Opens Another South American Passenger Market To The
Chile-Based Airline
LAN Airlines S.A. said Friday it had signed a definitive
purchase agreement for the acquisition of 98.942% of the
outstanding shares of Colombian airline Aires. Having completed the
due diligence process, LAN will acquire Aires for $12 million in
cash, in addition to assuming net liabilities of approximately $100
million, which include $18 million of bank debt.
The airline says the 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 and providing seamless service to its passengers. Ignacio
Cueto, LAN’s President and Chief Operating Officer, stated
“We are very proud to announce this transaction. AIRES has
made an important contribution by allowing many people in Colombia
access to air travel as a means of transportation. LAN will now
consolidate this growth by elevating even further the
airline’s safety, quality, and service standards. We will
dedicate our maximum efforts to advance this process as swiftly as
possible, applying the experience and recognized capabilities of
LAN, so that passengers may benefit from the changes that will
gradually be incorporated to the AIRES operations.”
Aires will satisfy the foreign ownership and control
requirements of each country where it operates. The company will
replicate LAN’s “low cost” model already
operating in the domestic markets of Argentina, Chile, Ecuador and
Peru, stimulating demand on domestic flights by providing more
Colombian citizens the opportunity to use air transportation. In
the medium term, AIRES will evaluate the expansion of international
passenger operations and the advantages of any synergies it may
obtain from LAN Cargo’s affiliate in Colombia, LANCO,
launched in March 2009.
LAN says the integration process may involve certain operational
changes such as itinerary modifications and efficiency
improvements. This process will not interfere with the continuity
of current operations of AIRES, and is expected to be completed
within the next months.
Aires is the second largest operator in the Colombian domestic
market with a 22% market share. As of September 2010, Aires had
operating revenues of $190.9 million. The airline's fleet consists
of nine B737-700s, 11 Q200 and four Q400, all of which
are operating under leases.
LAN continues to provide Colombian airline AEROASIS SA with
technical support and service consultancy in the process of
obtaining its operating permit issued by the Colombian Civil
Aviation Authority (Unidad Administrativa Especial de
Aeronáutica Civil).
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