The buyer is Regional Airlines Holding LLC., domiciled in Delaware, USA. The transaction was closed on May 31, 2019 by executing the contract for the purchase and sale of shares signed on April 22 between the parties. As of press time it is unknown who controls Regional Airlines Holding.

This transaction occurs within the framework of Avianca Holding’s new corporate strategy aimed at strengthening its international passenger transportation segment, as well as focusing on the Lifemiles loyalty program and cargo transportation business units.

The 2 regional airline subsidiaries primarily operate short distance domestic flights within the 2 small Central American countries, outside of Avianca’s core international strategy

Due to this transaction, thirteen Cessna 208 (Caravan) and two ATR 42 aircraft (such as pictured above) will no longer be part of Avianca Holdings’ fleet, in line with the company’s fleet simplification strategy.

 Avianca’s international routes served from the Juan Santamaria International Airport (SJO) in San José, Costa Rica, and the Augusto Sandino International Airport (MGA) in Managua, Nicaragua, will operate normally with their regular itineraries.

In Costa Rica, Avianca has its own airline, Avianca Costa Rica S.A., operating direct flights to the company’s three hubs in San Salvador, El Salvador, Bogota, Colombia and Lima, Peru; as well as flights into Guatemala City, Guatemala and Panama City, Panamá. Those flights to destinations in Canada, Chile, Ecuador, the United States and Mexico are operated with Costa Rican crews.

Avianca has said that despite the sale, it will continue offering international connectivity in Nicaragua with daily flights to San Salvador and Miami. The capacity of these flights was recently increased are now operated on Airbus A320 aircraft.

Restructuring at the top: The United Airlines Factor

United Airlines (NASDAQ: UAL) proceeded to enforce its contractual rights derived from the loan agreed with BRW Aviation (Synergy Group) and appointed Kingsland Holdings Limited as a third independent party with the voting rights corresponding to BRW Aviation, although not its ownership. Kingsland, the largest minority shareholder in the company, has a trajectory of more than 40 years in the aviation industry and has been a member of the company’s board since the completion of the merger between Avianca and Roberto Kriete’s TACA.

Likewise, Kingsland Holdings Limited made the decision to restructure Avianca’s board of directors, which now has Roberto Kriete as CEO and consists of Richard Schifter, Sergio Michelsen, Fabio Villegas, Alvaro Jaramillo, Oscar Dario Morales, James Leshaw, Juan Emilio Posada, Jairo Burgos, Rodrigo Salcedo and Roberto Zamora. This first-level board include three of Avianca’s former presidents and several global experts in the airline industry.

Kingsland has indicated that it will continue to work towards creating a more transparent corporate government for Avianca Holdings. Kriete tangled with Avianca’s former chairman and controlling shareholder Germán Efromovich in recent years over governance and transparency in recent years.

“We foresee a very positive future for all collaborators, creditors, suppliers, shareholders and especially for Avianca’s customers. My job is to promote a capable team and board of directors, with the necessary skills to really lead Avianca’s transformation. We have many opportunities in the future and working together, and we will rise to the challenge”, said Kriete.

“This change is very positive for our corporate government, a clear show of confidence from the airline’s shareholders and for the transformation plan currently in place. Our focus remains the same: to seek a profitable model with high operational efficiency, and delivering the best services for our customers,” said Renato Covelo, acting CEO of the company.

The end of an Empire?

Germán Efromovich, the ousted Chairman of Avianca Holdings, also controlled two separate airlines that share Avianca’s name under a licensing agreement: Avianca Brasil and Avianca Argentina. After defaulting on Synergy Group’s loan payment to United Airlines, Efromovich lost control of Avianca Holdings. Almost simultaneously, Brazilian regulators shut down Avianca Brasil after several jets were very publicly repossessed Avianca Brasil filed for bankruptcy in December, 2018. and this week Avianca Argentina has declared bankruptcy and ceased flights. The website has been taken down as of press time.

With no shares of Avianca Holdings as collateral, it is doubtful that Efromovich can raise the capital to resurrect Avianca Brasil and Avianca Argentina, especially as they are both in bankruptcy and not operating. It is also almost certain that the new leadership of Avianca Holding will oppose the licensing of the Avianca brand name to these two separate entities. According to FlightGlobal, Avianca Argentina was only operating two ATR 72-600s.