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Carlos Slim Wants Out Of Volaris  
User currently offlinenetjetsintl From United States of America, joined exactly 5 years ago today! , 593 posts, RR: 0
Posted (4 years 3 months 1 day 22 hours ago) and read 5602 times:

Why is it that billionaires and airlines don't go together...

Carlos Slim, the world's richest man and Emilio Azcarraga (media tycoon) want to sell their stakes in Volaris..... Rival Interjet offers to buy Volaris for $350million, but the remaining stake holders ( Grupo TACA & Discovery Americas) rejected the offer....

too bad, Volaris is actually doing good... there go Volaris' "deep-pockets backing"

http://www.reuters.com/article/idUSN...edName=cyclicalConsumerGoodsSector

21 replies: All unread, jump to last
 
User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8541 posts, RR: 13
Reply 1, posted (4 years 3 months 1 day 22 hours ago) and read 5564 times:
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Quoting netjetsintl (Thread starter):
Why is it that billionaires and airlines don't go together...

Perhaps because billionaires want to stay billionaires and in general the airline industry is not a good way for them to do that  

It will be interesting to see what happens next , what is the maximum limit for a foreign carrier to own in a Mexican airline ? Could TACA increase their stake or are they already at the maximum permitted ?



Moderation in all things ... including moderation ;-)
User currently offlinenetjetsintl From United States of America, joined exactly 5 years ago today! , 593 posts, RR: 0
Reply 2, posted (4 years 3 months 1 day 22 hours ago) and read 5525 times:

Quoting kiwiandrew (Reply 1):
It will be interesting to see what happens next , what is the maximum limit for a foreign carrier to own in a Mexican airline ? Could TACA increase their stake or are they already at the maximum permitted ?

there is a limit as far as how much a foreign company and/or person can own in Mexico....not sure if its 25% or 50%, but I certainly doubt the Mexican government will let TACA buy a bigger stake.... The Mexican government tends to over-protect a bit when it comes to this things


User currently offlineLAXintl From United States of America, joined May 2000, 24806 posts, RR: 46
Reply 3, posted (4 years 3 months 1 day 22 hours ago) and read 5492 times:

Well probably does not help Carlos Slim has taken several large investment hits including a $360mil real estate investment default with a partner here in Los Angeles.


From the desert to the sea, to all of Southern California
User currently offlineFly2HMO From , joined Dec 1969, posts, RR:
Reply 4, posted (4 years 3 months 1 day 22 hours ago) and read 5475 times:

Quoting kiwiandrew (Reply 1):

It will be interesting to see what happens next , what is the maximum limit for a foreign carrier to own in a Mexican airline ?

It's 49% IIRC.

Quoting LAXintl (Reply 3):
Well probably does not help Carlos Slim has taken several large investment hits including a $360mil real estate investment default with a partner here in Los Angeles.

Pfsssh! What's $360mill when you got another $54 billion to play with 


User currently offlinenetjetsintl From United States of America, joined exactly 5 years ago today! , 593 posts, RR: 0
Reply 5, posted (4 years 3 months 1 day 22 hours ago) and read 5416 times:

Quoting LAXintl (Reply 3):
Well probably does not help Carlos Slim has taken several large investment hits including a $360mil real estate investment default with a partner here in Los Angeles.

he's also buying a building in downtown Manhattan that used to belong to Goldman Sachs and another chunck of the NYTimes..he is willing to buy into anything but wants out of Aviation?? maybe he's thinking of Warren Buffet and his US Airways debacle


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2346 posts, RR: 1
Reply 6, posted (4 years 3 months 1 day 20 hours ago) and read 5253 times:

Can't say I'd feel sorry for Volaris as they're now partnering with WN.

Could Volaris fit within the MX or AM network?



The 747: The hands who designed it were guided by god.
User currently offlineFly2HMO From , joined Dec 1969, posts, RR:
Reply 7, posted (4 years 3 months 1 day 19 hours ago) and read 5121 times:

Quoting Byrdluvs747 (Reply 6):
Could Volaris fit within the MX or AM network?

