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Latam In Jeopardy: The Cuetos Speak Out  
User currently offlineRCS763AV From Colombia, joined Jun 2004, 4373 posts, RR: 12
Posted (2 years 10 months 3 weeks 22 hours ago) and read 3356 times:

The chilean antitrust court (Tribunal de Defensa de la Libre Competencia) is on the verge of deciding the fate of Latin America's most important airline merger in history: LATAM. Given the uncertainty of the situation, Enrique and Ignacio Cueto, both top LAN executives and members of the airline's controlling family, have given an interesting interview expressing their points of view.

http://www.elcomercio.com/negocios/T...-aerolineas-Chile_0_488951133.html

From what I could gather,

- If they don't get JJ they'll go after GOL, which they recognize is a lame second best and is probably not even interested.
- They say the merger is of vital importance to the connectivity of Chile as a country.
- They recognize that if the merger doesn't go through, JJ will probably associate themselves with someone else, and competition will be tough. They talk about JJ as the "crown jewel".
- They state that even if the merger doesn't go through, LAN's future is not at all grim. They are capable of organic growth, but it will be much tougher because the airline industry is consolidating, volume is a plus here.
- All in all, it is the first time officials from either company have even discussed the consequences of the court's ruling, which will be out very soon.

All in all, the TDLC has the most important decision in latin american aviation history on their hands. Uncertain skies lie ahead for the region it seems.

15 replies: All unread, jump to last
 
User currently offlinerobffm2 From Germany, joined Dec 2006, 1109 posts, RR: 0
Reply 1, posted (2 years 10 months 3 weeks 22 hours ago) and read 3340 times:

There is also something on Reuters about the fate of the merger:

Chile's LAN Airlines LAN.SN promised on Thursday to guarantee lower fares and more competition on key routes shared with Brazil's TAM to win approval for a proposed merger as a regulatory probe neared an end.

http://www.reuters.com/article/2011/...rger-hearing-idUSLNE74P05E20110526


User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3414 posts, RR: 4
Reply 2, posted (2 years 10 months 3 weeks 21 hours ago) and read 3311 times:

Quoting RCS763AV (Thread starter):
From what I could gather,

- If they don't get JJ they'll go after GOL, which they recognize is a lame second best and is probably not even interested.
- They say the merger is of vital importance to the connectivity of Chile as a country.
- They recognize that if the merger doesn't go through, JJ will probably associate themselves with someone else, and competition will be tough. They talk about JJ as the "crown jewel".
- They state that even if the merger doesn't go through, LAN's future is not at all grim. They are capable of organic growth, but it will be much tougher because the airline industry is consolidating, volume is a plus here.
- All in all, it is the first time officials from either company have even discussed the consequences of the court's ruling, which will be out very soon.

All in all, the TDLC has the most important decision in latin american aviation history on their hands. Uncertain skies lie ahead for the region it seems.

Very interesting stuff here.
Is the merged AV/TA larger than LA?
Surely with AV Brasil- TAM wouldn't be able to be snapped up by AV/TA or any other South American airline?
Anyone has inside info on which way the TDLC is leaning?
This merger is crucial for not just South America, but also the wider Airline Alliances such as Star Alliance and oneworld.

AA1818



God is a Trini...
User currently offlinerobffm2 From Germany, joined Dec 2006, 1109 posts, RR: 0
Reply 3, posted (2 years 10 months 3 weeks 21 hours ago) and read 3294 times:

Also quite interesting is that TAM explained the good Q1 results with positive effects from it's membership in Star Alliance.
They also just announced new code-shares with JK.


User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8488 posts, RR: 14
Reply 4, posted (2 years 10 months 3 weeks 21 hours ago) and read 3156 times:
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Quoting AA1818 (Reply 2):
Surely with AV Brasil- TAM wouldn't be able to be snapped up by AV/TA or any other South American airline?

I believe AV Brasil has something like a 2% market share in Brazil, probably not enough to concern anyone in terms of market dominance in combination with JJ.

As much as I would like to believe that the LATAM merger is in trouble ( I would by far prefer an "in house" *A solution of AV/TA/JJ to keep things more balanced between the alliances. ) I suspect that this talk is just posturing for the benefit of the regulators. I still fear very much that the deal will go through and that JJ will move to OW which would make things even uglier for South American consumers and people who need to do business in South America. (Just imagine the pricing power of LATAM combined with AA and IB/BA).



