LANCHILE HAS FINALLY succeeded in its attempt to strengthen its position in the Latin-American market, with the approval by the country's Anti-monopolies Board of its application to take over Chile's second-biggest airline, Ladeco.
The ruling hands effective control of nearly 90% of the country's domestic market to the Cueto family, which owns LanChile, but the Board has stipulated that it will impose strict safeguards to protect consumer interests, referring also to a new aviation law to be passed with additional anti-trust provisions.
Spanish flag carrier Iberia, which has a 35% stake in Ladeco, has consistently opposed the merger and is re-evaluating its position in the light of the Anti-monopolies Board's decision.
The new operation, which also brings cargo carrier Fast Air under the same management, would have annual revenues of around $650 million, making it the fourth-largest airline in South America, behind Brazil's Varig and Vasp and Aerolineas Argentinas. The combined fleet would number 29 aircraft, including five Boeing 767s, two 757s, 14 737s, two 727s, two BAe 146s and four BAC One-Elevens and four McDonnell Douglas DC-8-71 freighters.
No decision has been made on how the marriage is to be consummated, but it is thought that LanChile will continue to operate Ladeco as a separate entity, with some rationalisation and re-allocation of routes in the Americas almost certainly one of the first areas to be addressed. Duplication on domestic services would also need to be eliminated.
Source: Flight International