Seriously doubt it. There would be lots of overlap.


User currently offlinenetjetsintl From United States of America, joined exactly 5 years ago today! , 593 posts, RR: 0
Reply 8, posted (4 years 3 months 1 day 8 hours ago) and read 4835 times:

Quoting Byrdluvs747 (Reply 6):
Could Volaris fit within the MX or AM network?

definetly not Aeromexico, Volaris operates an all Airbus fleet, AM all Boeing.... besides Volaris seems to be doing all right alone, I hope they stay alone

Mexicana and Interjet would make a better partner if it came to that


User currently offlineEddieDude From Mexico, joined Nov 2003, 7561 posts, RR: 43
Reply 9, posted (4 years 3 months 1 day 7 hours ago) and read 4762 times:

Slim and Azcárraga want out. Aviation is not their core business. Plus, the relationship between them has gone sour due to the whole Telmex - Televisa competition in the telecoms market.

Interjet made an offer for the entire company valuing it at 350 million, which is a very healthy return on the investment made by the owners (Slim's SINCA Inbursa; a vehicle of Televisa/Azcárraga; Discovery Fund Americas, which is a private equity fund; and the Kriete family, who are major AV-TA investors). However, Discovery and the Krietes decided to exercise their rights to block the transaction and, instead, will now have to buy the Slim and Azcárraga shares, but for that they need to find a Mexican investor because they are prevented by local foreign investments law to control the company.

Last time I checked, foreign investors were restricted to 25% of the voting equity of an airline in Mexico. There are mechanisms that comply with foreign investments law that allow foreign investors to increase their participation in airlines to a higher percentage so long as that is achieved through the acquisition of non-voting shares. An application for authorization needs to be submitted to the foreign investments authorities. I believe the authorities' criterion is to allow for not more than 49% foreign investment on a fully diluted basis (with no more than 25% of voting shares). As I mentioned, this may have changed, but I would not think so.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineas739x From United States of America, joined Apr 2003, 6087 posts, RR: 24
Reply 10, posted (4 years 3 months 1 day 6 hours ago) and read 4692 times:

Can I be the first to say "there is a SLIM chance anyone else would want to buy the stakes in the airline!"


"Some pilots avoid storm cells and some play connect the dots!"
User currently offline413X3 From United States of America, joined Jul 2008, 1983 posts, RR: 0
Reply 11, posted (4 years 3 months 1 day 4 hours ago) and read 4545 times:

Why? if the airline is healthy financially, and giving returns, even in this economy, who wouldn't want to invest?

User currently offlineas739x From United States of America, joined Apr 2003, 6087 posts, RR: 24
Reply 12, posted (4 years 3 months 1 day 3 hours ago) and read 4472 times:

Quoting 413X3 (Reply 11):

No reason 413x3......just wanted to say "Slim" chance!



"Some pilots avoid storm cells and some play connect the dots!"
User currently offlinepoint2point From United States of America, joined Mar 2010, 2740 posts, RR: 1
Reply 13, posted (4 years 3 months 1 day 3 hours ago) and read 4439 times:

I don't know too much about Volaris, but when you look at their online route map, it seems somewhat puzzling. For example, it you want to go from Chihuahua to Hermosillo, you get routed through Toluca. Or if you want to go from San Francisco to Hermosillo, you get routed through Guadalajara. Or Leon to Monterrey, you get routed through Tijuana.
Just sayin....


User currently offlineEddieDude From Mexico, joined Nov 2003, 7561 posts, RR: 43
Reply 14, posted (4 years 3 months 1 day 3 hours ago) and read 4391 times:

I think the most relevant aspect of the current Volaris situation is not why Slim wants to sell his stake, but more interestingly that Interjet missed the chance of forming a major LCC to possibly take the lead in the domestic market over AM and MX. I guess Discovery and the Krietes still see a lot of upside with Volaris, but the marketplace is quite competitive, so it will not be easy to grow rapidly and stay profitable. I wonder whether Discovery and the Krietes could still negotiate a merger with rather than an acquisition by Interjet in order to stay as equityholders in the resulting entity.

