflects the stable outlook on the Government of Colombia’s sovereign rating.

Factors that could lead to a ratings change

An upgrade on Ecopetrol’s Ba1 ratings is unlikely over the next 12-18 months because Moody’s expects the company’s credit metrics to remain relatively stable. However, if the company manages to strengthen its financial policies and simultaneously demonstrates ability to register recurrent positive free cash flow, reduce financial leverage while growing production and keeping proved reserve life at least stable, its ratings could be upgraded. Specifically, its rating could be upgraded if the company’s Leverage Full Cycle Ratio remains at 1.5 times, which would indicate stable finding and development costs, and retained cash flow/net debt would have to be over 40% on a sustained basis.

A ratings downgrade could occur if there is a deterioration in Ecopetrol’s operating performance, including a significant decline of its reserve life on a sustained basis, or increasing liquidity risk or debt leverage from the current levels; or if retained cash flow/net debt declines to around 20%. In addition, because Ecopetrol’s ratings benefit from implicit support from the Government of Colombia, a negative action on the government’s rating or a change in Moody’s assumptions about government support could lead to a negative action on Ecopetrol’s ratings.

Profile

Ecopetrol, 88.5% owned by the Government of Colombia, is the largest integrated oil and gas company in the country. The company has three business segments, namely hydrocarbons, low-emission solutions and transmission and toll roads. Its gross production averaged close to 730 mboed and total assets amounted $65 billion on December 31, 2023.

ISA, headquartered in Medellin, Colombia, is an operating holding company with businesses in the electricity transmission, toll roads, telecommunications, and systems management sectors. The company holds direct and indirect ownership stakes in a portfolio of subsidiaries located in Colombia, Brazil, Peru, and Chile.

Among the projects:

• Pozuelos-Pastos Grandes, Argentina. Company: Ganfeng Lithium, status: Engineering development. Investment: US $338 M
• Carmen Lithium Plant, Argentina. Company: SQM, status: EIA Approved – with an estimated investment of around US $987 M
• Blanco Project, Chile. Company: Codelco, status: Modeling. Investment: US $700 M
• Falchani Lithium, Peru. Company: American Lithium Corp and Macusani Yellowcake, status: Environmental assessment. Investment: US $700 M
• BMW Battery Plant, Mexico. Company: BMW. Investment: US $865 M
• Oruro Salt Flats, Bolivia. Company: CATL BRUNP & CMOC (CBC), status: Feasibility studies. Investment: US $1.4 Bn
• Salinas Lithium, Brazil. Company: Latin Resources, status: Exploration. Investment: US $57 M
• 20 other projects in Latin America

Request the full list of projects

See you at the congress,

Catalina Velasco

Latin America Marketing Manager

cvelasco@vostockcapital.com

• Colombian Air Force training crash leaves one dead, Lieutenant Colonel Mario Andrés Espinosa Gonzales. An investigation is underway.
• After being cashiered by President Petro, his former campaign manager and Ambassador to Venezuela Armando Benedetti returns to his post, despite the ongoing scandal involving him and former Chief of Staff Laura Sanabria. For background, see this article: https://www.financecolombia.com/fast-moving-colombian-scandal-may-threaten-the-presidency-of-gustavo-petro/
• Colombian prosecutors are charging former campaign aspirant and Alvaro Uribe acolyte Ivan Zuluaga and his son with receiving over $1.6 million USD in illegal campaign money from Odebrecht. The Brazilian Lava Hato scandal continues to ensnare culprits throughout The Americas even years after it launched. For more details see this article: https://www.financecolombia.com/oscar-zuluaga-charged-with-fraud-in-campaign-finance-fallout-from-odebrecht-scandal/ and for background on when the Odebrecht scandal reached the campaign of former President Juan Manuel Santos who defeated Zuluaga, see https://www.financecolombia.com/colombian-president-santos-apologizes-for-odebrecht-campaign-fund/

Moment Colombian Air Force Super Tucano suffers fatal incident (video may be disturbing):

Momento exacto en el que dos aeronaves colisionan mientras realizaban un entrenamiento en ejercicio en Villavicencio pic.twitter.com/L8Q6FOLns6

— Mely Múnera (@MelyMunera) July 1, 2023

Fitch projects growth to remain weak in the region due to constrained consumer spending and low investment levels as a result of policy uncertainty. External markets are not providing relief as commodity prices fall.

