Continental Airlines is finding its push into Latin America hampered by the fact that American Airlines has already secured matches with many of the region's flag carriers. Pickings among the second- and third-tier airlines tend to be much smaller, Continental is discovering.
Chile's Avant Airlines is the latest example. Continental and Avant have inked an alliance to codeshare and pursue joint marketing and frequent flier programmes. But Avant does not fly to the USA and has only 30% of the local market, although it is Chile's second airline. Number one is LanChile, American's partner.
In Peru, where Delta has an alliance with flag carrier AeroPeru, sources say Continental is talking to T Doble A (Transportes Aereos Andahuaylas), which lacks overseas routes and probably ranks third in the domestic market. Like other local carriers, T Doble A's skies are also clouded by Peru's new law that grants cabotage rights. As a result, American plans to resume flights in the Lima-Cuzco corridor, and LanChile plans to launch LanPeru in March.
Continental has a stronger presence in Brazil, with Vasp, in Venezuela, with Aserca, and in Panama with Copa - although again, these airlines are considerably smaller than any of the region's flag carriers. But its alliances face other problems. In Colombia, Continental has decided for undisclosed reasons to cancel plans for a 30-40% stake in Aces, the country's number two carrier behind American's partner, Avianca. Continental and Aces will keep their marketing and frequent flier alliance, but Aces was hoping Continental's capital would help it finance acquisitions of new Airbus A320s and pay for other upgrades.
Elsewhere, the story is similar. Jesus Diez, president of the company that owns and manages Avant, thought a Continental alliance might bring fresh capital to help Avant's struggle against LanChile. But the pact includes no equity and Continental says none is being discussed.
Delta's push into Latin America adopts a different strategy. While Delta is seeking partners, much of what it plans is based on serving Latin American cities direct from New York or its home hub of Atlanta, which it is promoting as an alternative gateway to Miami.
Source: Airline Business
