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All change for Peruvian carriers

Peru's domestic aviation industry has undergone major change as AeroContinente emerges from a 10-day grounding with new owners and a new name, while Lima ponders privatising its military-owned carrier TANS.

AeroContinente, the leading domestic airline, has been renamed Nuevo Continente after its owners - the Zevallos family - effectively gave the airline to its staff for $3.5 million payable in 10 years out of operating revenue. Nuevo Continente has resumed domestic flights, but new president Miguel Halabi says it will not restart international routes until next year.

AeroContinente's grounding followed the declaration by Washington that its founder was "a drug kingpin". After that, no firm was willing to renew insurance on AeroContinente's jets and Lima stalled on its own promise to guarantee coverage for 30 days. This occurred just as a provincial judge ordered LanPeru's grounding in a long-running dispute over its foreign ownership.

In response, Lima released air force-owned TANS from its restrictions, freeing it to carry passengers on all domestic routes. According to local sources, the government hopes to privatise TANS in whole or part before year's end.