Latin American airlines to merge

COLOMBIA’S Avianca and El Salvador’s Taca airlines are set to merge. Each will maintain their own identities and operate separately, although Avianca’s shareholders will receive a controlling 67 per cent of the stock in the new holding company – Holdco – while Taca’s will receive the remaining 37 per cent.The combined company will have a fleet of 130 aircraft, 13,000 employees and operate out of four hubs – Bogotá, Lima, San Salvador and San Jose (Costa Rica) to over 100 destinations in the Americas and Europe – more than any other Latin American carrier after Brazil’s TAM and GOL.“This is a historic event in aviation, because we are bringing together two of the airlines with the most operating time in the world…to create a leading group in the industry,” said Avianca chief executive Fabio Villegas.However, the merger could have serious implications for Chile’s LAN. LAN had plans to aggressively move into the Colombian market but the new partnership could stymie that forcing LAN to concentrate only Argentina, Chile, Ecuador and Peru.LAN’s executive vice-president, Enrique Cueto, said: “There has to be a value that allows for an exchange of future stocks or some type of consolidation…which is what I think is coming in the industry”.Shortly after the announcement Grupo AeroMexico said that it too would start looking for new partnerships, both regionally and globally.

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