Avianca and TACA to merge.

Avianca, the national carrier of Colombia and TACA, which has a tri-hub strategy with its hubs based in Lima, San Jose and El Salvador has announced plans to merge from next year.

The merger will see the coming together of two of the largest carriers in the Latin American market.

The move will create cost synergies from cost savings from the operational side of the business with procurement and employee numbers working in Aircraft, Ground Staff, Fuel, Airport Charges and Customer Services. The fleet and networks of the two carriers will be largely complimentary.

TACA has three hubs, operating 31 aircraft with a mainly short/medium haul range, including A319/A320/A321 and E-190, where as Avianca operates 46 aircraft with larger aircraft such as their B767-300 ER and A330-200, it also has 12x B787 on order.

Avianca operates 2111 weekly frequencies from Bogota, whereas TACA from its three hubs operates 806 weekly services. In terms of their network, TACA currently operate 36 destinations whereas Avainca operates 43, however there is crossover on only 9 destinations, including Buenos Aires, JFK, Washington Dulles and Mexico City.

The merger will see TACA gain access to Avianca long haul destinations in Europe, notably Barcelona and Mexico which gives TACA passengers access to these large hispanic VFR markets from any TACA destination, on the same ticket, this also creates extra feed into the Avinca long haul routes. The merger will also help the combined carrier compete with LAN on these lucrative European markets, which given its presence across several countries in Latin America allows it to feed high volumes of domestic traffic to its International network.

The merger will lead to the combined airline being one of the largest carriers in Latin America.