American Airlines' purchase of an 8.5% stake in Aerolineas Argentinas has started the Argentinian carrier on a major restructuring. Promptly after the $25 million purchase closed, Aerolineas ordered 12 Airbus A340s as the first step of its new business plan to refleet and expand.
Delayed for months by regulatory approvals, American bought 10% of Intervest, a holding company held by Bankers Trust/Merrill Lynch on behalf of Iberia Airlines. Iberia will keep 10% of Intervest; the balance will be sold to third parties over the next six months. Intervest holds 85% of Aerolineas' shares; employees own another 10%, and the government retains the 5% balance. To secure antitrust clearance from the US Justice Department, American abandoned parts of its original deal that would have given it a seat on the Aerolineas board and permanent veto rights over certain large investment decisions. Still, American retains substantial influence. In one of his first acts as chief operating officer, David Cush replaced most of the airline's senior management from Iberia. The business plan Aerolineas has now started was also prepared by American Airlines.
Under that plan Aerolineas will expand its fleet over the next four years from 47 to 70 jets, while phasing out all of its Boeing 747-200s. It plans new routes to Europe, more flights to Australia and New Zealand, and the launch of a second international gateway at Cordoba in central Argentina. It also expects to boost domestic flights and service within the Mercosur region with regional jets.
Meanwhile, SEPI, Spain's state industrial holding company, has given American and British Airways approval to buy 10% of Iberia. BA will take at least 8.2% and American the balance.
Source: Airline Business
