Avianca, TACA to Merge

Two of the world’s oldest airlines are merging to form the largest airline group in Latin America. Avianca and TACA will join under a holding company but maintain separate operations with their respective brand names serving more than 100 destinations worldwide.

Colombia-based Avianca, a subsidiary of Synergy Group, and Grupo TACA, Central America's leading carrier, reached an agreement under which each shareholder will contribute its respective controlling ownership to a newly formed holding company. The transaction is subject to regulatory and other antitrust approvals.

With hubs in Bogotá, Colombia, San Salvador, El Salvador, San José de Costa Rica and Lima, Peru, the two groups have nearly $3 billion in aggregate annual revenue, serve more than 100 destinations, including 75 cities in Latin America, operate a fleet of 129 aircraft, employ approximately 12,000 people, and have over 3 million frequent-flyer program members.

Upon closing of the transaction, the new group's senior management team will combine the leadership of both companies: Avianca CEO Fabio Villegas will become chief executive officer of the new group. TACA COO Estuardo Ortiz will become the chief operating officer, and Avianca CFO Gerardo Grajales will become the chief financial officer.

Following the transaction, both sets of shareholders will share in the governance of the newly created group. TACA CEO and Chairman of the Board Roberto Kriete will become chairman of the new group's board of directors.

"Grupo TACA has long been a leading force for consolidation and rationalization in the Latin American airline industry,” said Roberto Kriete. “This latest chapter is a significant milestone in our corporate evolution, giving us the breadth and scale to better compete with any player in our markets while ensuring our long-term success. It represents a unique opportunity for all of our employees and shareholders to form part of one of the leading airline groups in the Americas."

"We are proud of what Avianca has achieved over the past few years in terms of the strong corporate culture we have developed and the quality of service we are providing. With this formidable partnership we will be able to build further on that success and provide our passengers access to what is now Latin America's leading airline network, as well as creating opportunities for further growth and development for all our employees,” said Germán Efromovich, chairman of the Synergy Group.

Contact Thomas L. Gallagher at tgallagher@joc.com.