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Chile Decides Latam Merger Today...  
User currently offlineeastern023 From United States of America, joined Jul 2006, 871 posts, RR: 0
Posted (2 years 12 months 3 days 16 hours ago) and read 2472 times:

Today Chilean courts are expected to reject the request of PAL Airlines (5P) to declare unconstitutional the merger between LAN and TAM. Brazil has pretty much already given the go ahead, so this merger is now expected to be completed later this year or early 2012.
(http://news.airwise.com/story/view/1313114728.html)
If this happens, we are now closer to a final deal and to know whether TAM is headed to Oneworld and out of star or not. Does anyone know what the anti-trust mitigation agreement is to approve the merger? I know is related to the SCL-GIG and SCL-GRU routes and frequencies plus slot scramble at GRU, but I do not know the details....Would this give 5P access to GRU?


AA will Rise Again!
10 replies: All unread, jump to last
 
User currently offlineEddieDude From Mexico, joined Nov 2003, 7569 posts, RR: 43
Reply 1, posted (2 years 12 months 3 days 16 hours ago) and read 2365 times:

Quoting eastern023 (Thread starter):
we are now closer to a final deal and to know whether TAM is headed to Oneworld and out of star or not.

It seems we will be closer to a deal. Not so sure we will be closer to an alliance decision. The two management teams have mentioned that they will only make a decision once the companies are combined, so a lot of things need to happen (such as all other regulatory authorizations, the transfers of the shares, etc.) before they come to that point.

Quoting eastern023 (Thread starter):
nti-trust mitigation agreement is to approve the merger? I know is related to the SCL-GIG and SCL-GRU routes and frequencies plus slot scramble at GRU, but I do not know the details

I don't know the details either, but yeah, mitigation measures should aim to give competitors unrestricted access to the markets where the combination will result in a monopoly or a very high concentration.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently onlinekiwiandrew From New Zealand, joined Jun 2005, 8549 posts, RR: 13
Reply 2, posted (2 years 12 months 3 days 13 hours ago) and read 2154 times:
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Quoting eastern023 (Thread starter):
If this happens, we are now closer to a final deal and to know whether TAM is headed to Oneworld and out of star or not

The two are not necessarily the same issue. The regulatory authorities could (and probably will) approve the LATAM merger on the basis that it has minimal effect on competition because they are looking purely at the combination of LAN and TAM. If TAM later applies to join OW regulatory authorities in the relevant countries would have to review whether the combination of LATAM/AA and the IAG group was anti-competitive, I think a strong case could be put that it would be. It will be interesting to see what happens if LATAM is approved but subsequently TAM moving to OW is disapproved. Since I can't see LAN moving to *A (except in the less than likely event that AA were to belly up, and even then, the combo of LATAM, Copa and Avianca/TACA in the same alliance would also create serious anti-competitive issues) LATAM could, theoretically, be left with a situation where they have no choice but to remain split over two alliances (or do something completely out of left field and move the combined carrier to Skyteam)



Moderation in all things ... including moderation ;-)
User currently offlinecommavia From United States of America, joined Apr 2005, 11523 posts, RR: 61
Reply 3, posted (2 years 12 months 3 days 13 hours ago) and read 2104 times:

Quoting EddieDude (Reply 1):
It seems we will be closer to a deal. Not so sure we will be closer to an alliance decision.

I agree that we may now be closer to the merger being completed, but not necessarily the alliance decision.

However, that being said, I personally contend that, assuming the following:

* Merger does happen,
* Barring any major dramatic tectonic shifts in the competitive dynamics within the regionor among the airline alliances globally
* LATAM determines to ultimately consolidate in one alliance versus split over two

I do not see how LATAM ends up anywhere but oneworld. Star's traffic flows to/from Europe can generally be fairly easily replicated by oneworld, and the traffic flows to/from North America are, needless to say, infinitely better with oneworld (AA) over Star - AA's big gateways are perfectly aligned with those of LAN/TAM. SkyTeam I don't see being a meaningful contribution to LATAM either way. And when it comes to regionally, I just do not see LAN ever being in the same alliance with Aerolineas (future SkyTeam), or Avianca-TACA (Star).

Quoting kiwiandrew (Reply 2):
If TAM later applies to join OW regulatory authorities in the relevant countries would have to review whether the combination of LATAM/AA and the IAG group was anti-competitive, I think a strong case could be put that it would be.

A case could be made, although it is notable that in recent years - in various settings around the world - ATI/JV alliances among airlines have been approved with cumulative market concentrations greater than what AA/TAM will have in the U.S.-Brazil market.

Quoting kiwiandrew (Reply 2):
It will be interesting to see what happens if LATAM is approved but subsequently TAM moving to OW is disapproved.

I never really understood this point - does the Brazilian government get to "approve" TAM's alliance decisions? I can understand Brazilian regulatory authorities getting approval over TAM forming bilateral alliances, and certainly over ATI/JVs, but does Brazil get to veto TAM's (LATAM's) alliance choice?


User currently onlinekiwiandrew From New Zealand, joined Jun 2005, 8549 posts, RR: 13
Reply 4, posted (2 years 12 months 3 days 13 hours ago) and read 2033 times:
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Quoting commavia (Reply 3):
I can understand Brazilian regulatory authorities getting approval over TAM forming bilateral alliances, and certainly over ATI/JVs, but does Brazil get to veto TAM's (LATAM's) alliance choice?

