Monday, November 29, 2010

LAN agrees to purchase Aries Colombia

LAN Airlines said it signed a definitive agreement to purchase 98.94% of Colombia's Aires for $12 million in cash and the assumption of $100 million in net liabilities including $18 million of bank debt. In October LAN announced that it would be taking over Colombia's second largest domestic airline, which has a 22% market share.

"This transaction will provide the opportunity for an affiliate of LAN to participate in the Colombian passenger market, one of the largest markets in South America, thus allowing for LAN and its affiliates to continue strengthening their regional presence," LAN said in a statement issued late last week.

Santiago, Chile-based LAN already operates affiliates in Argentina, Ecuador and Peru and plans to merge with Brazil's TAM under a single holding company next year. It also launched a Colombian cargo affiliate, LANCO, last year. President and COO Ignacio Cueto said LAN will be "elevating even further [Aires's] safety, quality and service standards" and predicted passengers would "benefit from the changes that will gradually be incorporated to the Aires operations."

LAN said that in "the medium term," Aires "will evaluate the expansion of international passenger operations and the advantages of any synergies it may obtain from…LANCO." It added that the LAN/Aires integration process "may involve certain operational changes such as itinerary modifications and efficiency improvements" but "will not interfere with the continuity of current operations of Aires."

(Aaron Karp - Air Transport World / ATWOnline News)

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