Avianca was a slow-moving, bloated legacy carrier based in Colombia that had spread its wings around South America but not in a wise way. Then it went bankrupt, got new management, and the airline has completely transformed itself. Now, it has its eyes set on… Europe? Yep, Europe. And it’s an impressively deliberate plan that actually does fit well with the airline’s strengths.
To be fair, it’s not really Avianca that I’m talking about anymore. It is the new parent company Abra Group which is based in the UK. Abra was created in May 2022 when Avianca and Brazil’s Gol came together under single ownership. (It technically also controlled Viva before it died, but we won’t talk about that.)
As the press release explained, this isn’t a merger as you might expect in the US. This is a holding company-style transaction which it describes this way:
Together, Avianca and GOL will anchor a pan-Latin American network of airlines that will have the
lowest unit cost in their respective markets, the leading loyalty programs across the region, and
other synergistic businesses. Avianca and GOL will continue to maintain independent brands,
talent, teams, and culture while benefiting from greater efficiencies and investments under
common aligned ownership.
Abra will provide a platform for the operating airlines to further reduce costs, achieve greater
economies of scale, continue to operate a state-of-the-art fleet of aircraft, and expand their
routes, services, product offerings, and loyalty programs.
This brings together the Avianca strongholds in Colombia, and Central America (former TACA flying) plus a little Ecuador and marries it with Gol’s Brazilian focus. It’s a complementary network, but both companies are either already done with or coming out of the bankruptcy spa. So they’ll have fresh corporate structures to work with.
In October 2023, Abra then signed a “memorandum of understanding” with Aerolineas Argentinas. Now, I know what you’re saying… Aerolineas is the most doomed airline in the world these days, and it is an absolute mess. But just know that this is not an equity transaction. If Aerolineas can contribute to the success of Abra somehow, then great. If not, well, no harm, no foul. In the meantime, it does present a pretty impressive-looking network.
Maps via Cirium
This is all pretty basic work here. There have been plenty of deals between airlines with complementary networks before. But what comes next is where Abra is making things interesting.
In May of this year, Abra took a stake in Wamos Air. Why on earth would Abra care about a charter/wet-lease specialist out of Spain? Well, the press release from Abra included a statement from CEO Adrian Neuhauser which included this rationale:
And third, because this partnership will allow us to participate in long-haul markets with wide-body aircraft in other countries beyond our current Colombia operation.
That may sound strange, but the pieces are starting to come together. Remember how IAG — owner of British Airways, Iberia, and others — is trying to buy Air Europa? Well, bringing Iberia and Air Europa under the same roof has been problematic for the EC, so they are pushing for divestitures. Apparently IAG has just recently submitted its latest offer to the EC which presumably improves upon the last offer that said it would give up to 40 percent of Air Europa’s frequencies. This is not a small giveback.
Previously, Avianca was cited as being one of the airlines interested in participating, and that made some sense. After all, routes where Air Europa and Iberia overlap today include Madrid – Bogotá, Buenos Aires, Caracas, Guayaquil, Havana, Lima, Montevideo, Panama City, Quito, Santo Domingo, and São Paulo. Avianca can do some of that flying today, but it wants more. The problem is, there is still a patchwork of bilateral agreements connecting these countries so it might not be possible for a Colombian airline. What’s the one unifying factor? A Spanish airline can fly these.
So with a strategic stake in Wamos, Abra can now have the vehicle to easily fly the Air Europa cast-off routes, maybe even under the Avianca brand name.
That’s not all, however. Just last week, Abra announced it had entered into a joint venture with Volotea. Volotea is a big low-cost operator in Europe that covers much fo the continent. But it has a particularly large presence in Spain.
July 2024 Volotea Spanish route map via Cirium
Despite covering much of Spain, it only flies to a handful of cities from Madrid: Lyon, Murcia, Nantes, Olbia, Toulouse, and Verona this month. It wants more from Madrid, but to get in there, it sure would like to take over some of that Air Europa short-haul flying.
This is not just an assumption. This is explicitly what the airlines are saying in the press release:
The complementary nature of Volotea’s short-haul operations and Abra Group airlines’ long-haul and intra-Americas services make this alliance a comprehensive solution, positioning it as the best alternative to act as a ‘remedy taker’ in the merger between IAG and Air Europa, offering European and Latin American consumers more alternatives at better prices.
It has been impressive watching this all come together over several months. This gives Abra the ability to strengthen its position in the lucrative South America – Spain market while also providing low-cost connections beyond thanks to Volotea.
I have no idea if this will be the chosen instrument, but it sure shows a remarkable commitment to the idea. I’d love to see this in action.
The Air Show is live early this holiday week. Today, you can finally listen to that WestJet episode I’ve been talking about. Happy 4th, everyone.
23 comments on “Avianca’s Owner Abra Group Jumps Across the Atlantic”
Spain to Latin America has always been considered a market, but I’m wondering how big it really is. Just to gauge if the 2 connecting networks at each end of the transatlantic flight are really worth developing, would you have any idea of its size ?
You would be surprised. For the relatively low per capita incomes in pretty much every Latin American country (some much lower than others), they all have an upper class and most host a decent sized middle class as well. And the demand for flights to Spain has been solid and longstanding. Now, you have to understand also that there are a lot of large cities in the region, but that only the most dominant will have service to Europe. But all that said, places like Guayaquil and San Salvador have hosted Iberia and Air Europa for decades, and many of these cities also see service from the likes of Air France or Lufthansa. And Brazil – Europe is quite a bit bigger than Brazil – USA. So yes, on the whole it’s a good sized market with room for multiple players.
