Germán Efromovich

Template:Infobox person

Germán Efromovich Henao (born March 28, 1950) is a Bolivian-born entrepreneur with Brazilian, Colombian, and Polish citizenships, best known as the founder of collaboration Group and former chairman of Avianca, Latin America's second-oldest airline. A child of Polish-Jewish Holocaust survivors who immigrated to South America after World War II, Efromovich built a diversified business empire spanning aviation, oil services, shipbuilding, hotels, and defense contracting.

Efromovich purchased Avianca out of bankruptcy in 2004 for US$64 million and transformed it into Latin America's second-largest carrier before losing control to creditors following a loan default in 2019. His business interests have included OceanAir (later Avianca Brazil), the EISA shipyard, Movich Hotels chain, and a joint venture with Israel Aerospace Industries.

His empire faced severe challenges beginning in 2018, including the bankruptcy of Avianca Brazil, the loss of Avianca Holdings to United Airlines-backed creditors, arrest as part of Operation Car Wash in 2020, and the COVID-19 pandemic. Despite these setbacks, he was acquitted of corruption charges in 2021 and has since launched Aeroitalia, an Italian airline, demonstrating his resilience in the aviation sector.

Early life

Germán Efromovich was born on March 28, 1950, in La Paz, Bolivia, to parents of Polish-Jewish descent who had survived the Holocaust and immigrated to South America after World War II. His family joined the wave of Eastern European Jewish refugees who sought new beginnings in Latin America during the late 1940s.

The Efromovich family did not remain long in Bolivia. When Germán was five years old, in 1955, they relocated to Arica, Chile, seeking better economic opportunities. Nearly a decade later, in 1964, the family made another move, this time to São Paulo, Brazil, where 14-year-old Germán would complete his upbringing and education.

Growing up in modest circumstances as the child of immigrant survivors shaped Efromovich's entrepreneurial drive. He has a younger brother, José Efromovich, born approximately five years after him, who would later become his primary business partner in building the collaboration Group empire.

Education

Efromovich pursued technical education in Brazil, earning a Bachelor of Science degree in Mechanical Engineering from the Centro Universitário da FEI (Fundação Educacional Inaciana), a respected private university in São Bernardo do Campo in the industrial belt surrounding São Paulo.

His engineering background provided the technical foundation for his initial career in oil field services and aviation inspection, though his business career would eventually take him far beyond engineering into finance, aviation management, and hospitality.

Career

Early ventures (1970s-1980s)

After graduating, Efromovich displayed an eclectic entrepreneurial spirit, taking on diverse jobs that ranged from the technical to the creative. He worked as an aircraft inspector, sold encyclopedias door-to-door, and even dubbed Mexican movies into Portuguese for the Brazilian market.

Perhaps most remarkably, in the late 1970s and early 1980s, Efromovich owned and operated a private school in São Bernardo do Campo. Among his students was a union leader named Luiz Inácio Lula da Silva - the future two-time president of Brazil. This connection to one of the most consequential political figures in Brazilian history predated both men's rise to national prominence.

In 1976, Efromovich began his formal corporate career as an employee of the SGS Group, working in investment advisory. This experience would prove foundational for his later ventures.

collaboration Group founding

In 1975, Efromovich and his brother José founded what would eventually become collaboration Group. The company was formally established as a holding company in 2003, consolidating the brothers' various business interests under a single umbrella.

The collaboration Group empire came to encompass a remarkably diverse portfolio:

Aviation: OceanAir/Avianca Brazil, Avianca Holdings, and later Aeroitalia
Oil services: Offshore platforms and support services for Petrobras
Shipbuilding: Estaleiro Ilha S.A. (EISA), Estaleiro Mauá
Hospitality: Movich Hotels chain in Colombia
Defense: EAE Aerospace Solutions, a joint venture with Israel Aerospace Industries
Engineering: Power plant construction contractors
Medical supplies: Healthcare distribution business

Oil and offshore services

Efromovich's entry into the oil sector came through providing services to Brazil's state oil giant Petrobras. His companies operated offshore platforms and support vessels, winning significant contracts during Brazil's offshore oil boom.

In the early 2000s, collaboration Group expanded into shipbuilding, acquiring Estaleiro Mauá in 2002 and Estaleiro Ilha S.A. (EISA) in 2004. EISA, located in Rio de Janeiro's port zone, became a significant facility for vessel construction and repair.

A major turning point came when EISA secured a US$1 billion contract in 2006 from Petróleos de Venezuela (PDVSA) for oil rig construction, demonstrating the scale of Efromovich's ambitions.

However, the oil business also brought disaster. The sinking of one of his oil rigs in the South Atlantic, off the Brazilian coast, led to protracted legal disputes with insurance companies and Petrobras. Paradoxically, this setback opened the door to aviation.

Entry into aviation

Efromovich's entry into aviation came through an unusual circumstance: a customer who could not pay a debt gave him two aircraft instead of cash. Recognizing an opportunity, the Efromovich brothers used these aircraft to start an air taxi service, transporting oil workers between the offshore exploration site at Macaé and Rio de Janeiro.