Quoting point2point (Reply 13):
I don't know too much about Volaris, but when you look at their online route map, it seems somewhat puzzling. For example, it you want to go from Chihuahua to Hermosillo, you get routed through Toluca. Or if you want to go from San Francisco to Hermosillo, you get routed through Guadalajara. Or Leon to Monterrey, you get routed through Tijuana.
Just sayin....

Well, as a LCC, I don't think they want to function as a hub-and-spoke airline. In a way, they are like you... point2point. :p In any event, I expect them to grow more over the years, and this will probably see some more point to point flights between main cities on the one hand and secondary cities (i.e., not MEX/TLC, GDL, TIJ and MTY) on the other, or between secondary cities without having to stop or connect at a hub.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlinenwafflyer From United States of America, joined Jul 2004, 1050 posts, RR: 2
Reply 15, posted (4 years 3 months 1 day ago) and read 4244 times:

A bit off topic, but why did Alma fail? A few years ago, it seemed like they were much stronger than Interjet or Volaris

User currently offlinenetjetsintl From United States of America, joined exactly 5 years ago today! , 593 posts, RR: 0
Reply 16, posted (4 years 3 months 22 hours ago) and read 4183 times:

Quoting nwafflyer (Reply 15):
A bit off topic, but why did Alma fail? A few years ago, it seemed like they were much stronger than Interjet or Volaris

i know some will disagree, but ALMA failed because they used RJs... RJs cannot make money on their own, they need a bigger cousin (737/A319, etc) to suplement... we all remember Air Independence and Express Jet when they tried their own brand


User currently offlineEddieDude From Mexico, joined Nov 2003, 7561 posts, RR: 43
Reply 17, posted (4 years 3 months 7 hours ago) and read 3960 times:

Quoting netjetsintl (Reply 16):
i know some will disagree, but ALMA failed because they used RJs... RJs cannot make money on their own, they need a bigger cousin (737/A319, etc) to suplement... we all remember Air Independence and Express Jet when they tried their own brand

I have heard that several times. I guess I concur... I also wonder if their problems were also related to management inexperience (not saying that was the case, just wondering). It is a real shame because they seemed to be a nice little airline, and I was looking forward to flying with them some time. At least, a number of pilots and crew members found homes with MX Link (some aircraft too, if I am not mistaken).



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineLAXintl From United States of America, joined May 2000, 24806 posts, RR: 46
Reply 18, posted (4 years 3 months 6 hours ago) and read 3889 times:

I've heard a biggest reason behinds ALMA's demise was simply fuel cost combined with the inefficiencies of the RJ.

Remember fuel was on its upward trajectory in 2008 when ALMA shut down and set record peak the same year.




From the desert to the sea, to all of Southern California
User currently offlinepzurita1 From Greenland, joined Sep 2002, 1392 posts, RR: 14
Reply 19, posted (4 years 3 months 2 hours ago) and read 3788 times:

Quoting EddieDude (Reply 17):
I also wonder if their problems were also related to management inexperience

Not really. Many good people were previus Aerolitoral and Mexicana employees. Many of them continued in the airline sector because good years of experiencia.
Mostly high fuel prices and inflexibility from RJ are to be pointed out.



Next flight: IAH-DBX-MRU-ANT
User currently offlineCessnaLady From Mexico, joined May 2004, 310 posts, RR: 4
Reply 20, posted (4 years 2 months 4 weeks 1 day 18 hours ago) and read 3629 times:

Anybody here knows whether Volaris is a publicly-traded company? If so, I wonder if Interjet (or anybody else for that matter, being a Mexican national) can mount a hostile takeover through after the rejection of Discovery and the Kriete family...

User currently offlineEddieDude From Mexico, joined Nov 2003, 7561 posts, RR: 43
Reply 21, posted (4 years 2 months 4 weeks 1 day 18 hours ago) and read 3604 times:

No, it is not. None of the airlines is a public company at the moment.


Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
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