Delta Air Lines is boosting its Latin American presence with a deal to buy 35 per cent of AeroPeru, frustrating rival Continental, which seemed ahead in the race for a stake.

Delta's current ties with Aeromexico, and its plans to expand those ties into a broader alliance, probably tipped things in Delta's favour. Aeromexico was in a position to dictate who could buy into AeroPeru, since it already held 47 per cent of the Peruvian flag carrier. And Aeromexico gained the right last October to boost that stake to 70 per cent - the maximum foreign ownership allowed under Peru's aviation law.

Since then Aeromexico and AeroPeru have been seeking a strategic US partner. With Delta's purchase, Aeromexico and Delta will each hold 35 per cent stakes in AeroPeru.

Delta and AeroPeru hope to have government approvals in place before Delta launches daily Atlanta-Lima services on 1 July. Under a 10 year agreement between Delta and AeroPeru, the airlines plan to codeshare on common Peru-US flights and on domestic routes behind and beyond one another's gateways. The agreement also covers frequent flyer reciprocity, lounge access, and technical assistance.

Leo Mullin, Delta's chief executive, calls the deal 'a strategic step in building Delta's presence in Latin America.' Delta's broad Latin strategy is emerging. In March, it inked a codeshare deal with Venezuela's Aeropostal (see Newsline p20), announced a codeshare with Air Jamaica, agreed to share ownership and control in AeroPeru with partner Aeromexico, and revealed plans to convert its current codeshare with Aeromexico into a systemwide strategic alliance.

Source: Airline Business