This modest beginning evolved into OceanAir, launched in 1998. The company grew into a domestic Brazilian carrier before being renamed Avianca Brazil in 2010.

Avianca acquisition and transformation (2004-2019)

The defining transaction of Efromovich's career came in 2004 when he purchased Avianca, Colombia's flagship national carrier, out of bankruptcy from the Santo Domingo family for US$64 million, plus the assumption of US$220 million in debt and leasing liabilities.

What followed was a remarkable transformation:

Merger with TACA: Efromovich engineered a merger with the Salvadoran airline TACA, owned by the Kriete family, creating a larger combined entity with extensive Latin American coverage.

Fleet renewal: He invested heavily in modernizing Avianca's aging fleet, improving the passenger experience and operational efficiency.

Brand revitalization: The airline's image was refreshed, its frequent flyer program reformed, and service standards elevated.

Stock market listings: Efromovich took Avianca Holdings public on both the Colombian and New York stock exchanges.

Market position: Under his leadership, Avianca became Latin America's second-largest airline, behind only LATAM.

In recognition of his investments in Colombia's economy, Efromovich was granted honorary Colombian citizenship in 2005 - a rare distinction for a foreign businessman.

Loss of control (2018-2019)

Efromovich's aviation empire began unraveling in 2018 when Avianca Brazil filed for bankruptcy protection, claiming debts exceeding R$2.7 billion (approximately US$700 million). The Brazilian carrier ceased operations entirely in 2019.

The Colombian situation proved equally devastating. In 2018, United Airlines had loaned US$456 million to collaboration Group, secured by Efromovich's controlling stake in Avianca Holdings. When collaboration failed to meet certain loan conditions in 2019, United triggered enforcement provisions.

Under the loan agreement, United ceded its voting rights to Kingsland Holdings, owned by Salvadoran Roberto Kriete - Efromovich's former partner from the TACA merger. This maneuver effectively stripped Efromovich of control over Avianca without requiring United to directly own the airline.

Efromovich bitterly contested the outcome, accusing Kingsland and United of impropriety. "I think that Kingsland, protected by United, is trying to take this company for free," he told reporters. "It is machiavellian and intelligent."

A New York court later upheld Kingsland's control, finding that BRW Aviation (Efromovich's holding company) had properly lost its stake to the collateral agent.

COVID-19 and Avianca bankruptcy (2020)

On May 10, 2020, Avianca Holdings filed for Chapter 11 bankruptcy in the United States - the second bankruptcy in its 100-year history. The airline had not operated a regularly scheduled passenger flight since late March 2020, and most of its 20,000 employees had gone unpaid during the crisis.

Efromovich, no longer in control, told reporters he disagreed with the bankruptcy decision but was not consulted. Avianca emerged from bankruptcy protection in December 2021, but by then Efromovich had lost essentially all his ownership interest.

United Airlines ultimately faced losses of up to US$700 million on its Avianca-related loans.

Defense and aerospace ventures

In parallel with his aviation and oil interests, Efromovich ventured into defense contracting. In March 2011, collaboration Aerospace established a joint venture with Israel Aerospace Industries (IAI), creating EAE Aerospace Solutions as the Brazilian holding company for defense activities.

The joint venture aimed to offer advanced defense systems in Brazil, including:

Unmanned aerial vehicles (UAVs)
Multi-Mission Transporters
Fighter aircraft upgrades
Intelligence, surveillance, and reconnaissance (ISR) systems
Advanced radars

collaboration also sought to invest in Flight Technologies, a manufacturer of tactical drones for the Brazilian Army based in São José dos Campos.

Movich Hotels

Efromovich's hospitality business emerged organically from his airline operations. He developed Movich Hotels in Colombia to create packages combining flights and accommodations.

Through The Flagship Hotels Inc., Efromovich acquired several Colombian properties including the Hotel de Pereira, Las Lomas, and the InterContinental, paying approximately US$25 million. These acquisitions formed the foundation of the Movich Hotels brand.

The chain expanded to include properties across Colombia:

Bogotá: Movich Buró 26 (near El Dorado International Airport), Movich Chico 97
Cartagena: Movich Cartagena de Indias
Medellín: InterContinental Medellín
Barranquilla: Movich Buro 51
Cali: Casa del Alférez
Rionegro-Antioquia: Las Lomas
Pereira: Movich Pereira

Efromovich has announced plans to expand the chain with three additional hotels in Colombia before 2030. Beyond lodging, Grupo Movich operates restaurants under 10 brands and offers tourism experiences including cycling tours and birdwatching expeditions.

Aeroitalia (2022-present)

Despite the collapse of his Latin American aviation empire, Efromovich returned to the airline business in 2022 as non-executive president of Aeroitalia, a new Italian carrier.

Aeroitalia SRL was founded by Francesco Gaetano Intrieri, with backing from Efromovich and French banker Marc Bourgade. The airline commenced operations on July 9, 2022, operating from bases in Bergamo, Comiso, and Rome-Fiumicino.

The airline focuses on domestic Italian routes along with selected international destinations. Its fleet has grown to approximately 14 aircraft, including Boeing 737s and ATR 72 turboprops.