Moderation in all things ... including moderation ;-)
User currently offlineRCS763AV From Colombia, joined Jun 2004, 4373 posts, RR: 12
Reply 5, posted (2 years 10 months 3 weeks 21 hours ago) and read 3059 times:

Quoting kiwiandrew (Reply 6):
As much as I would like to believe that the LATAM merger is in trouble ( I would by far prefer an "in house" *A solution of AV/TA/JJ to keep things more balanced between the alliances. ) I suspect that this talk is just posturing for the benefit of the regulators. I still fear very much that the deal will go through and that JJ will move to OW which would make things even uglier for South American consumers and people who need to do business in South America.

That is mostly what I think, but the fact that they actually sound scared might still be something. Maybe the court will allow it but will impose severe restrictions on Chile-Brazil routes, after all they are one of the main underlying subjects on the interview.

Quoting AA1818 (Reply 2):
Is the merged AV/TA larger than LA?

No, it is a bit smaller. LATAM would be almost 4 times the size of AviancaTaca.


User currently offlinejfk777 From United States of America, joined Aug 2006, 8090 posts, RR: 7
Reply 6, posted (2 years 10 months 3 weeks 4 hours ago) and read 2248 times:
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It would be very sad if the government that killed the LATAM deal was Chile's. Brazil's I could understand since they are the more junior partner(slightly junior). Brazil does not want to loose it international airline, TAM, to foreign control. I hope this bold and trans formative merger will take place.

User currently offline777jaah From Colombia, joined Jan 2006, 1403 posts, RR: 2
Reply 7, posted (2 years 10 months 3 weeks 3 hours ago) and read 2240 times:

Thanks for the link, very interesting indeed.

Quoting RCS763AV (Reply 5):
but the fact that they actually sound scared might still be something

This speaks very well of TDLC, which it seems it could make a decision leaned to protect the customer, but letting the merger go through, which is a wise decision IMO. Mr Cueto might think that, and this is nothing but a message to the TDLC, something in the likes of stick and carrot kind of thing......let the merger go through, and I'll promise not to hurt the customers.

Quoting RCS763AV (Reply 5):
Maybe the court will allow it but will impose severe restrictions on Chile-Brazil routes, after all they are one of the main underlying subjects on the interview.

If the TDLC acts in a wise manner, thats what we might see in the future.

Quoting AA1818 (Reply 2):
Anyone has inside info on which way the TDLC is leaning?

If anyone has any kind of inside oinfo, trust me it won't be discussed in such a public forum like a.net. I even think Mr Cueto doesn't know really where the TDLC is leaning. I'm pretty sure chilean authorities are very serious about leaking info in this kind of cases and basically, in every thing they shouldn't.

777jaah



Next flights: AV BOG-ADZ-BOG, AV-UA BOG-IAD-ORD-IAD-BOG, BOG-FLL-BOG, LA BOG-MIA-BOG J
User currently offlineOksman From Brazil, joined Apr 2011, 111 posts, RR: 0
Reply 8, posted (2 years 10 months 2 weeks 6 days 16 hours ago) and read 1889 times:

Quoting kiwiandrew (Reply 4):
As much as I would like to believe that the LATAM merger is in trouble ( I would by far prefer an "in house" *A solution of AV/TA/JJ to keep things more balanced between the alliances. ) I suspect that this talk is just posturing for the benefit of the regulators. I still fear very much that the deal will go through and that JJ will move to OW which would make things even uglier for South American consumers and people who need to do business in South America. (Just imagine the pricing power of LATAM combined with AA and IB/BA).

Totally agree. And if they go for OW, there would be no big *A hubs in South America anymore....for me that is one of the biggest concerns.


User currently offlineRCS763AV From Colombia, joined Jun 2004, 4373 posts, RR: 12
Reply 9, posted (2 years 10 months 2 weeks 6 days 15 hours ago) and read 1816 times:

Quoting Oksman (Reply 8):
Totally agree. And if they go for OW, there would be no big *A hubs in South America anymore....for me that is one of the biggest concerns.

