Even before the American-Tacapact gets final approval, it is sparking a flurry of competitive reactions from other UScarriers, set on improving their own Latin American positions.

The US Department of Transportation's tentative approval of the American-Tacadeal last December has pushed Continental Airlines to apply to fly to six Central American countries. Continental argues it needs these routes to compete against American in Central America.

Continental is further snapping at American's heels in its bid to forge equity links with Latin American carriers. Continental has allegedly won a 35 per cent stake in Aces Colombia, which inked a strategic alliance with Continental last year and invited private offers for a stake last October.

Continental has also bid for a 30 per cent stake in AeroPeru. The carrier has been actively pursuing an equity alliance with a US carrier since last October, when Lima lifted the limit on foreign investment to 70 per cent. Cintra, the holding company for Aeromexico and Mexicana, already owns 47 per cent of AeroPeru, but has the right to boost that to the higher limit by capitalising AeroPeru debt.

Delta Air Lines, meanwhile, has announced its own ambitious Latin American expansion plan. Delta means to launch more than two dozen daily nonstop operations to 18 different Latin American nations within the next four years, mainly from Atlanta but also from Los Angeles and New York. According to DOT reports, Delta presently operates only 5 per cent of the total US revenue passenger miles to Latin America, with its network to Brazil, Mexico, and the Caribbean.

Continental has scoffed at Delta's plans, describing them as little more than 'grandstanding'. The US would first need to amend a number of its Latin bilaterals before Delta could fly the routes it proposes. Continental has asked the DOT to dismiss Delta's applications to Argentina, Bolivia, Colombia, Ecuador, Paraguay, and Uruguay as premature on these grounds.

Delta is also pursuing Latin alliances of its own. It already codeshares with Aeromexico and Transbrasil and, most recently, with Air Jamaica. Delta has reportedly held codeshare talks with Argentina's Lapa and has letters of intent for codeshares with Venezuela's Aeropostal and Chile's National Airlines, although the latter is now in limbo following the January takeover of National by Avant Airlines.

Northwest's virtual merger with Continental, concluded in January, gives it more access to Latin America and heightens Delta's need to boost its own presence. Northwest will codeshare with Continental into Latin America.

Finally, the four US carriers have each filed for all seven of the new US-Brazil frequencies that become available in October. In the words of one industry observer, 'Latin America is turning into a real horse race.'

David Knibb

Source: Airline Business