Source: Fitch Ratings

Weak consumer demand, declining commodity prices and high interest rates have pressured Latin American corporates’ cash flow. These challenges, in combination with closed local and cross-border markets for an extended period, led to several negative rating actions in the past six months.

Downgrades occurred across multiple sectors during the past 12 months but telecommunications, media and technology issuers were at the forefront of the regional credit deterioration, with six downgrades. Key reasons were declining average revenue per user, the sale of assets and dividend distributions of proceeds, plus weak corporate governance.

Brazilian issuers account for the majority of Latin American corporate downgrades in 1H23. A benchmark interest rate of 13.75%, the reluctance of banks to lend and the closing of local capital markets following the disclosure of Americanas’ accounting irregularities proved hard hurdles to overcome.

Fitch says it does not expect rating downgrades for many cyclical issuers despite declining prices and margins. Downgrade risk is highest for petrochemical companies due to the potential downturn length and the negative free cash flows at current spreads. Fitch expects polyethylene supply will be taken off line to balance the market, but the timing is highly uncertain.

Prices for copper and iron ore are expected to decline throughout the second half of 2023 and into 2024. Most mining companies have strong business positions that will allow FCF to remain neutral. Others will need to reduce capex or dividends to hold debt levels steady. Zinc producers have the weakest medium-term prospects given its low importance to energy transition.

Indications of cross-border markets reopening is a key variable to watch that will be crucial to stabilizing long-term credit quality in the region. Cross-border markets are not a viable option for most issuers and local debt capital markets remain dormant in several countries. High-yield issuers struggled to find banks willing to increase exposure to these corporates.

The timing and pace of policy rate decreases is another important factor for sector performance. Latin American central banks increased rates quicker and more sharply than peers. Cash flow pressure will continue for high-yield issuers as well as consumers until interest rates decline sharply. The timing remains uncertain as central banks are reluctant to cut rates despite political pressure and declining inflation for historical reasons.

The problem, at least as both competitors and Colombian airline regulators saw it, was that a combined Avianca – Viva merger would control too much of Colombia’s domestic aviation market. Aerocivil, Colombia’s civil aviation regulatory authority originally rejected the merger, but then on appeal by the two airlines, Colombia’s Ministry of Transportation (Mintransporte) ordered Aerocivil to at least reconsider the deal, which it is currently (as of publication) doing. All parties expect a ruling shortly.

Complicating the situation, competing airlines Jetsmart and Latam, both out of Chile, have in the last month, submitted competing offers for Viva, much to the consternation of Viva’s controlling shareholders. The way this plays out may mean the difference between dominance and diminution for Avianca, though with multiple suitors, the survival of Viva seems to be more secure than last autumn when Aerocivil first ruled against their deal.

Here are some of the major actors in the hunt to acquire Viva:

MOBI FIA — MOBI Fundo de Investimento em Ações Investimento no Exterior was the controlling shareholder of Brazil’s GOL airlines, controlled by Constantino de Oliveira Junior.

GOL — Founded in 2001, GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL e B3: GOLL4) is Brazil’s largest airline. Operating on the low-cost model, Gol is primarily a domestic airline serving many Brazilian cities, but also flies to several international destinations throughout Latin America.

Avianca — Once controlled by Germán Efromovich, a South American Magnate with ties to Bolivia, Brazil and Colombia, he lost control when he defaulted on a loan from US based United Airlines collateralized by his controlling interest in Avianca.

South American magnate & former Avianca chairman Germán Efromovich

Avianca was founded in Barranquilla, Colombia by German entrepreneurs over 100 years ago, but had its corporate domicile in Panamá. After filing for bankruptcy, Avianca still has a Colombian base of operations but is domiciled in London.

Today, Avianca is owned by private equity firm Elliott International L.P., United Airlines controlled South Lake One LLC, and Kingsland International Group, which is controlled by Efromovich nemesis, El Salvador magnate Roberto Kriete. Kriete’s father started TACA airlines which Kriete merged with Avianca in 2013, giving him a minority stake in Avianca through his Kingsland Holdings. Kriete and Efromovich soon fell out though, after Kriete accused Efromovich of mismanagement and self-dealing. Ironically, Kriete opposed Avianca’s dealings with United Airlines.