If you can understand the Brazilian authorities getting to approve bilateral alliances then tell me what happens if the Brazilian Government declines to permit TAM to enter into a bilateral reciprocal frequent flyer arrangement with SA)">AA or IB? Since those are pre-requisites for membership in SA)">OW if those bilateral arrangements were to be declined, SA)">OW membership is indirectly vetoed.


In any case, while I don't know what powers the Brazilian regulatory authorities have I do know of cases where other national governments have taken a hand in approving or disapproving alliance membership. The South African authorities were quite reluctant to permit SA to join *A, in the end they approved membership for a limited period ( 5 years, IIRC) and they have just rolled that over again for another limited period. Likewise, just consider the situation in India at the moment, where *A wanted a guarantee that the Indian authorities would not block 9W from joining *A. Why would they ask for such a guarantee if the authorities had no power to block alliance membership.

Government regulation still plays a very strong part in the airline industry, my golden rule would be to never assume that something will be approved until it has been.


Please note that I am not saying that TAM's move to OW will be blocked, just that approval for such a move is a completely separate process to approval for LAN's takeover of TAM and that if one is approved it does not automatically follow that the other will also be approved.

[Edited 2011-08-24 12:50:29]


Moderation in all things ... including moderation ;-)
User currently offlinepdpsol From United States of America, joined Feb 2004, 1113 posts, RR: 5
Reply 5, posted (2 years 12 months 3 days 12 hours ago) and read 1954 times:

A couple of things, Chile's TDLC anti trust regulator has decided to delay its decision to authorize the transaction by one week, apparently to give PAL additional time to make its case. The regulator is expected to authorize LA's acquisition of JJ in a stock-for-stock merger.

Here is the article from Reuters:

http://www.reuters.com/article/2011/...&feedName=industrialsSector&rpc=43

Regarding the decision to have JJ abandon StarAlliance and join oneWorld, LA's management has I believe made it clear it wishes to make this decision sometime next year. One would imagine they have been in communication with countless lawyers and advisers in Brasil, Chile and other major markets to determine what anti trust issues need to be dealt with.

I cannot imagine LA wants to have JJ in a separate alliance.


User currently offlineAmsterdam From Netherlands, joined Mar 2011, 90 posts, RR: 0
Reply 6, posted (2 years 12 months 3 days 12 hours ago) and read 1939 times:

Many airlines have code-shares and other agreements with airlines from an other alliance.

But that said, Skyteam should really make an effort for GOL.


User currently offlineeastern023 From United States of America, joined Jul 2006, 871 posts, RR: 0
Reply 7, posted (2 years 12 months 3 days 12 hours ago) and read 1874 times:

Quoting pdpsol (Reply 5):
I cannot imagine LA wants to have JJ in a separate alliance.

I agree, if I recall correctly on most of the biggest mergers or aquisitions the "buyer" airline has dragged the target airline back to their alliance. I can think of Swiss/LH (Swiss was seriously flirting with one world but ended at star because of the buy out) AC swallowed CP and stayed with star...I am sure there are more similar examples....Makes sense no?

I think the writting is on the wall OneWorld knows it and so does star...Star rushed to welcome Copa and Avianca-Taca knowing that TAM will leave. Even LH started an agreement with H7 (Sky Chile) SkyTeam also scrambled to get scraps and recruit....AR (I know...!) So what is One World doing right now in the event that LA would bolt for Star?....Absolutely nothing. One World is just sitting like the Corcovado statue waiting to welcome TAM with open arms... or LATAM at that point I guess....



AA will Rise Again!
User currently offlineEddieDude From Mexico, joined Nov 2003, 7569 posts, RR: 43
Reply 8, posted (2 years 12 months 3 days 11 hours ago) and read 1779 times:

Quoting eastern023 (Reply 7):
to welcome TAM with open arms... or LATAM at that point I guess....

Welcome JJ with open arms. LATAM is simply the name of the holding company that will own stakes in both carriers. LATAM is not going to be an airline. Like IAG as the parent of BA and IB. And Air France-KLM Groupe as the parent of AF and KL.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlinejonathanxxxx From United States of America, joined Feb 2011, 673 posts, RR: 1
Reply 9, posted (2 years 12 months 3 days 10 hours ago) and read 1740 times:

Quoting eastern023 (Reply 7):
I think the writting is on the wall OneWorld knows it and so does star...Star rushed to welcome Copa and Avianca-Taca knowing that TAM will leave. Even LH started an agreement with H7 (Sky Chile) SkyTeam also scrambled to get scraps and recruit....AR (I know...!) So what is One World doing right now in the event that LA would bolt for Star?....Absolutely nothing. One World is just sitting like the Corcovado statue waiting to welcome TAM with open arms... or LATAM at that point I guess....

I would imagine that after the airlines are merged and both in One World I think TP might follow. Considering that TP's biggest feed in Brazil is obviously JJ what would TP do after that? Would they still codeshare? I think this is set up perfectly. JJ always wanted to be in the same alliance as TP. JJ/LA are now merging and they stay with One World. IAG then wants to merge with TP. So now One World is the largest alliance in Latin America and Southern Europe. It all pans out perfectly   


User currently offlinevictrola From United States of America, joined Apr 2008, 506 posts, RR: 1
Reply 10, posted (2 years 12 months 3 days 10 hours ago) and read 1680 times:

I can see it now LANTAM. "LANTAM Makes the Going Great!"

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