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The merger of Latin America’s top airlines is shaking up the region’s aviation sector.

BY JOACHIM BAMRUD

 

Enrique Cueto, the CEO of Chilean airline LAN, is on the cusp of becoming the leading airline executive in Latin America and one of the top ten worldwide. Although his carrier only ranks third in Latin America in terms of revenues, it managed to shake up the airline sector in August when it announced a $6.5 billion take-over of TAM, Brazil’s and Latin America’s largest airline. The deal became the sixth-largest in Latin America last year, according to the ranking of region’s Top 100 Mergers & Acquisitions from Latin Business Chronicle and Thomson Reuters.

 

While the announcement didn’t surprise the sector, it showed how far LAN had come. “Five years ago they weren’t even close [to such a deal],” says Stephen Trent, director of Citi Investment Research.


The deal also highlights how a company from Chile, Latin America’s sixth-largest economy, can successfully enter the top levels of Brazil, the region’s top market.   The fact that it is based in Chile is not a factor,” says Bob Booth, Chairman of the AvGroup, Inc. consultancy. “It’s all about management and vision - and the Cuetos are way ahead of the industry.”

 

Enrique’s brother Ignacio is the president and COO of LAN. After the new merger, Ignacio will succeed Enrique as CEO of LAN, while Enrique becomes CEO of the new holding company, LATAM.

 

The merger is expected to ...



Keywords: ABSA, Aires, Avianca, Cargo, Colombia, Destinations, Sao Paulo, Synergies
 

 

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