In May of 2022, Avianca shareholders, through a vehicle called Castlesouth Limited, acquired a controlling economic interest in Fast Colombia S.A.S., the legal name of the airline known as Viva. Avianca could not yet take voting or operational control of Viva as the deal would have to be approved with regulators. It is analogous to acquiring non-voting shares in a company. Avianca shareholders also hold a convertible debt instrument from Chilean low-cost carrier Sky Airline S.A. In other words, Sky owes money to Avianca through a loan, but that loan can be converted into equity.

United Airlines — One of the largest legacy carriers in the United States, United (NASDAQ GS UAL) participates with Avianca and Panamá’s Copa Airlines in the Star Alliance. United became a major shareholder in Avianca when Germán Efromovich defaulted on a $400 million USD loan from United collateralized with Avianca shares. Apparently Efromovich took out the loan in an attempt to save his faltering Brazilian and Argentine airlines, which eventually failed.

United now holds its interest in Avianca through an entity called South Lake One LLC.

Abra Group — MOBI FIA entered into a deal with Avianca’s owners, South Lake One, Kingsland International Group, and Elliott International to combine GOL and Avianca under one UK-based holding group called Abra Group Limited, while retaining separate brands (at least initially). The new entity would conceptually look something like Europe’s International Airlines Group, that operates European airline brands Iberia, British Airways, Aer Lingus, Level and Vueling under one umbrella holding company. The Abra Group also seeks to add Viva to this, but so far their plans have been thwarted by Colombian regulators.

Roberto Kriete is chairman of Avianca, Abra Group, and Kingsland Holdings

Roberto Kriete is the chairman, Constantino de Oliveira Junior is the CEO, while Avianca’s CEO Adrian Neuhauser and GOL’s CFO Richard Lark are co-Presidents.

Jetsmart —Chilean low-cost airline that has also announced its desire to buy Viva. Jetsmart is majority-controlled by US-based Indigo Partners, an aviation private equity firm. American Airlines also has a minority stake in Jetsmart, though American is said to be interested in taking a stake in Colombian low-cost airline startup Ultra Air.

Jetsmart already flies between Colombia and Chile, but the airline has also been seeking entry into Colombia’s domestic aviation market. Last year, Colombian regulators tabled but did not reject Jetsmart’s entry, asking for more information on the airline’s relationship with American Airlines, and also expressing doubt that Jetsmart had the fleet capacity. This year, Jetsmart is due to take delivery of 14 new Airbus A320neo and A321neo aircraft, and has the stated ambition of a 100 aircraft fleet by 2026.

Indigo Partners — US-based aviation focused private equity firm established by William Franke. Indigo is an investor in Norway’s Wizz Air, Frontier Airlines in the US, Volaris in México, Cebu Pacific in the Philippines, and Canada’s Enerjet. Indigo also invested in Spirit Airlines and Tiger Airways. Though Indigo is an investor in Volaris with Kriete and Kingsland Holdings, its Jetsmart is acting against the interests of Kriete’s Kingsland, Avianca and Abra Group by competing for Viva.

Latam—Another Chilean airline, Latam is the largest airline based in South America, though it holds a minority position in the Colombian market. Latam was formed in 2012 when Chilean LAN and Brazilian TAM agreed to merge. The airline rebranded itself from the LAN and TAM brands to LATAM in 2015. Latam participated with American Airlines in the Oneworld alliance, but Delta Airlines broke that when it took a 20% financial stake in Latam in 2019. Qatar Airways also has a minority stake in Latam. This month, Latam also announced its intentions to compete for the acquisition of Viva.

Castlesouth—Castlesouth Limited is the UK based entity that acquired the majority economic interest in Viva air last year from Irelandia Aviation, but must wait on approval from regulators before it, Avianca, or Abra can take over voting and operational control. Castlesouth, like Avianca, is owned by Kingsland Holdings, Elliott Management, and South Lake One (United Airlines). Castlesouth through its lawyers,  Philippi Prietocarrizosa Ferrero DU & Uría, has publicly stated its strong preference for its deal to go through between Avianca and Viva rather than between Viva and competitors Jetsmart or Latam; to be expected as Castlesouth is controlled by Avianca’s shareholders.

Elliott International — Elliott International is an investment vehicle owned by Elliott Investment Management, a US based hedge fund controlled by billionaire Paul Singer. In the past Elliott has invested in projects of former Avianca controlling shareholder Germán Efromovich, and has since then held interests in Avianca through its bankruptcy to the present.