I beg to differ, but BOG, the continent's second largest airport happens to be a hub for two future star alliance carriers, one of considerable size and the other offering a decently sized operation.


User currently offlineMCOGVADCA From China, joined Oct 2006, 446 posts, RR: 0
Reply 10, posted (2 years 10 months 2 weeks 6 days 13 hours ago) and read 1757 times:

If the LATAM merger goes through and the combined enitty opts for OneWorld, what will happen to the current Portugal-Brazil service? TAP and TAM currently have a very close codeshare agreement for Portugal-Brazil routes with TAP operating all of the services. Would this arrangement remain intact? If not, I don't know where TAM would find the planes to adequately serve even the Por.-Bra. trunk routes, let alone all of the ten cities that TAP currently serves in Brazil.


12 months:pvg hkg bkk doh mxp nce zrh iah lhr gva iad clt lax nrt sin mnl ceb del jai gay vns szx zuh mfm icn can
User currently offlineual777uk From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 11, posted (2 years 10 months 2 weeks 6 days 7 hours ago) and read 1537 times:

Quoting jfk777 (Reply 6):
I hope this bold and trans formative merger will take place.

I don't, well not if it means JJ going to OW. Having flown JJ in J two times in the last couple of months to GIG from LHR, I really enjoyed the flights and with JJ now seeing the benefits of Star, I hope that sways them to stay with Star or not merge.


User currently offlineOksman From Brazil, joined Apr 2011, 111 posts, RR: 0
Reply 12, posted (2 years 10 months 2 weeks 6 days 6 hours ago) and read 1472 times:

Quoting RCS763AV (Reply 9):
I beg to differ, but BOG, the continent's second largest airport happens to be a hub for two future star alliance carriers, one of considerable size and the other offering a decently sized operation.

I see your point, but is it wise to give up GRU?


User currently offlinerobffm2 From Germany, joined Dec 2006, 1109 posts, RR: 0
Reply 13, posted (2 years 10 months 2 weeks 6 days 5 hours ago) and read 1416 times:

Quoting RCS763AV (Reply 9):
BOG, the continent's second largest airport

Still surprised by BOG's traffic.

According to wikipedia (link) they managed to increase pax numbers by 27% in 2010 (18.9 m). But GRU also did well with an increase of 23.5 % (26,8 m).

With a difference of almost 8 m and with 10 of the 20 most busiest latam airports in Brazil I would say GRU is much more important to any airline/alliance then BOG (or any other airport in that region).


User currently offlineOksman From Brazil, joined Apr 2011, 111 posts, RR: 0
Reply 14, posted (2 years 10 months 2 weeks 6 days 4 hours ago) and read 1365 times:

Quoting robffm2 (Reply 13):
With a difference of almost 8 m and with 10 of the 20 most busiest latam airports in Brazil I would say GRU is much more important to any airline/alliance then BOG (or any other airport in that region).

Agreed!


User currently offlineRCS763AV From Colombia, joined Jun 2004, 4373 posts, RR: 12
Reply 15, posted (2 years 10 months 2 weeks 6 days 1 hour ago) and read 1204 times:

Quoting robffm2 (Reply 13):
With a difference of almost 8 m and with 10 of the 20 most busiest latam airports in Brazil I would say GRU is much more important to any airline/alliance then BOG (or any other airport in that region).

Of course.

Quoting robffm2 (Reply 13):
Still surprised by BOG's traffic.

Colombia has the second largest population and third largest economy in the continent with dynamic growth. Bogotá is a metropolitan area of 8.5 million people which accounts for 20% or the country's GDP. The low--cost model made flights cheaper for the flying public, even cheaper than taking a bus to many destinations so people started flying. Plus, the airport is the hub for most of colombia's sizeable domestic market. Not that surprising I might say.

Quoting Oksman (Reply 12):
I see your point, but is it wise to give up GRU?

It's not like it's their decision.

Quoting Oksman (Reply 8):
there would be no big *A hubs in South America anymore

And this is what i'm not agreeing with. Yes, GRU might be a large hub and serves the continet's largest market, but BOG is no small andean focus city, and serves the major hub of of northern south america which has a combined population of 125 million people. You have to add TA's operation at LIM too, which although small, is growing at a fast pace, and serves the southern cone.


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