Latin American Airlines Booming

The demand generated by the region's rapid economic growth should give ample room for air transport companies to grow.

Monday, August 23, 2010

The Latin American aeronautical industry was one of the few to record growth during the financial and economic crisis. The market, shaken by constantly growing demand, has seen big changes this year, first Colombian Avianca's purchase of Taca and later the creation of a new giant carrier with the merger of Brazil's TAM with Chilean LAN.

And there is still space for growth. Panamanian Copa is reportedly in discussions with the successful Gol from Brazil, taking advantage of their shared code agreements. These negotiations could lead to the creation of a third large regional airline.

Evidence of the market's attractiveness can be seen by the speed with which a group of investors has appeared with an offer to purchase and rescue bankrupt Mexicana.

The creation of these giant air carriers raises the question of how the continent's smaller airlines will continue to compete.

More on this topic

Taca and Copa Join Star Alliance

November 2010

Latin American airlines Avianca, Taca and Copa joined the global Star Alliance network.

The goal of these two companies joining the alliance is to integrate the ''hubs'' of Avianca-Taca (San Salvador, Lima, San José and Bogotá) and Copa (Panama City).

The incorporation of both airlines will be implemented by standardizing ticketing procedures and baggage handling, said Jaan Albrecht, CEO of Star Alliance.

Impact of TAM-LAN merger on Panama

August 2010

The country is predicted to face tough competition from the new airline giant with operations across South American skies.

Juan Carlos Pino, general manager of Panama's Tocumen International Airport, believes the merger of TAM and LAN poses a threat.

"Separately, TAM and LAN have focused on their niche markets - Brazil to Europe and South America respectively.

Colombia Approves Taca - Avianca Merger

December 2009

Colombia's aviation authority authorized the operation of a new holding conformed by airlines Avianca and Taca.

The authorization was granted by "Aeronáutica Civil", the aviation authority, which belongs to Colombia's Transportation Ministry.

"Colombian airline Avianca reported the information on Thursday, adding that the authority granted them authorization 'without reserves'", reported Elsalvador.com.

Avianca + Taca = Holdco

October 2009

Five years ago Avianca was on the brink of bankruptcy. After purchasing TACA, it is one of the largest airlines of Latin America.

The merger of both companies is likely to trigger a process of airline concentration in Latin America. AeroMéxico has already announced it will seek alliances beyond commercial agreements.

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