Irelandia Aviation —An aviation private equity firm with a track record of successfully developing early-stage airlines. Irelandia was instrumental in the launch and growth of Viva, and also Mexico’s Viva Aerobus, Singapore’s Tiger Air (now merged with Scoot), US-based Allegiant, and its original success, Ryanair.

Viva was the brainchild of Mexican entrepreneur William Shaw, who now runs Ultra Air.

Kingsland Holdings — This is the investment vehicle of El Salvador tycoon Roberto Kriete. Kingsland Holdings holds Kriete’s shares in Avianca, and in Mexican low-cost carrier Volaris. Kriete’s father founded TACA airlines which merged with Avianca in 2013. Though Kriete sued Avianca because of its dealings with United Airlines, United ended up installing Kriete as Avianca’s chairman after ousting Germán Efromovich, who initially did the deal with Kriete. Kingsland is now a shareholder of Abra Group, and of Castlesouth Limited.

Viva — The subject of it all, Fast Colombia S.A.S. was the brainchild of Mexican entrepreneur William Shaw, Juan Posada, Gabriel Migowski, and Frederik Jacobsen. The concept of a Colombian low-cost airline was actually the subject of Shaw’s Stanford University MBA thesis. The four presented the idea to Irelandia Aviation’s Declan Ryan who agreed to fund the startup, along with other investors, such as Colombian insurance and banking concern Grupo Bolivar. None of the founders remain with the airline, though Shaw went on to form competing low-cost carrier Ultra Air, and is a vocal opponent of the Viva-Avianca merger. Viva also owns a Peru subsidiary that operates domestic routes throughout the neighboring country.

Viva is run by Argentine-born former Latam executive Felix Antelo, who has guided the company through rapid international expansion and the COVID pandemic. Unlike Avianca and LATAM, under Antelo’s leadership, Viva has been able to avoid filing for COVID-related bankruptcy, though the company has recently entered a voluntary debt mediation process under Colombian law. UPDATE: Felix Antelo resigned last week and has been replaced by Viva executive Francisco “Pacho” Lalinde.

Viva is run by Felix Antelo

Viva’s growth has come largely at the expense of Avianca, with Avianca carrying 36.3% of Colombian domestic passengers, and Viva at 16.2%. Before Viva’s launch and a devastating pilot strike and lawsuits between shareholders Kriete and Efromovich, Avianca controlled over 60% of domestic traffic. Viva is quick to point out that their low-cost model also competes with terrestrial bus lines in Colombia and Peru, and the airline is proud of how many passengers have flown for the first time with Viva because of its accessible fares.

Latam held 20% market participation, Wingo, a Colombian low-cost subsidiary of Panamanian carrier Copa held 4.5%, Easyfly, a Colombian carrier specializing in smaller cities had 4%, and government owned Satena, which flies to more remote destinations, 2.9%. Other airlines held 18.1% of the market. Ultra air has rapidly been growing and this year we can expect it to have gained significant market share.

Viva’s management has issued several carefully worded statements urging the Colombian government to approve its acquisition by Viva, though both airlines prefer to call it an “integration” as Viva and Avianca shares would have a common owner. Avianca has pledged that Viva would continue to operate separately under its own brand.

American Airlines — American Airlines (NASDAQ: AAL) holds a minority stake in Jetsmart, which has submitted an offer for Viva. American Airlines had a close working relationship with Latam which was ruptured when competing US legacy airline Delta took a stake in Latam, as the airline seeks to expand its presence in South America.

Delta Airlines — Delta Airlines (NYSE: DAL) holds a minority stake in Latam, which has submitted an offer for Viva.

Qatar Airways — Qatar Airlines holds a minority stake in Latam, which has submitted an offer for Viva.

Sky Airline – This Chilean low-cost carrier owes money in the form of a convertible loan to the shareholders of the Abra Group. This loan could conceivably convert to equity, in which case the Abra Group would also become a part owner of Sky.

Ultra Air — Colombian low-cost carrier formed by Viva co-founder William Shaw, who after several years, left Viva on somewhat bitter terms after building the company and finally serving a short stint as CEO. Though the airline was his brainchild, he never had control of the airline’s board, and his shares in the company became diluted though multiple capital raises. On behalf of Ultra, Shaw has been a vocal opponent of the Avianca-Viva merger.

Analysis: A missed connection?

