San Salvador Comalapa International Airport

Avianca-TACA primes for re-branding and intensifying competition with LATAM

Avianca-TACA will come full circle during 2H2013 as its various airlines unify under the Avianca brand more than three years after the Avianca-TACA merger kickstarted consolidation in Latin America and drove the decision by LAN and TAM to form what is now the region’s powerhouse LATAM Airlines Group. During 2013 the competition between the two largest airline groups in Latin American will only intensify in the markets where they already compete fiercely – Colombia, Ecuador and Peru.

With Avianca-TACA completing its merger more than two years ahead of LATAM, Avianca-TACA has the benefit of harvesting a combined network whereas LATAM is just beginning to ferret out the benefits of its newly combined network resources.

In addition to continued competitive pressure from LATAM during 2013 Avianca-TACA will also encounter some new competition on international flights from Ecuador and some pressure from startup VivaColombia in its largest market Colombia. At the same time Avianca-TACA continues to battle infrastructure constraints at its largest hub Bogota, which could result in further expansion at its Lima and San Salvador hubs.

TAP Portugal’s privatisation enters final stage, with Avianca-TACA parent emerging as only bidder

TAP Portugal is likely to end up in the hands of Synergy Aerospace, the majority owner of Latin American airline group Avianca-TACA, following the surprise announcement on 18-Oct-2012 by the Portuguese government that it had retained only one bidder to proceed to the second stage of TAP’s sale process. Final negotiations still have to start and it is as yet unclear how much Synergy Aerospace will pay for the debt-laden Portuguese flag carrier, which is in need of capital to fund expansion and fleet renewal.

The selection of Synergy Aerospace as future owner of TAP would reinforce the Portuguese carrier’s leading position in the Europe-Brazil market. It also meets Synergy's long-held goal to expand into the Europe-Brazil and other long-haul markets. Synergy-owned Avianca Brazil is a significant and fast-expanding player in Brazil's domestic market but does not operate any widebody aircraft and has only one international route. Avianca Brazil could replace TAM as TAP's partner for connecting flights in Brazil.

United excludes Houston in new domestic and international push from US hubs

After embarking on promised cuts from its Houston Intercontinental (IAH) hub, United Airlines is introducing new long and short-haul service from all its other US hubs starting in Nov-2012, further enforcing its decision to pull-down its Houston operations after the city endorsed plans by Southwest to launch new international service from the city’s second airport, Houston Hobby.

United will transfer its Paris service from Houston to San Francisco, where United will also resume direct flights to Taipei, where it now has codeshare authorisation with Star Alliance member elect EVA Airways. United is also growing internationally in the Americas, with intentions to launch Chicago-Monterrey and Washington Dulles-San Salvador as well as service to Canadian cities of Thunder Bay and Kelowna, and seasonal services from Chicago to Nassau.

Key decisions loom in 2012 for Avianca-TACA as integration effort nears completion

The spotlight in Latin America this year will primarily be shone on LAN and TAM as the two airline groups complete their landmark merger and begin the integration process. But it is also a key year for Avianca-TACA, which completed their merger in early 2010 and has completed about 90% of its integration process.

The integration of Avianca and TACA will be wrapped up this year as the carrier formally joins the Star Alliance, completing two major milestones for the fast-expanding airline group. Several major decisions also loom for the group in 2012 related to its corporate structure, branding and fleet.

Structurally, a decision will likely be made by the end of this year on whether to bring Avianca Brazil into the publicly traded holding company Avianca-TACA. The Brazilian carrier is still owned by the Synergy Group, the holding company controlled by the Efromovich family which also owned Avianca prior to its merger with TACA (the Efromovich family now has a majority share in Avianca-TACA Holding). As a result, Avianca Brazil remains separate although it has a co-branding arrangement with Colombia-based Avianca.

Narita sees 60% pax decline since Japan earthquake; UK budget shakes shares

The outlook after the Japanese earthquake was still not entirely clear this week even as Narita International Airport Corporation stated all operations at the airport had returned to normal, and Delta reported it was operating its “normal” 40 flights a day to Japan.