Merging any two businesses is complicated enough, but when both are airline groups and each has its own complexities about who owns what and how much it is worth, the task of combining them into a single, coherent entity starts to look like a checklist for sending a rocket to the moon.

Yet that is what Grupo Synergy and Grupo Taca have done by creating Latin America's second largest airline group - AviancaTaca. When they completed this landmark deal in February last year, they combined 13 carriers from 10 countries under one airline holding company that serves more than 100 destinations in 25 nations. Even more impressively, they secured final regulatory approval just four months after they announced the deal.

Some of the biggest financial challenges arose because both airline groups were privately held, so their market values were not easy to ascertain. A further complication was the differing stakes each group held in various airlines within that group. Grupo Taca, for instance, owned 100% of Guatemala's Aviateca and 49% of Taca Peru, but only 20% of Islena Airlines in Honduras. Fortunately, on the Synergy side of the equation, Avianca held all the shares in its subsidiaries with the exception of Ecuador's AeroGal, where its stake was 80%. Post-merger, the new organisation exercised an option acquired from Synergy and raised its AeroGal stake to 99%.

The final deal required some delicate balancing. Based on the value of assets brought into the merger, Synergy's owners hold two-thirds of the AviancaTaca parent company, with only one-third held by Grupo Taca's owners. But management and control are evenly shared. Avianca chief executive Fabio Villegas is chief executive of the new parent company and Grupo Taca's chief executive, Roberto Kriete, is chairman.

For now, the two airline groups have kept their separate brands, but are moving towards integration. They jointly raised $260 million through an initial public offering in April, and the holding company's shares began trading in May. They have merged nearly four million frequent flyers from two programmes into a single loyalty programme called LifeMiles. They have also nearly finished the herculean task of integrating reservation, passenger, accounting and revenue management systems. Once these and other integration steps are completed, perhaps next year, they will consider adopting a single brand. As Kriete told Airline Business earlier this year, there is little reason to move to a single brand until "all your passenger perceptions are identical and you are really acting as a single carrier".

The plan for AviancaTaca to join the Star Alliance in January 2012 adds impetus to the process. In preparation, the new company is forming bilateral agreements with Continental and United Airlines and some rivals, such as Panama's Copa Airlines and the former AeroRepublica, now Copa Airlines Colombia. These deals contemplate co-operation including codeshares and frequent flyer reciprocity. Star does not plan to accept all AviancaTaca member airlines into the global alliance at once. It says the former OceanAir, now called Avianca Brazil, "will be phased in later". Integrating these into one entity takes time, but the process is well under way.

Chief executive Villegas stresses that the merger did not occur by necessity or to rescue anyone, but because it benefits both companies "in terms of competitiveness". The deal, he says, is "a merger of equals".

Source: Airline Business