Who Owns Avianca Holdings Company?

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Who Owns Avianca Holdings Company?

Understanding Avianca Group International Limited's ownership is key to grasping its strategic direction and accountability in the aviation industry. A significant event that reshaped its ownership was its emergence from Chapter 11 bankruptcy in December 2021.

Avianca, founded in 1919, is a major Latin American airline headquartered in Bogotá, Colombia, with its registered office in St Albans, England. It serves 81 destinations with over 700 daily flights, utilizing a fleet of 149 aircraft as of December 2024.

Exploring Avianca's ownership reveals its journey from early backers to current major investors and public shareholders, influenced by events like its bankruptcy and strategic alliances. This analysis includes understanding its Avianca Holdings BCG Matrix.

Avianca Holdings' origins date back to December 5, 1919, with the founding of Sociedad Colombo-Alemana de Transportes Aéreos (SCADTA) in Barranquilla, Colombia. This early venture was a collaboration between Colombian businessmen and German immigrants, laying the groundwork for what would become a major airline.

Founding of SCADTA

SCADTA was established in Barranquilla, Colombia, on December 5, 1919. The airline began operations with Junkers F.13 aircraft, initially transporting mail.

Key Colombian Founders

Prominent Colombian figures involved in SCADTA's inception included Ernesto Cortissoz Alvarez-Correa, who served as the first President, along with Rafael María Palacio, Cristóbal Restrepo, Jacobo Correa, and Aristides Noguera.

German Involvement

German immigrants Werner Kämmerer, Stuart Hosie, and Albert Tietjen were also instrumental in the founding of SCADTA. Their expertise contributed to the airline's early development.

Early Financial Backer

German scientist and philanthropist Peter von Bauer was a significant early supporter. He provided capital, expertise, and an aircraft, securing crucial airmail concessions in 1922.

Shift in Ownership

In the early 1940s, Peter von Bauer sold his SCADTA shares to Pan American Airways (Pan Am). Pan Am had already gained control of SCADTA by 1930, integrating it into its network.

Formation of Avianca

On June 14, 1940, SCADTA merged with the regional Colombian airline SACO. This merger resulted in the formation of Aerovías Nacionales de Colombia S.A., known today as Avianca.

The early ownership of Avianca Holdings, then known as SCADTA, was a blend of Colombian entrepreneurial spirit and German technical and financial contributions. Peter von Bauer's early backing was pivotal, providing essential capital and securing vital government concessions for airmail transport, which fueled the airline's initial growth. This period saw SCADTA operating with Junkers F.13 aircraft, establishing its first routes and solidifying its presence in the nascent aviation industry. The subsequent acquisition by Pan American Airways marked a significant transition, integrating SCADTA into a larger international network and leading to the eventual formation of Avianca through a merger. Understanding this Growth Strategy of Avianca Holdings provides context for its evolution.

Key Milestones in Early Ownership

The initial phase of Avianca's ownership history was characterized by foundational partnerships and strategic acquisitions that shaped its trajectory.

• Establishment of SCADTA in 1919 by Colombian and German stakeholders.
• Peter von Bauer's crucial financial support and airmail concessions.
• Pan American Airways' acquisition of SCADTA shares in the early 1940s.
• The 1940 merger of SCADTA and SACO to form Avianca.

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Avianca Holdings' ownership has seen significant shifts, notably following its 2010 merger with TACA Airlines and its subsequent emergence from Chapter 11 bankruptcy in 2021. These events reshaped the company's stakeholder landscape, leading to new controlling entities.

The ownership evolution of Avianca Holdings is a dynamic narrative, marked by strategic mergers and critical financial restructurings. Initially, Synergy Group, founded by Germán Efromovich, was the sole owner. The 2010 merger with TACA Airlines established Avianca Holdings, with Synergy Group retaining a substantial stake. A pivotal moment arrived with the company's Chapter 11 bankruptcy filing in May 2020, a consequence of the global pandemic's impact on air travel. This led to the delisting of Avianca Holdings S.A. from the New York Stock Exchange in May 2020, though its preferred shares continued to trade on the Colombian Stock Exchange. The successful completion of its financial restructuring in December 2021 marked a new chapter.

