Mexico City is alive with conflicting claims about when the government will resolve the future of Cintra, the holding company for Aeromexico and Mexicana.
Financial analysts, who have watched the impasse last three years, predict the decision will be put off until the Vicente Fox government takes office on 1 December. But the Federal Competition Commission (CFC), which remains at the centre of this dispute, claims a final decision is due in "a question of days".
Government agencies hold 56% of Cintra's shares, with the bank savings institute (IPAB) holding most. The government needs to sell its shares to help meet debt reduction targets. But agency heads remain deeply divided over how Cintra should be sold - as a unit, or split, with the shares of Aeromexico and Mexicana sold separately.
In the past the CFC, which favours the break-up, has said this should be decided by consensus. But with consensus appearing impossible, the CFC is prepared to decide it alone. It has released a report condemning Cintra as the creation of a private monopoly.
The secretaries of transport and public credit do not directly challenge CFC's right to decide, but they oppose splitting Cintra. IPAB says it wants to sell its shares whichever way generates the most money.
Cintra supporters claim it is worth$1 billion more if sold as a unit. They suggest other ways to boost domestic competition without dividing Cintra, for instance, by raising the foreign ownership cap from 25% to 49%, or granting cabotage rights to foreign carriers. Others propose merging Aeromexico and Mexicana into a single Air Cintra or agreeing to open skies with the USA. But how these would address the CFC's concerns is unclear.
Delta Air Lines and United Airlines would like to buy stakes in their respective partners, Aeromexico and Mexicana. They insist, however, that the decision on how to sell Cintra is up to Mexico.
Regardless of the CFC's power to act, some analysts predict that Cintra's fate is so tied to public finance and policy issues that it will be held over until the next administration.
Source: Airline Business
