Chile’s LAN Airlines has reached a deal to buy Colombian carrier AIRES, through the purchase of its parent companies.
The deal calls for LAN Airlines to buy 98.942 per cent of the outstanding shares of AIRES for US$32.5 million, to be adjusted according to variations in AIRES’ debt between its value at the closing of the transaction and the value as of August 31, 2010, as stated in the company’s financial statements.
LAN Airlines notes the deal is subject to a due-diligence process and compliance with regulatory requirements and authorizations, as well as the need to bring Colombian shareholders into the company. LAN expects to finalize its purchase of AIRES in 30 to 60 days.
AIRES was founded in 1980 and is the second largest airline in the Colombian domestic market, boasting a 22 per cent market share. AIRES provides scheduled service to 27 domestic destinations within Colombia, as well as three international destinations. The company’s fleet consists of nine Boeing 737-700s, 11 Bombardier Q200 turboprops and four Q400 turboprops.
An AIRES Boeing 737-700 crashed and was destroyed on August 16, 2010 after being struck by lightning while landing in a thunderstorm at Gustavo Rojas Pinilla International Airport on the Colombian-administered resort island of San Andrés in the Caribbean. There were two fatalities in the accident but 113 people survived.
According to LAN Airlines, once the acquisition is completed, AIRES will become an affiliate of LAN Airlines and each company would comply with the foreign ownership and control regulations in each country where they operate. If LAN Airlines’ previously announced planned merger with Brazilian carrier TAM Airlines is successful, AIRES would become part of the proposed new Latin American airline group, LATAM Airlines Group S.A.
LAN Airlines says its agreement to purchase AIRES will have no impact on the technical support and service consultancy LAN is providing to Colombian airline AerOasis, which in the process of seeking an operating permit from the Colombian Civil Aviation Authority (Unidad Administrativa Especial de Aeronáutica Civil) to operate a fleet of leased Airbus A320s.
One of the leading passenger and cargo airline groups in Latin America, LAN Airlines and its affiliates serve more than 70 destinations worldwide through an extensive network that offers full connectivity within Latin America, while also linking the region with North America, Europe and the South Pacific, as well as 70 additional international destinations through its various alliances. LAN Airlines and its affiliates lead the Chile and Peru domestic airline markets and have an important presence in the Argentinean and Ecuadorian domestic markets.
LAN Airlines and its affiliates operate a young fleet of 91 passenger aircraft, while LAN Cargo and its respective affiliates operate an additional 11 Boeing 767-300F freighters.