Should Abra Group manage to consolidate Avianca, Viva, and Gol, it could potentially dominate the South American airline market, especially the Colombian domestic market where it would have a dominant position. Strong competition would remain for international routes from carriers like Latam and Copa. On the other hand, should Jetsmart or Latam manage to acquire Viva, it would spell bad news for Avianca, which would continue to face a strong competitor, now financially rejuvenated. Avianca, once known as offering a higher-end passenger experience, now suffers from a dismal reputation with travelers, and a muddled brand that is stuck somewhere between a legacy full-service carrier and a low cost competitor to Viva.

If Avianca’s shareholders are unable to acquire control of Viva, they will have to seriously revamp its brand strategy and determine an identity, because Colombia’s aviation market is becoming intensely competitive. New airlines are entering; we already have spoken of Ultra Air, but other new carriers are coming such as Arajet. Low-cost carrier Wingo is still relatively small, but is wholly owned by Panamá’s Copa, which is financially very healthy and enjoys an excellent market position.

A decision regarding the Avianca-Viva tie up is due soon. Should Aerocivil reject the deal again, expect Avianca shareholders, through Castlesouth to fight it again, conceivably appealing as far as Colombia’s supreme court. Avianca has stated publicly that the acquisition is to save Viva, but there is no doubt that this deal is critical to Avianca’s survival strategy, as Viva has been Avianca’s single biggest competitive threat.

In any case, it is unlikely that Viva will be alone for long, as alternative deep pocketed suitors remain in a holding pattern.

Stay tuned, and be sure to subscribe to Finance Colombia for timely updates and breaking news on this and other important deals relevant to investors and executives active in Colombia.

Inexmoda explains that 38 of the 285 Colombian exhibitors that will be at the fair are from municipalities with fewer than 200,000 inhabitants or Colombia’s special PDET development zones, equivalent to 13% of the Colombian participants in the fair. .

Minister of Commerce, Industry and Tourism, German Umaña Mendoza

The Minister of Commerce, Industry and Tourism, Germán Umaña Mendoza, highlighted the importance of attracting international buyers and supporting national entrepreneurs from PDET municipalities, since it boosts “the promotion and encouragement of small and medium-sized companies in the country, as well as its integration into the world’s value chains”.

Umaña pointed out that one of the purposes of the public policy carried out by his portfolio is to “strengthen the domestic market and exports, to substitute imports and to generate income to advance in the reduction of inequality.”

Some buyers who participate in Colombiatex will be looking for innovations in textiles, technical or intelligent fabrics with benefits or properties such as antibacterial fabrics, sun protection, waterproof, fireproof, quick-drying, among others, as well as companies that have sustainable and environmentally friendly practices. environment, a component that is segmented at the fair with a badge in each exhibitor that complies with these good practices and that are part of the sustainability route.

“The mission of buyers from Latin America and the Caribbean represents 90% of the mission of buyers that we invite. It is a very important showcase for national businessmen to make themselves known to international buyers and show all the quality of the industry, along with their designs, flexible delivery volumes, sustainability, among other aspects,” said Carmen Caballero, president of ProColombia.

Caballero added that “coordinated work with Inexmoda is key to making business meetings as effective as possible. This undoubtedly brings development and better opportunities for the regions of the country, through the exports of SMEs from multiple departments. In fact, 85% of the exhibiting companies from Colombia at the fair correspond to MSMEs”.

40% of international companies (130) are linked to buyers who come to Colombiatex for the first time, mainly from Ecuador, Mexico, the Caribbean and Central America.

Likewise, the main markets of the international delegation of buyers are from Ecuador (46.6%), Costa Rica (7.7%), Guatemala (6.5%), the United States (6.5%), the Dominican Republic (6.5%), Peru (5.6%) and Mexico (4.9%). Likewise, of 21 invited countries, 13 countries (62% of the mission) currently have a current trade agreement with Colombia.

Between January and November 2022, Colombian fashion exports registered $962.6 million USD, an increase of 6.5% compared to the same period in 2021. There, the main buyers were the United States, Ecuador, Mexico, Peru, Costa Rica, Chile, Guatemala, Brazil, Panama and Venezuela.

Foreign sales of textiles increased 14.2% to $204.4 million USD, according to figures from DANE with analysis from ProColombia.

Fabrics, girdles and control clothing, jeans, underwear and pajamas, raw and prepared leather, and T-shirts were the goods most exported by Colombia. The leading textile exporting departments were Antioquia, Bogotá, Valle del Cauca, Atlántico, Cundinamarca, Santander, Risaralda, Caldas and Norte de Santander.

Headline photo: Liliana Padierna