JACKSON FLORES / RIO DE JANEIRO
The Argentinian air transport industry is on the verge of yet another merger as C¢rdoba-based carrier Southern Winds seeks to join with AIRG, formerly LAPA.
Southern Winds sources confirm talks regarding a proposed merger are under way, but AIRG declines to comment. Burdened by Chapter 11 limitations, AIRG has been hit by dollar-based costs and dwindling revenues. Argentinian businessman Eduardo Eurnekian holds a controlling stake in AIRG and a 30% stake in Southern Winds.
Local analysts say American Falcon's recent acquisition of Dinar, Aerolíneas Argentinas' steady recovery and the volatile state of Argentina's airline industry have forced AIRG and Southern Winds together. The absorption of AIRG into Southern Winds would give the latter a 34-36% slice of the domestic market, up from its current 16%. Hindering the deal, however, is AIRG's $140 million debt and Chapter 11 limitations.
Southern Winds recently returned two Bombardier Dash 8 Q100s to lessors, and says it will retain its Bombardier CRJs, despite suggestions it is returning the CRJ200s.
The airline is expanding with 737-200s, recently taking delivery of two, with three to follow. It has also signed a letter of intent for five more to be delivered next year, say sources. The airline will launch scheduled services to Miami this week and Madrid next month, with two wet-leased Boeing 767-200s.
Source: Flight International
