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Copa confident in regulatory approval of three-way JV

Copa Airlines says it had been in discussions with United Airlines and Avianca for a potential joint venture "for quite some time", as it reiterates confidence that any deal would attain regulatory approval amid heightened joint venture activity in Latin America.

Copa's senior vice-president of commercial and network planning Dennis Cary says the airline had talked with both United and Avianca "throughout the last two years". He declines to specify if Copa had talked with the two airlines jointly or separately.

"Occasionally the questions come up. Given the fact that no one else had reached an announcement, we felt it was important to disclose our participation in it," he tells FlightGlobal at the Boyd Group International Aviation Forecast Summit in Denver.

Earlier this month, Copa emerged as the third party in joint venture talks between United and Avianca - which were first announced in early 2017.

Cary says a three-way joint venture "makes sense" for all the airlines involved, pointing out Copa's long relationship with United and its partnership with Avianca through the Star Alliance. Both Copa and Avianca joined the alliance on the same day in June 2012.

"Three of us would essentially have a joint offer for US-Latin America traffic, and what that brings is the ability for all of us to benefit from our combined networks, offering customers many more choices and a lot more flexibility," says Cary.

Copa and Avianca are not the only Latin American airlines keen to partner with United on a joint venture. Brazil's Azul has repeatedly said it is actively pursuing a similar deal with the US airline.

Cary says the talks are currently limited to the three carriers, but acknowledges that anything could happen.

Pointing to Copa's interline and codeshare relationship with Azul, he says: "We know the Azul team, we have a very complementary relationship, and obviously a common friend with United. But at this time it's just the three of us exploring."

Cary declines to comment on when the three airlines will finalise a deal, but says any partnership will require regulatory approvals from the USA, Panama and Colombia as well as other Latin American governments.

"Given the track record laid by competitors, we feel pretty confident it will ultimately be successful," says Cary.

United president Scott Kirby, speaking at the Boyd Group conference, says he believes that a deal with Copa and Avianca will be finalised in the "not too distant future" but declines to be more specific on the timeline.

LATAM Airlines Group, Latin America's biggest airline, is awaiting final regulatory approvals for joint ventures with both American Airlines and IAG. It has secured the green light from governments in Latin America including Brazil and Colombia, but continues to wait on approvals from Chile and the US government.

An Avianca-Copa-United joint venture "provides an important competitive counterweight" to the other large airlines in the region, says Cary.

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