The air transport market in Colombia continues to experience difficulties. The Superintendency of Transportation, in charge of monitoring the sector, imposed urgent measures on Thursday on the airline Ultra Air to safeguard the provision of the service when the company is experiencing low liquidity.
It is the second low-cost Colombian airline to report financial problems in recent weeks. Viva Air suddenly suspended its operations on February 27, leaving thousands of passengers adrift in airports in Colombia and Peru, alleging a financial crisis.
Ultra Air began operations in February 2022 with domestic routes to destinations such as Bogotá, Medellín, Cali, Santa Marta and Cartagena. It has an approximate participation of 6% in the domestic market and planned to invest 30 million dollars in the next five years, create 22,000 jobs and expand its operation with routes to Mexico, Ecuador, Peru, Aruba and the United States.
The Superintendency warned in a resolution that Ultra Air presents “low liquidity, which makes it difficult to commit to short-term obligations, generating a risk of default with its creditors.”
Consequently, it ordered him to inform him about decision-making when there is an economic and operational risk that affects the provision of the service, as well as the negotiations for its capitalization and the implementation of a passenger management plan in the event of a possible cessation or suspension of operations.
After the decision of the state authority, Ultra Air reported through its press office that it will suspend ticket sales until April 30 in order to “reorganize the operation in order to comply with the passengers and avoid setbacks.”
The situation of Ultra, which has six planes, became complicated in the last hours after the airline Jet Smart canceled the intention to buy Ultra. The Minister of Transportation, Guillermo Reyes, explained on Thursday to the press that Jet Smart notified them that they withdrew from the business after discovering “factors related to the availability of their fleet, among other elements, that constitute a material change in the conditions of Ultra Air and makes it impossible to continue with the negotiations”.
Ultra Air explained the day before in a statement that they are going through a complex situation due to the increase in fuel costs, inflation, the exchange rate and the uncertainty generated by the suspension of Viva Air operations. In addition, given the Jet Smart decision, Ultra is seeking new resources from investors and bankers.
Minister Reyes assured that the state transport authorities will meet in an extraordinary way with a view to protecting the rights of Ultra passengers and preventing the same thing from happening with Viva Air, which at the time of suspending its operations had sold 460,000 tickets for the 2023, generating a crisis in the airports before the thousands of passengers who sought to continue with their itineraries.
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