Colombia's Avianca, El Salvador's TACA to merge

[CaptW5]

UPDATE 1-Colombia's Avianca, El Salvador's TACA to merge | Markets | Markets News | Reuters (http://www.reuters.com/article/marketsNews/idINN0748094020091007?rpc=44)

Avianca owners to control two thirds of new company

* Combined revenues of around $3 billion (Adds detail on deal, CEO comments, background, byline)

By Nelson Rentaria

SAN SALVADOR, Oct 7 (Reuters) - Colombian airline Avianca and El Salvador-based TACA plan to merge their operations under a single holding company, bolstering their weight in Latin America, TACA Chief Executive Roberto Kriete said on Wednesday.

Avianca shareholders will control two thirds of the new company, with the other third in the hands of TACA owners, and the two airline brands will remain separate, Kriete said.

Both airlines are privately held. Together they would have 129 planes and more than 100 destinations in the Americas and Europe, Avianca CEO Fabio Villegas told a news conference with Kriete and other executives.

Kriete said the combined operation would have annual revenues of some $3 billion.

Avianca is controlled by Colombian-Brazilian businessman German Efromovich.

Transportes Aereos Centroamericanos (TACA), which flies to 22 countries in the Americas and nine cities in the United States, was founded in 1931 as a one-airplane operation with a contract to the Honduran government.

Owned by the Kriete family since 1961, it began forging alliances with other Central American carriers in the 1980s, including Guatemala's Aviateca and Costa Rica's Lacsa. (Reporting by Nelson Rentaria; Editing by Tim Dobbyn)

[CaptW5]

Avianca confirms 'strategic merger' with TACA

Avianca confirms 'strategic merger' with TACA (http://www.flightglobal.com/articles/2009/10/07/333194/avianca-confirms-strategic-merger-with-taca.html)

[Almendrudo]

TACA with 33% does not seems to be an alliance.....
It looks for me like Avianca ( whose owner is Brazilian ) has bought TACA.
More lay off on the horizon.....

[Panama Jack]

Interesting and surprising news. I guess it makes good sense for both Avianca and Grupo TACA if they are going to have much of a future in an increasingly global airline business.

It was only a few short years ago that I would have seen this merger going the other way around-- namely Pulpo TACA taking over Avianca as they had over a decade previously with Aviateca, Nica, LACSA, and (almost) COPA.

On a separate note, does SAM (a subsidiary of Avianca) still operate as a separate brand or is it entirely absorbed into Avianca.

It is great to see Avianca, America's oldest continuously running airline (they celebrate their 90th anniversary this year in December), doing well again!

[Immigrant]

Let see what Copa move is gonna be now?? :rolleyes:
(Lan & Copa) .......:confused:

[Heading090]

Yeah, Interesting news.... Just like immigrant said; lets see what Copa and Lan are going to do, as matter of fact I just heard a new rumour, LAN bought Aires Colombia, which out of nowhere it doubled its fleet in less than 6 months bringing along 7 737Ng so far, but they have ordered 10 in total.......ummmmmmmmmmmmm. makes you wonder!!!

this industry ............... merger are no good news for anyone here!:=

take care!!

[Immigrant]

Heading090
as matter of fact I just heard a new rumour, LAN bought Aires Colombia

It is very... very possible :confused:

I just read today on Flightglobal:

"..Publicly-traded LAN also has been looking at establishing new passenger airlines in Colombia and Brazil, perhaps through a merger or acquisition....""

Avianca confirms 'strategic merger' with TACA (http://www.flightglobal.com/articles/2009/10/07/333194/avianca-confirms-strategic-merger-with-taca.html)

--------------------------------------------------
Here is a VERY nice Break Down on Latin American aviation: :ok:


Latin American aviation: Can Avianca set the Synergies flowing?

