Four months after gaining preliminary antitrust clearance to merge Aeromexico and Mexicana, their holding company Cintra has abandoned the idea.
Andres Conesa, Cintra's president, says Cintra decided to drop the plan that would have merged Aeromexico and Mexicana, but would also have required them to spin off subsidiaries, staff, aircraft and routes to form a new domestic rival – conditions imposed by Mexico's competition agency. Citing complexity and likely delays with the proposed merger, Cintra has returned to a variation of its original plan to prepare the two airlines for separate sales.
Since December, when Conesa replaced Rogelio Gasca Neri as Cintra's president, the company has been quiet about what steps it was taking under the merger plan. Beyond calling the proposed domestic spin-off Aeronacional, Cintra had disclosed nothing. The pilots union and local media have been increasingly critical of this information drought. It is now apparent that Cintra was having serious second thoughts.
Its biggest concerns centred on what the competition commission would require, particularly for Aeronacional's minimum domestic market share. Conesa says that if Cintra had stuck with the proposed merger, a sale would not have occurred until 2008. However, everyone involved agrees that the sale of Cintra's airlines, whether together or separately, needs to be over before next year's presidential election.
Pedro Cerisola, Mexico's transport secretary, adds that the merger would have been complex because it required growing a new airline (Aeronacional), while reducing the size of another (Aeromexico-Mexicana). He called it "an elaborate scheme".
As now proposed, Cintra's assets will be sold in three groups: Aeromexico and its subsidiary Aerolitoral in one, Mexicana and its subsidiary Aerocaribe in a second, and Cintra's ground-handling company in a third. The revised sale date is now set for the end of this year or early 2006.
DAVID KNIBB SEATTLE
Source: Airline Business
