In a move that could transform the alliance landscape in Latin America, American Airlines is studying whether to take control of AeroPeru.
American is exploiting the vacuum created when Delta and Cintra, the holding company for Aeromexico and Mexicana, refused to inject more cash into unprofitable Aeroperu. Delta and Cintra have each owned 35% of AeroPeru since Delta bought half of Cintra's 70% stake 12 months ago.
Last January, when AeroPeru warned that it needed $15 million for upgrades, Delta and Cintra replied that they would not invest "one more dollar." Alfonso Pasquel, Aeromexico's director general, said AeroPeru "does not represent a profitable investment for us, neither would it be much more cost for us to cancel our participation in the company."
AeroPeru appealed to Lima for a bailout, citing high local fuel costs and unfair competition from TANS (Transportes Aereos Nacionales Selva), the air force-operated airline. Peru's President Alberto Fujimori prejected any notion of a government rescue, arguing that, without TANS, Aerocontinente would be the only airline flying in Peru today.
By late January three outsiders had shown their interest in AeroPeru. Continental - outbid by Delta last year; TPA Investments, a group previously involved with Global Air and AV Atlantic, and American.
American has a letter of intent with AeroPeru, giving it an exclusive first option to buy shares and is conducting a due diligence review of AeroPeru's finances and operations. But Delta and Cintra jointly own the maximum permitted under Peruvian foreign ownership rules, so American will need to buy from one or both of them.
Source: Airline Business
