Victory appeared close for American Airlines at presstime in its bid to capture a stake in Aerolineas Argentinas.
Although American was making no comment and Continental Airlines, the other bidder, said it had not been informed of any decision, well informed sources in the US were saying that the bid had been won by American. Earlier in the month Spanish flag carrier Iberia, which is a shareholder in Aerolineas, strongly hinted to the Spanish press that American's bid was more favourable. Iberia chairman Xabier de Irala was reported as saying that the Dallas-based carrier had made the 'best offer'.
The deal is complex, but American is believed to be acquiring 10 per cent of Andes Holdings, which owns 63 per cent of Aerolineas. Iberia will then swap its 20 per cent of Aerolineas for a 10 per cent share in Andes. The Argentine Government retains its 5 per cent share and company employees their 10 per cent.
Sources say this could clear the way for British Airways to seek a small stake in Iberia, assuming the UK carrier's link with American goes ahead. But scepticism is rife due to the weak market position of the Spanish flag carrier.
Continental was seeking only a small equity position in Aerolineas, but was emphasising its offer of a relationship based on partnership, in which Aerolineas' international routes would be expanded using Argentine employees.
Aerolineas offers an important strategic opportunity in the rapidly growing Latin American market. But a link with American will face regulatory problems; Continental claims that the two carriers have 70 per cent of the US-Argentina market.
Karen Walker
Source: Airline Business