Latin American aviation: Can Avianca set the Synergies flowing? | Centre for Asia Pacific Aviation (http://www.centreforaviation.com/news/2009/09/14/avianca-colombia-and-latin-american-aviation-can-the-synergies-start-flowing/page1)

[EagleA25]

Hello Everyone…
It’s been a while since I’ve posted anything here, so a special shout out to Panama Jack, good to see you’re still active here.
Indeed, the merger of Grupo TACA and Avianca is very exciting for the South and Central American Region, not just from a client’s perspective, but this will definitely open up employment opportunities in the region, so there will be a demand for dispatchers, mechanics, flight attendants and Command Personnel as the Holding already announced its plans of aggressive expansions in that region. Airlines like GOL and LAN will now need to take a close look at their strategic positions in and evaluate their moves very carefully. As both airlines, especially LAN, were in positions of monopolistic powers they were able to afford to make mistakes that cost them more than breadcrumbs, but big chunks. I personally believe it will come down to the one which will pay attention to details the most.
Many might disagree on his strategies and forms of management, but as the owner of Avianca and Ocean Air (BRA), Mr. German Efromovich, who in my personal opinion is a genius on how he saved Avianca from certain Death, already announced to return into the Peruvian market, this might end up in an all-out war between LAN and this new Holding. (Yes, not just “almost” dead Avianca, I thought 8 years ago Avianca was in the ER on a respirator and with no cerebral activity, veggie state, dead, artificially kept alive, about to get the plug pulled…). If he is to return into Peru I hope he learned his lesson on how to divide the controling assets of his Peruvian associates so that he will remain in control as with his previous experience he was forced to lay off more than 1200 people after a very short presence in the market. A really sad story how the Peruvian partial owner of Wyra Peru only had the intention of stealing as this airline seemed extremely promising. With many South American Employers, one of the many difficulties in low cost operations is the adequate and punctual compensation. Wyra Peru paid its pilots not only during the training their full pay check, it paid always on time, two things a S. American air carrier rarely does.
Now, I have my serious doubts that COPA would form some kind of alliance with LAN, even though it would look like COPA needs a strong and dependable partner in the region to remain afloat, but their historical association to Continental Airlines will inhibit it, even though COPA denies having any kind of loose ends with Continental anymore they still have Code-Share agreements as far as I know of. I personally believe COPA will continue to remain a small but noticeable regional carrier and rely on its strategic location to connect the South and the North of the Americas with very affordable fares.
In all of this, I do feel very sorry and angry for our colleagues on the Northern part of the Americas. I just read this article of the NY Times and pretty much describes what is going on up there:
http://www.nytimes.com/2009/10/14/business/economy/14income.html?_r=1&scp=1&sq=pilot%20officer&st=cse (http://www.nytimes.com/2009/10/14/business/economy/14income.html?_r=1&scp=1&sq=pilot%20officer&st=cse)
I do have to admit though that the U.S. Airline System and lack of supervising structure byt the Authoreties enable Airlines like Piedmont and Gulfstream Airways to gain market shares as they pay their pilots US$ 17.000 a year without their Type-rating and wonder afterwards why a Q400 ends up on top of a home instead the runway in Buffalo NY as the crews are extremely inexperienced and insufficiently trained and supervised.
Well, I will try to participate a bit more in the future in these forums and I apologize for my absence hoping I was missed dearly… ;)
My sincere regards
Eagle

[FlyingOW]

I for one am excited about the "merger". I believe joe public deserves more for his buck and an alliance as such could mean cheaper fares and better service. Monopolies like LAN Peru's domestic ops (85ish% market share), aren't good for anybody, be it the travelling public or the employees themselves. Whether it be through TACA Peru or through a newly formed carrier owned by Mr Eframovich, there is opportunity for those who are willing to take the plunge. They better have deep pockets though if they want to compete with the monster that is LAN:eek:

I also believe that the "no hire" agreement between TACA Peru and LAN Peru will finally come to an end, thus allowing us to choose between one outfit and another, in search of better T&Cs. Since the controversial agreement wages have stagnated and overall T&Cs would have declined were it not for the LPE Pilots Union. TACA Peru to this day doesn't have union representation:=

Saludos,

OW

[EagleA25]

Completely Agree with you OW... Beeing the only one is never good, not even for yourself, and having a choice will increase wages...
Lets see what the future holds...
Happy Landings...

[Immigrant]

...COPA will continue to remain a small but noticeable regional carrier

regional carrier - :}:}:ok:
that sounds funny...

I'd like to see face of Pedro Heilbron when he read this.....:D

[Lu0724]

TACA 33%
It cant be good.:confused: