Avianca Merges With TACA


Colombian Avianca and Central-American, El Salvador based TACA have finalized their merger agreement to unite as one Latin-American airline company, keeping the two brands. The merger has been approved by antitrust and regulatory bodies.

Following in the footsteps of the mergers between Air France – KLM, Delta – Northwest and British Airways – Iberia or the ever growing Lufthansa Group, two of Central and South America’s airlines are now merging to form a new joint holding company. First announced in October, 2009, Avianca and Grupo TACA will merge under a single holding company, and the new airline group will serve more than 100 destinations and will operate 129 aircraft in its fleet (including 47 short and medium haul Airbus and Embraer planes from mainline TACA and Avianca’s 8 long-haul (Airbus A330 and Boeing B767) and 51 short and medium haul Airbus, Boeing and Fokker aircraft).

The new, joint holding company will be called Avianca-TACA Ltd. It will be domiciled in the Bahamas and held 67% by Colombian Avianca parent Synergy Aerospace Corp. and 33% by TACA parent Kingsland Holding. TACA Chairman and CEO Roberto Kriete will become Chairman and Avianca CEO Fabio Villegas will be acting as CEO once the merger takes place. The new COO will come from TACA and the new CFO will from Avianca.

With an annual revenue of USD 3 billion and 12,000 employees, their strong Latin-American network will be served from hubs in Bogota (Colombia), Lima (Peru), San Salvador (El Salvador) and San Jose (Costa Rica. The carriers also announced that they will keep their respective brands and will continue to operate separately – but under a common strategy. This will probably take shape in joint procurement, shared resources, inter-connected reservation systems as well as maybe a joint Loyalty Program – currently they have a combined of 3 million loyalty members.

Looks like Avianca – having been under ever-growing pressure from the LAN group which is dynamically and profitably growing to become South-America’s largest airline group and is virtually surrounding Avianca’s home market of Colombia from the South – have decided to look North for a partner and found TACA.

by balint01

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