Viva Air Seeks Colombian Government Loan
In response to the Coronavirus Covid-19 Pandemic, Colombian airline Viva Air is seeking a bridge loan from the Colombian government to sustain finances through the resultant economic recession. This comes on the heels of deeply insolvent legacy carrier Avianca’s (NYSE:AVH, BVC: PFAVH) own plea for government support, despite widespread public opposition.
Felix Antelo is CEO of Viva Air Group, based outside Medellín, Colombia
Unlike Avianca, which appears to be hopeful for a government takeover, privately held Viva Air insists that it is simply seeking temporary liquidity.
“In our particular case, and on this it is very important to emphasize, unlike what may be happening with other airlines in Colombia and the world, we are not asking for or requiring financial subsidies or bailouts; What we are looking to obtain is a bridge loan with a reasonable period of time, which can be between five and six years, and a grace period of between two and three years, given that our problem is only one of liquidity, given that we have more than a month without flying and, as the president recently said, this restriction will most likely extend into June. In this way, we will guarantee the sustainability of the business, the activation of operations once the emergency is over, as well as air inclusion in Colombia,” said Félix Antelo, CEO of the Viva Air Group.
Viva Air is controlled by Irelandia Aviation, the parent company of Ryanair in Europe, Allegiant in the United States, and Viva Aerobus in Mexico.
International carrier Copa Airlines (NYSE:CPA) in neighboring Panamá just closed on a $350 million USD private debt placement paying 4.5%, and due in 2025. Avianca recently restructured a significant amount of its debt in December, paying double the interest at 9%. Still, the money losing airline has defaulted on payments of debt and expenses and says it is on the verge of being unable to pay wages.
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