Latin American Airlines Booming

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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.

Source: elsalvador.com

More on this topic

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.

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.

Taca and Colombia's Avianca Discussing Alliance

October 2009

Avianca CEO Fabio Villegas announced they are negotiating a strategic alliance between both airlines.

No further detail was known about this potential alliance between Colombia's largest air company and Central America's largest air transportation group, nor if the negotiation includes acquisitions or mergers.