LAN Airlines has signed the definitive purchase
agreement for the acquisition of 98.942% of the outstanding shares
of Colombian airline AIRES.
Having completed the due diligence
process, LAN will acquire AIRES for US$12 million in cash, in
addition to assuming net liabilities of approximately US$100
million, which include US$18 million of bank debt.
This transaction will provide the opportunity
for an affiliate of LAN to participate in the Colombian passenger
market, one of the largest markets in South America, thus allowing
for LAN and its affiliates to continue strengthening their
Ignacio Cueto, LAN’s President and Chief
Operating Officer, said, “AIRES has made an important contribution by allowing
many people in Colombia access to air travel as a means of
transportation. LAN will now consolidate this growth by elevating
even further the airline’s safety, quality, and service standards.
We will dedicate our maximum efforts to advance this process as
swiftly as possible, applying the experience and recognized
capabilities of LAN, so that passengers may benefit from the
changes that will gradually be incorporated to the AIRES
AIRES will replicate LAN’s successful “low cost”
model already operating in the domestic markets of Argentina,
Chile, Ecuador and Peru, stimulating demand on domestic flights by
providing more Colombian citizens the opportunity to use air
transportation. In the medium term, AIRES will evaluate the
expansion of international passenger operations and the advantages
of any synergies it may obtain from LAN Cargo’s affiliate in
Colombia, LANCO, launched in March 2009.
integration process may involve certain operational changes such
as itinerary modifications and efficiency improvements. This
process is expected to be completed within the
AIRES is the second largest operator in the
Colombian domestic market with a 22% market share. As of September
2010, AIRES had operating revenues of US$190.9 million. The AIRES
fleet consists of 9 Boeing 737-700s, 11 Q200 and 4 Q400, all of which
are operating leases.
LAN continues to provide Colombian airline
AEROASIS SA with technical support and service consultancy in the
process of obtaining its operating permit issued by the Colombian
Civil Aviation Authority (Unidad Administrativa Especial de
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