An equity stake sale, either to another airline or the public, is not envisaged in the near future for Grupo TACA, says its chief executive, Federico Bloch. Instead, he says, "it's something we'll do at the right time and under the right conditions."
The six Central American airlines and their local subsidiaries which comprise Grupo TACA are all privately held. Bloch foresees that the group will want to sell a minority equity interest, but he is coy about when.
"At the proper time it makes sense," he says. "I see the world consolidating into airline groups. Because of the economics of the business, that is inevitable. Airlines are not unique from other businesses in any way. But", he adds, "that is a long range goal."
Bloch says a stake sale could come via a private or public offering. Either way, Grupo TACA would first need to re-organise. The stake he predicts as being sold would be in the group, not in its individual airlines. Yet, each airline is still a separate legal entity; the group itself is not. As Bloch explains, Grupo TACA is "a commercial name". Beyond that, Bloch says, "I don't think the markets now are right for a public offering."
He also admits that Grupo TACA has discussed a possible sale to American Airlines. Rumours of such a sale have surfaced twice in the past two years. Last year reports hinted that AMR Corp, American's parent, had signed a letter of intent to take a 15% stake in the group.
"We feel very close to American," Bloch says. "We have a very solid codeshare relationship." Yet, he insists nothing is imminent. "We have talked to American about the possibility. This is something that could happen at the right time. But nobody's in any hurry."
TACA's two-year alliance with American is the prime element in its USA strategy. It has applied for US anti-trust immunity for the deal, but has faced opposition from some US carriers.
Source: Airline Business