Abra Group's Ascendancy

In May 2022, a new holding company, Abra Group Limited, was established. This entity was formed by the primary shareholders of Avianca and the controlling shareholder of Brazil's GOL Linhas Aéreas Inteligentes SA. Abra Group, incorporated in England, now oversees both Avianca and GOL, unifying their brands under a single ownership structure while maintaining their operational independence.

• Abra Group Limited is the current parent company of Avianca.
• It was formed in May 2022.
• Abra Group also controls GOL Linhas Aéreas Inteligentes SA.
• Avianca Holdings ownership is now under private ownership by Abra Group.
• This structure aims for greater efficiencies and investments.

Abra Group's influence extends beyond Avianca and GOL. The group holds a non-controlling 100% economic interest in Viva's operations in Colombia and Peru. Additionally, it possesses convertible debt representing a minority stake in Chile's Sky Airline. Demonstrating a forward-looking strategy, as of July 2024, Abra Group has also secured a strategic stake in Wamos Air, a Spanish charter and wet-lease specialist. Furthermore, it has entered into a joint venture with Volotea, a European low-cost carrier, to bolster its presence in the South America-Spain market. This expansion signifies Abra Group's commitment to consolidating its position within the aviation sector. For a deeper understanding of the company's past, one can refer to the Brief History of Avianca Holdings.

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The current Board of Directors for Avianca Group International Limited is comprised of individuals representing significant stakeholders and independent members. Roberto Kriete holds the position of Chairman of the Executive Board, bringing experience from his previous roles with Grupo TACA and Volaris.

While the specific voting structure of Avianca Group International Limited under Abra Group is not publicly detailed, Abra Group operates under a co-controlled model. This means that the principal shareholders of Avianca and the majority shareholder of GOL share control. Roberto Kriete, a significant figure from Avianca's historical ownership through Kingsland Holdings, serves as Abra's Chairman. Constantino de Oliveira Júnior, the founder of GOL, serves as Abra's CEO, underscoring this shared governance arrangement. Avianca, formerly Avianca Holdings, was delisted from the NYSE in May 2020 following its Chapter 11 bankruptcy filing, transitioning to private ownership under Abra Group.

Avianca Holdings Ownership Structure

Avianca Holdings is now privately owned under the Abra Group umbrella. This structure reflects a co-control arrangement between key investors of Avianca and GOL.

• Abra Group is the parent company.
• Co-control is shared by principal Avianca shareholders and the majority shareholder of GOL.
• Roberto Kriete is Chairman of Abra Group.
• Constantino de Oliveira Júnior is CEO of Abra Group.
• Avianca Airlines is part of this larger holding structure.

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Avianca Holdings' ownership landscape has undergone significant transformation over the last few years, largely influenced by its Chapter 11 bankruptcy proceedings and the subsequent establishment of Abra Group. This restructuring has reshaped its stakeholder base and strategic direction.

The creation of Abra Group Limited in May 2022 marked a pivotal moment, uniting the principal shareholders of Avianca with the controlling shareholder of GOL. This strategic alliance aims to foster a leading pan-Latin American air transportation network, allowing for enhanced operational efficiencies and coordinated investments while preserving the distinct brands and operations of both airlines. Abra Group also secured a non-controlling economic interest in Viva's Colombian and Peruvian operations and a minority investment in Sky Airline via convertible debt. Further expanding its international footprint, Abra Group took a strategic stake in Wamos Air and formed a joint venture with Volotea in July 2024, targeting the South America-Spain market and potential opportunities arising from the IAG-Air Europa merger.

Avianca Group's Financial Health Post-Restructuring

Avianca Group reported a net income of $117 million for the full year 2024. Operating revenues saw a growth of 10.6%, reaching $5,275 million.

Q1 2025 Performance Indicators

For the first quarter of 2025, Avianca achieved $330 million in EBITDAR, a 21.7% increase year-over-year. Total operating revenues were $1,378 million, up 8.9% from the previous year.

Capital Expenditures and Cash Flow Outlook

The company anticipates negative free cash flow for both 2024 and 2025. This is attributed to increased capital expenditures, projected at $400 million for 2024 and $575 million for 2025, supporting fleet modernization and business expansion.

Current Ownership Status

Avianca Group International Limited is currently a privately held entity. This structure allows for strategic flexibility and focused investment in its growth initiatives, as detailed in the Mission, Vision & Core Values of Avianca Holdings.

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