U.S. fund to invest $50 million in low-cost carrier Viva Air

A plane of Colombian airline Viva Air is seen at El Dorado airport in Bogota, Colombia May 8, 2019. REUTERS/Luisa Gonzalez

BOGOTA (Reuters) - Low-cost airline Viva Air, which operates in Colombia and Peru, said on Thursday it is has received a $50 million investment from U.S. capital fund the Cartesian Capital Group, which it will direct toward expansion plans.

The airline, owned by Irelandia Aviation LLC of Dublin, said last year it is spending $5.2 billion to buy 50 Airbus planes which it hopes will help make it the top low-cost carrier in Latin America. It also announced plans to expand to a third country in 2020.

Cartesian has previously invested in regional airlines like Brazil’s Gol and Argentina’s Flybondi.

“The fact that a fund of Cartesian Capital Group’s magnitude has chosen to invest in Viva Air confirms that the work we have done in Colombia and Peru is a sustainable business model and a bet on our future growth,” Chief Executive Felix Antelo said in a phone interview.

“This capital injection will allow us to keep growing, have financial stability, reach a third country in future and smoothes our path to an eventual initial public offering,” Antelo said.

Irelandia Aviation, which operates low-cost carriers Ryanair, Tiger Airways, Allegiant and VivaAerobus, will remain Viva’s majority shareholder, Antelo said.

Viva serves more than 23 destinations in Peru, Colombia and the United States, and expects to transport more than 7.5 million passengers this year.

Reporting by Luis Jaime Acosta; writing by Julia Symmes Cobb; editing by Helen Murphy and Jonathan Oatis