Ramon Lopez/WASHINGTON DC
American Airlines has been cleared by the US Department of Justice (DoJ) to acquire an 8.5% stake in Aerolineas Argentinas and its regional affiliate Austral Lineas Aereas - but the US carrier will have to limit its role because of anti-trust concerns.
Under the terms of the restructured deal, American will have no director on the Aerolineas Argentinas board. It also agreed to relinquish its shareholders' influence over marketing decisions made by the Argentinian airline.
The DoJ concluded that it was important to keep American and Aerolineas Argentinas competitive, given that United Airlines is the only other airline to serve the US-Argentina market and opportunities for new entries remain severely restricted under the current bilateral aviation pact.
Last December, American's parent company, AMR, announced that it had agreed with SEPI, the Spanish state holding company, and a group of investment banks under the Andes Holding umbrella, to acquire a minority stake in the Argentinian group.
SEPI and Andes took over most of the Argentinean airline from Spain's state-owned Iberia, which held 85%of the carrier, but was obliged by the European Commission to cut its stake as a condition for receiving state aid.
Iberia, which is owned by SEPI, is also in talks to join American and British Airways in their wider alliance. The airlines are looking at taking a 10% stake in Iberia.
American will invest $25 million in Aerolineas and will seek other investors to take over the Spanish holdings as they are sold off. As an interim measure, American will provide two executives to take over from the airline's senior management team, which is to be replaced.
American will essentially have to remain a passive investor under the deal thrashed out with the DoJ, which says it will continue to monitor the market to Argentina for evidence of anti-competitive behaviour.
The DoJ will also continue to review a proposed code-share agreement between both parties, a deal over which the Department has expressed concern.