E-NEWS UPDATE VOLUME 19 NUMBER 0629

US TRADE: COLOMBIA DROPS LEAST

Is the headline in an article by Joachim Bamrud in the June 26 issue of Latin Business Chronicle. Colombia is the least affected by the trade decline among the top US partners in Latin America is the opening line in the article. Colombia's exports to the United States have declined the least among the top five US trade partners in Latin America. Colombia's trade with the United States fell by 24% in April, for a total of $1.6 billion which was still the lowest drop compared to the total US trade with Latin America which was down 29.8%. The article also calls for Alvaro Uribe's meeting this week with his US counterpart, President Barack Obama, to take a closer look at the need for the pending Free Trade Agreement, signed in November 2006. He points out that while Colombia has temporary duty-free access on more than 5,000 products, US companies need to pay tariffs on most goods sent to Colombia. For the period January-April Colombia had the lowest decline in exports to the US - 23.6% to $3.1 billion, while total Latin American exports fell 30.3%. Come on Obama, let's get Congress to sign the FTA with Colombia and set an example.

Other news, briefly

Aerolineas Argentinas fleet modernization plan update

The carrier expects to have at least 11 new B737-200s in its fleet by the end of 2009; one was recently delivered, another is expected before the end of June and nine more will be added during 2009. The government also confirmed that it will purchase 15-20 A330 and A340 aircraft. These aircraft will open opportunities on international routes and allow the carrier to take advantage of increasing tourism from the U.S. and Europe.

LAN continues its interest in creating a subsidiary in Brazil

The recent legislation allowing foreign investors to own 49% of airport operations is being taken as a first step to allow the same for foreign airlines. Jorge Awad, president of the Chilean "model airline", has officially requested a meeting with Brazil's president Lula when he visits Chile in September. Stay tuned.

TAM expands partnership with SWISS

As of June 22, members of TAMs Fidelidade program will be able to accumulate and redeem points on SWISS, a member airline of the Star alliance, on flights to any destination served by the airline.

South African Airways expanding service to Buenos Aires

The South African airline is adding three weekly flights to its existing service between Lagos, Nigeria and Buenos Aires which will provide daily flights in the market. On four days the airline will operate B747-400s due to increased demand. It is also increasing Johannesburg-Buenos Aires from the current twice-weekly to three flights a week. Way to go.

Pluna announces service to Porto Alegre and an alliance with Aerolineas Argentinas

The new, four-time weekly nonstop between its hub in Montevideo and Porto Alegre, Brazil will begin on August 3. The carrier also announced an agreement with Aerolineas Argentinas which involves no need for endorsement of tickets to change from one airline to the other. It is not a formal code sharing but could be the beginning. One to watch.

Mexico's Carlos Slim to make an offer for Telecom Italia in Argentina

The Mexican owner of Telmex and America Movil, Carlos Slim, has joined several other interested parties in acquiring the Italian company's Argentine affiliate. He is joining several groups, including Grupo Clarin and Corporacion America led by Eduardo Eurnekian. Stay tuned.

Spirit voted best airline by the International Business Council of Florida

Spirit was among a select group of finalists nominated by the IBCF's strategic partners, including leading business organizations and chambers of commerce from throughout the state. The award, the "Florida Business Award", was created to honor and generate public recognition of the achievements and positive contributions of Florida business. Spirit won hands down ahead of American, Delta, Southwest, United and others. Congratulations Ben Baldanza and team!

GOL, Brazil's "Intelligent Airline" looking at the Caribbean

In a major change to its plan, the "model airline" is waiting for authority to serve Aruba and the Dominican Republic from South America. It announced its plans to expand to the Caribbean as an alternative to its service within South America. Its load factor within the region in the first five months of 2009 was 50%, compared to its domestic average of close to 80%. Way to go, Constantino Junior!

Mexico's two legacy carriers respond to H1N1-related financial needs

Mexicana has asked the government for 1.5billion (US $113 million) to carry it through the cash squeeze that resulted from the recent swine flu outbreak. Mexicana's CEO, Manuel Borja, said that the carrier requested the funds because it is having short-term liquidity problems. Aeromexico has secured 500 million pesos from its investors after a 50% drop in May load factor that was attributed to the outbreak. Plans are reportedly to use some of the cash to cover debt obligations.

LAN is forecasting growth in the second half of the year

Jorge Awad, president of the "model airline", told Reuters last week: "In the second semester we are looking at growth in the cargo business, along with continued growth in the passenger traffic which we experienced through May". The airline reported a drop of 17.4% in its cargo revenue in May, while passenger traffic grew 11.4%.