Business Irish

Monday 15 July 2019

Ryan in talks as he targets 2020 Viva Air stock market landing

High-flyer: Colombia-based Viva Air, which is majority-owned by Dublin-based Irelandia Aviation, carried four million passengers in 2017
High-flyer: Colombia-based Viva Air, which is majority-owned by Dublin-based Irelandia Aviation, carried four million passengers in 2017
John Mulligan

John Mulligan

Aviation entrepreneur Declan Ryan has confirmed that he hopes to float his Colombia-based Viva Air carrier on the stock market next year and held discussions this week with an investment bank.

The ultra-low-cost carrier (ULCC) operates in Colombia and Peru, flying routes in those countries and also to Miami. It carried four million passengers in 2017. It's majority-owned by Dublin-based Irelandia Aviation, which has a track record of launching low-cost carriers.

Mr Ryan, a son of the late Ryanair founder Tony Ryan, told the 'Airfinance Journal' conference in Dublin, that he met an investment bank on Tuesday, and that Viva Air is likely to undertake its initial public offering (IPO) in New York, and possibly also list in Colombia.

"We IPO all our airlines. It's the logical way to go," said Mr Ryan. "We had a pitch yesterday from one of the main banks, which is very interesting.

"We're close to it. Peru is in its second year of operation. I think ideally, 2020 would be the time for us because Peru will be bedded down. We're going to be number two both in Colombia, and in Peru at the end of this year. That's a pretty good message to get out."

Mr Kelly said that there will also be a need to educate some US investors about the Colombian market. "Listing a ULCC in Latin America will not be easy, but we have good partners and we'll list in New York and we'll probably list in Colombia."

He said the 2020 listing would be subject to a range of factors, from actions by US President Donald Trump, to oil prices. He declined to say what banks Viva Air was working with.

Viva Air's Colombian operations began in 2012, while the Peru unit was launched in 2017. In 2017, Viva Air placed an order for 50 Airbus jets in order to modernise its fleet and capture expansion opportunities in Latin America. Irelandia Aviation has previously launched or been involved in low-cost carriers including Tiger Airways in Asia, Allegiant in the United States, and VivaAerobus in Mexico.

Tiger Airways was launched in 2004, backed by Singapore Airlines and the city state's government investment vehicle. It floated in 2010. In 2016, Irelandia Aviation sold its 49pc stake in VivaAerobus to its majority shareholder, IASMA, which is the leading bus operator in Mexico. It was reported at the time that the Irelandia stake was sold for as much as $250m. The sale allowed Irelandia to focus on growing its Viva Air business.

Irelandia invested in Allegiant in 2005 as part of a wider investment consortium. The Las Vegas-based airline listed on the stock market in 2006 and Irelandia sold out of its investment in the carrier in 2007, generating a 6.5-times return in just two years. Mr Ryan said digital innovation is playing a key role in airline development.

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