Kevin O'Toole/LONDONRamon Lopez/Washington DC
The American Airlines group, AMR, is to take a stake in Aerolineas Argentinas and form an alliance with Iberia, under a deal struck with Spanish state-holding company SEPI, which effectively controls both carriers. British Airways has also started co-operation talks with the Spanish carrier, which could see Iberia brought in as a full partner to the proposed alliance with American.
American, Continental and Brazil's VASP had all been vying for a stake in Aerolineas, but Iberia, which has effectively controlled the airline since its bungled privatisation in 1990, demanded that it be involved in any deal (Flight International, 5-11 February).
Iberia had been left holding a stake of 85%in the Argentian carrier after the failed privatisation, but in 1996 had to reduce the stake to 20%as the price of European Commission approval for its own state-aid injection. The other 63.4% was transferred to Interinvest, an Argentinian investment organisation, which is in turn owned by the Andes Holding consortium, made up of SEPI and two USinvestment banks, Merrill Lynch (45%)and Bankers Trust (15%). Andes also holds 89%of Aerolineas' sister regional carrier Austral, which is included in the American agreement.
Under the deal, reported to be worth $300 million, American will acquire 10%of Interinvest and "-lead an effort to find new investors" to take over the remainder of the Andes stake. Iberia itself will retain a 10%stake in Aerolineas, but will sell the rest.
As well as creating a partnership with the two Aerolineas and Austral, American has agreed to build a co-operative alliance with Iberia, which will involve code-sharing across the Atlantic and on "selected services" beyond their US and Spanish gateways.
BA has signed a separate memorandum of understanding with Iberia, agreeing to hold talks on codesharing on flights out of Madrid and London, which would come into effect from the 1998 summer timetables.
BA says that the two airlines will also discuss the possibility of Iberia joining in the proposed alliance with American, which could be sealed by equity stakes in the Spanish carrier. Sepi says that BA and American have each been offered the option of taking a minority interest in Iberia by the end of the year, kicking off the Spanish flag carrier's planned privatisation.
News of the deal has been swiftly greeted by competition complaints from Continental and United Airlines. The two carriers have petitioned the US Department of Transportationto block American's tie-up with Iberia and the two Argentinian carriers pending the outcome of the continuing investigation into the proposed BA/American alliance
Continental chairman Gordon Bethune says that the alliance would create a monopoly on routes to Argentina.
Source: Flight International
