American Airlines has been cleared to proceed with its acquisition of 8.5 per cent of Aerolineas Argentinas. However, the Department of Justice's go-ahead comes with restrictions that will limit American's influence over the Argentinian carrier and its national market.

The DOJ has forced American to restructure its deal so it will not have any representatives on the Aerolineas board, as well as relinquishing its right to vote its shares to influence competitive decisions by Aerolineas. The DOJ notes that United Airlines is the only other carrier serving the US-Argentina market and stresses it is '. . . important to maintain their competitive independence'. The DOJ is also concerned about a planned codeshare between the two airlines and warns that it remains free to challenge such an agreement under antitrust law.

American's parent AMR Corp plans to invest US$25 million on a 10 per cent share of Aerolineas' holding company Interinvest; this is equivalent to 8.5 per cent of Aerolineas and its regional subsidiary, Austral. AMR has agreed to find new investors for the remainder of the Interinvest shares, which are owned by Merrill Lynch, Bankers Trust and Sepi, Iberia's parent.

Meanwhile, four US carriers have outlined their plans for new routes to Brazil since an amendment to the US-Brazil bilateral agreement enabled the Department of Transportation to offer seven new weekly slots from 1 October.

American wants to start flights between Miami and Manaus, but the others are setting their sights on Sao Paulo. United aims to fly there from Los Angeles, Delta from New York, and Continental from Houston.

Source: Airline Business