E-NEWS UPDATE VOLUME 19 NUMBER 1008

BIG NEWS: SYNERGY GROUP TO ACQUIRE CONTROL OF TACA

As a result of months of negotiations, Efromovich, who already controls Avianca and Ocean Air, has announced the establishment of a holding company which will control the Central American group, TACA. Synergy will have the majority of the stock in the holding company which will be based outside the region, with both Avianca and TACA owning a minority stake. In a press conference in El Salvador, Roberto Kriete of TACA and German Efromovich, announced that the result will be the largest airline group in the region, with the largest fleet of 129 NG aircraft generating revenues estimated at $300 billion next year. The holding company will control both airlines making it one of the largest in the region with a common fleet of A320 and A330 aircraft. It will also have the right to exercise options on 37 NG A320s/A330s. The two brands will be maintained while the holding company will control all three airlines. According to the press release, the CEOs of both Avianca and TACA will be CEO and Chairman of the holding company. The new holding company will also launch an IPO on the New York Stock Exchange at some time in the future. The combined airlines will now compete with LAN, TAM and GOL/Varig serving all of Latin America, the US and Europe. Wow! One to watch. Congratulations to Efromovich, Villegas and Kriete!

GROWTH CHAMPIONS 2010-14: PANAMA, PERU

Is the title in today's article in Latin Business Chronicle by Chronicle staff. A fascinating update, with the opening statement: "Mexico will outperform Brazil in the next five years, while Panama will lead Latin America in GDP growth, the IMF forecasts." It is definitely a 'must read' article with a chart showing individual country performance in GDP growth between 2010 and 2014. The chart is based on IMF's World Economic Outlook and Latin Business Chronicle's calculations of average 2010-2014 growth. While Panama will have Latin America's highest GDP growth in the five years, at 6.5% average, Venezuela will have the lowest. Other growth stars are Peru, up an average 5.6%; the Dominican Republic, up 5.2% and Chile, up 4.9%. Other counties that will see average growth include El Salvador, up 2.7%; Guatemala, up 3.1%; Haiti, up 3.4%; Uruguay, up 3.7%; Bolivia, up 3.7% and Brazil, up 3.6%. For the complete article and chart, go to www.latinbusinesschronicle.com - How about that?

Other news, briefly

American Airlines September 2009; RPMs down 3.5%, Latin America down 5.0%

American reported a 79.4% system load factor for the month of September, a 2.8 pt increase versus the same month last year. Traffic decreased 3.5% year over year as capacity decreased 6.9%. Domestic traffic decreased 2.6% year over year on 6.9% less capacity. International traffic decreased 4.9% on a 7.0% decrease in capacity. American boarded 6,512,308 passengers in September, a 3.7% decrease over September 2008.

American experienced a 5.0% decline in its Latin American traffic in September on a capacity decrease of 6.0%. Latin American load factor for the month was 77.6%, up 0.8 pts over September 2008.

Continental Airlines September 2009; RPMs up 7.0%, Latin America up 7.5%

In September, Continental flew 6.9 billion consolidated revenue passenger miles and 8.5 billion consolidated available seat miles resulting in a consolidated traffic increase of 7.0% and a capacity increase of 0.5% compared to September 2008. Consolidated passenger revenue per available seat mile (RASM) is estimated to have decreased between 18.5% and 19.5% compared to September 2008. Latin American traffic grew with RPMs increasing 7.5% on an ASM increase of 5.8% moving the load factor up to 77.6%, 1.2 points higher than in September 2008.

Delta Air Lines September 2009; RPMs down 5.2%, Latin America up 0.4%

In September, Delta flew over 15.1 billion system revenue passenger miles and over 18.3 billion system available seat miles resulting in a traffic decrease of 5.2% and a capacity decrease of 6.7% compared to September 2008. International traffic decreased 7.8% year over year on a 10.5% decrease in capacity. The international load factor was 83.3%, up 2.5 pts over September 2008. 

Delta's Latin American traffic was up in September with RPMs up 0.4% while ASMs were down 1.0% compared to September 2008. Latin American load factor for the month was 75.3%, up 1.1 pts over September 2008.

ALTA member airlines August 2009 passenger traffic increased 2.6%

ALTA reported that its August member airline traffic (RPKs) increased 2.6% compared to the same month last year. Capacity (ASKs) increased by 5.2% in August resulting in a 1.8% decrease in load factor to 70.6%. ALTA member airlines carried 10,681,481 passengers in August 2009, up 2.7% over August 2008.

LAN to expand its international routes in 2010

According to the airline's International Sales Manager, Raimundo Martinez, the airline is planning to expand its long haul international routes in 2010. It plans to add a third destination in Europe in addition to its current service to Madrid and Frankfurt. As well as new destination in the United States and will increase capacity to its existing destinations of Miami, New York and Los Angeles. Way to go!

Peru domestic traffic has grown 4.49% through August of 2009

The Peruvian DGAC reports that domestic passenger traffic during the eight month period was 2,793,735 for an increase of 4.5% over the same period last year, with 120,000 additional passengers. The growth can be explained by the increase in traffic generated by LAN Peru. Stay tuned.

Copa Airlines to fly to Canada

Panama's "model airline" has received authority from the Canadian Department of Transportation to serve Toronto from Panama. The airline is currently negotiating with the airport authority in Toronto which will be crucial to the launch of the service. Way to go, Pedro!

LAN to increase cargo capacity to Chile and Ecuador this winter

The Chilean based "model airline" has announced that it will increase its cargo capacity between Madrid and both Chile and Ecuador this winter. The airline currently operates a daily flight to Santiago and Guayaquil/Quito. Beginning on December 16 it will operate 11 weekly flights to Santiago and ten weekly flights to both destinations in Ecuador. Stay tuned.

Embraer delivers 57 jets in the third quarter

Brazil's aircraft manufacturer has delivered a total of 57 jets during the third quarter of 2009; 29 for commercial airlines, 27 executive jets and one military. This is an increase of 18.8% over the same period in 2008. To date in 2009 Embraer has delivered 153 jets. So where's the crisis?

Uruguay's new terminal will handle 3 million passengers annually

The new terminal, which was inaugurated this week, has the capacity to handle 3 million passengers annually, which makes it operational until 2030. The new terminal demanded an investment of $165 million and makes it the modern airport in the area according to Puertas del Sur, which has the concession for the terminal. Under the name Aeropuertos 2000 it also has the concession for most Argentina airports and Malpensa, Italy. Congratulations, guys!