As an aside, doing all this also puts Avianca ahead of LATAM in regional coverage, as well as long haul (where they now hold a wide advantage). And Copa (who has been besting Avianca intra-Latin American flying) can only codeshare European flights out of it’s PTY hub, so again this gives Avianca a new advantage that it hasn’t meaningfully had (those 2 Colombia-Europe flights are a drop in the bucket).
Christophe – Well, according to ARC/BSP data via Cirium, in the 12 months ending April 2024, there were 10,600 passengers flying every day, each way from Spain to Latin America. Here are the cities with more than 200 each way every day:
Buenos Aires – 1,305 Bogota – 1,063 Mexico City – 1,047 Lima – 710 Cancun – 551 Santiago – 493 Sao Paulo – 492 Caracas – 434 Cali – 308 San Jose (CR) – 299 Medellin – 273 Montevideo – 265 Quito – 237 Guayaquil – 221
For comparison, the US to Spain has 7,350 a day. So yes, there’s a lot here.
Does this mean that when an Avianca employee scores, it’s appropriate to yell… “Goal!!!!!!!!!!!!!!!!!!!!!!!!?”
I think this means that Abra is trying to (ahem) “open” doors to a new network.
/I’ll see myself and my bad Spanish dad jokes out, thank you very much.
Abra just might succeed at creating a pan-S. America competitor to Latam. The implications for the 3 global alliances is significant if 2 large carriers dominate S. America.
Tim,
Can you explain in a bit more detail?
Thanks.
It gets really messy too when (or should I say three?) when you consider how the airlines are currently aligned.
This will be an interesting watch to say the least.
LATAM being SkyTeam, AA is OneWorld, Avianca is STAR Alliance (as is COPA). This will be interesting……
actually, IIRC, Latam is not in SkyTeam but is fully aligned with Delta; AR is in SkyTeam but is a weak player so could be persuaded to go elsewhere; Gol is not in oneworld but is an AA partner and also codeshares w/ AF/KL.
how the Abra airlines align themselves w/ one of the 3 alliances will be interesting.
Also, the Argentinian government specifically pushed back making cuts at AR undoubtedly to allow this process to play out.
LATAM isn’t part of SkyTeam but they are in a JV with Delta Airlines. However Aerolineas Argentinas is a member of SkyTeam but also a part of the Abra Group so it will be interesting to see how things shake out. If things continue to progress as they are it is obvious one of the major alliances and quite possibly one major US carrier could be without a partner in South America.
Very interesting. I would assume that much of this S American traffic presently transits the USA. And now with longer range aircraft this traffic will be able to cross the Atlantic without a US transit point?
Nope, it goes straight across the Atlantic. Only flights from northern Central America may flight close to Florida on the way out. South America is also quite a bit father east than North America, so the Atlantic Crossing between Madrid and Brazil/Argentina/Chile is shorter than you think.
Iberia used to operate a Latin American hub out of MIA, (was it in the high E gates?) using jumbos from MAD to feed single-aisle jets to places like SAL, GUA, SJO, SPS, PTY, CCS, etc. 9-11 put an end to this, as non-Americans were more restricted in their ability to transit a US airport (which I think is a mistake, btw). By that time, IB figured out that they could cut smaller routes and use widebodies on the rest as aircraft range had improved of the prior 25 years anyway.
Transit in the USA is also non-viable for immigration and customs reasons. The US doesn’t allow sterile transit through its airports, so everyone on the plane needs to go through immigration and customers. This requires all the passengers to have a visa waiver, transit visa, or other form of authorization to enter the US.
Asia traffic does transit through DFW/IAH though. Many of these visas last years so theat issue is somewhat exaggerated.
Iberia and American have a metal neutral JV so in a sense the former still has a MIA hub
I believe Argentina’s new government wants to privatize Aerolineas Argentinas. So that could be part of its rationale to become part of Abra. The fact that Abra’s airlines are aligned with different US partners complicates things in an interesting way. It could be interesting to see how all of this settles out.
Perhaps more evidence that partnerships trump alliances given that Avianca is Star, Aerolineas is Skyteam, and GOL is partnered with Oneworld anchors American and BA.
I know that this move is focused on Spain, but how much does Portugal matter in all this?
Angetenar – I don’t think it does. This is all about the opportunistic grab of Air Europa slots. They aren’t relevant in Portugal, and TAP and LATAM are pretty on top of that market (which is primarily Brazil, far less elsewhere).
Your map making skills are just gorgeous
Agreed. Brett knows how to use the Great Circle Mapper tool online better than almost anyone, and this blog was how I was first introduced to that tool.
I’m surprised that these maps haven’t been featured yet on on the Great Circle Mapper web site yet, as the site has featured maps from CF posts in the past.
Kilroy – These maps were actually from Cirium’s map-making tool and not GCMap! GCMap is way better, but Cirium has the ability to just take the data and auto-map it without entering anything.
White people always look at South America as a poor continent, yet as someone else rightly mentioned, it has a large middle-class and decent upper class which helps to fill the countless flights to/from Europe, primarily Spain.
Yes, there is much poverty in Latin America, but are you aware of the extreme poverty in the USA!?
WAMOS already has a long term operating agreement with Avianca, where they operate (or as of late last year) operated an A330 on behalf of Avianca between BOG-LAX-BOG. I used this service last year and it was fine. Avianca is an ok airline (regardless of what Westerners assume).