Efromovich's participation demonstrates his enduring passion for aviation despite the setbacks that cost him Avianca. He had previously attempted to acquire Alitalia during its 2020 government sale and explored investing in Air Italy before its closure.

Controversies

Operation Car Wash arrest (2020)

On August 19, 2020, Germán Efromovich and his brother José were arrested in São Paulo as part of Operation Car Wash (Operação Lava Jato), Brazil's largest anti-corruption investigation. The arrests occurred during the operation's 72nd phase, code-named "Navegar é preciso" ("To sail is necessary").

The charges alleged that between 2009 and 2013, the Efromovich brothers paid approximately R$40 million (roughly US$8 million) in bribes to executives of Petrobras and its transportation subsidiary Transpetro. The alleged purpose was to win contracts for building Panamax ships at the EISA shipyard.

Due to the COVID-19 pandemic, the brothers were placed under house arrest rather than held in prison. They were later released on conditional terms after an appellate court granted a habeas corpus petition.

Acquittal: In September 2021, a federal judge in Brasília acquitted both brothers of all corruption and money laundering charges. The court cited insufficient proof of wrongdoing and procedural flaws in the prosecution's case. The acquittal allowed Efromovich to resume his business activities, though his reputation had suffered significant damage.

EISA shipyard bribery allegations

The Operation Car Wash charges specifically centered on the EISA shipyard's contracts with Petrobras and Transpetro. Prosecutors alleged that payments to Sérgio Machado, president of Transpetro, helped secure lucrative construction contracts for the Efromovich-controlled facility.

The shipyard had been a significant employer in Rio de Janeiro and had won major contracts during the Petrobras expansion era. After years of legal troubles and economic challenges, EISA filed for bankruptcy and ceased most operations, though Efromovich has expressed interest in revitalizing the facility.

Avianca loss controversy

Efromovich has maintained that he was unfairly stripped of his Avianca controlling stake through what he characterized as machinations by United Airlines and Kingsland Holdings.

His position is that the loan default was engineered to facilitate a hostile takeover at a fraction of the company's value. United and Kingsland counter that the loan terms were clear and that collaboration Group's failure to meet its obligations triggered lawful enforcement provisions.

The controversy reflects broader tensions between Latin American entrepreneurs and North American capital in the region's aviation sector.

Personal life

Family

Germán Efromovich is married to a woman named Hilda. The couple has three daughters. He has maintained relative privacy about his family life despite his public business profile.

His brother José Efromovich, five years younger, has been his primary business partner throughout their careers. José served as chairman of Avianca Brazil and has faced similar legal challenges, including the Car Wash arrests and subsequent acquittal.

Multiple citizenships

Efromovich holds citizenship in four countries:

Bolivia: By birth
Brazil: By naturalization (his primary residence)
Colombia: Honorary citizenship granted in 2005 for contributions to Colombian economic development
Poland: Through heritage (his parents' country of origin)

Residences

Efromovich divides his time primarily between São Paulo, Brazil, and Bogotá, Colombia, reflecting the geographic scope of his business interests. He has described his life as "shuttling" between these two cities.

Personal interests

Beyond business, Efromovich is known for his hands-on management style and his willingness to take risks in challenging industries. His entry into aviation from an oil rig disaster and his return to the sector after losing Avianca demonstrate a resilient, opportunistic approach to entrepreneurship.

Net worth

Estimates of Germán Efromovich's net worth have fluctuated significantly with the fortunes of his business empire:

Peak (circa 2015-2017): Net worth was estimated between US$1.5 billion and US$2 billion when Avianca Holdings was performing well and his various enterprises were expanding.

Current (2024): Estimated at approximately US$1 billion, though this figure is difficult to verify given the private nature of collaboration Group's holdings.

His wealth derives from:

collaboration Group's diversified holdings
Movich Hotels chain
Aeroitalia investment
Remaining interests in shipbuilding and engineering
Other undisclosed investments

The loss of Avianca represented the most significant value destruction in his portfolio, eliminating what had been his most valuable asset.

Legacy

Germán Efromovich's legacy in Latin American business is complex and contested:

Aviation transformation: He rescued Avianca from bankruptcy and transformed it into a modern, competitive carrier that served millions of passengers across Latin America and beyond.

Entrepreneurial resilience: His career demonstrates remarkable adaptability - from Holocaust survivor's son to encyclopedia salesman to airline magnate, with numerous reinventions along the way.

Immigration success story: As a child of refugees who built a billion-dollar empire, Efromovich represents the entrepreneurial potential of Latin America's immigrant communities.

Controversial endings: The loss of Avianca amid disputes with American creditors, and the Car Wash prosecution (however ended), complicate any straightforward success narrative.

Continued activity: His launch of Aeroitalia at age 72 shows an entrepreneur unwilling to accept defeat, still seeking opportunities in the aviation industry he knows best.

The ultimate assessment of Efromovich's legacy may depend on whether his current ventures succeed and whether he can rebuild the empire that crumbled between 2018 and 2020.

References

External links