Majors Form Pacts With Latin American Carriers

<B> Majors Form Pacts With Latin American Carriers</B>

By Marshall Krantz

Further heating up airline competition in Latin America, major North American carriers have been busily forging alliances with Latin American partners in the past few months through codesharing agreements and minority ownership investment.

Among the developments, American Airlines received federal Department of Transportation approval for code sharing with the TACA Group of six Central American airlines, American officials announced.

The leading U.S. carrier to Latin America, American can now place its "AA" designator code on 149 weekly flights from nine U.S. cities to ten Central American gateways served by TACA. In turn, TACA carriers are code sharing on 126 weekly flights from eight Central American cities to American's U.S. gateways. Typical of code sharing, the agreement also includes reciprocal frequent flyer programs.

The TACA Group consists of TACA International Airlines of El Salvador and affiliate partners AVIATECA of Guatemala, LACSA of Costa Rica, COPA of Panama, NICA of Nicaragua and TACA of Honduras.

"We are continuing to expand our presence and marketing in South and Central America," said American spokesperson Martha Pantin. "It is a natural outgrowth of the services we offer in the United States."

American also has expanded its code sharing services with Mexican partner Aero California. Added to the network are Aero California flights between Los Angeles and the Pacific Coast destinations of Loreto, Los Cabos, Manzanillo and Tijuana, bringing to ten the code sharing destinations Aero California serves.

American serves an additional ten Mexican cities directly. This past spring, American formed a frequent flyer partnership with LanChile, which at the same time signed a codesharing agreement with Canadian Airlines. The LanChile-Canadian agreement, which includes frequent flyer reciprocity, covers a daily Vancouver-Santiago flight connecting in Los Angeles, and a daily Toronto-Santiago flight connecting in Miami.

The leading airline within Latin America, LanChile is undergoing a corporate makeover that features a complete modernization of its long-haul fleet. The airline, with a long-haul fleet of Boeing 767-300ERs that on average are less than three years old, is adding five more of the planes through next year. Inside the aircraft, the company is replacing first and business class seats with seats featuring computer ports and individual video montors. New menus feature fresh South American cuisine.

The second largest U.S. carrier to Latin America, Continental Airlines, has begun a codesharing partnership with Brazil's second-largest air carrier, VASP. The operation was launched this summer with code sharing between Newark International Airport and both Sao Paulo and Rio de Janeiro. As the program rolls out, Continental will code share on VASP's flights between Sao Paulo and Miami and Los Angeles, along with 14 other cities in Brazil. VASP will later add 20 destinations in the United States and Canada that Continental serves. The arrangement includes reciprocal use of airport lounges.

Continental this past spring acquired minority equity interest in the Medellin-based Aerolinas Centrales de Colombia, or ACES, as well as the Panama-based Compania Panamena de Aviacion, COPA. For business travelers, Continental's interest in the two airlines translates into the same services as those of codesharing agreements: baggage checkin from point of origin to final destination, reciprocal frequent flyer programs, and reciprocal use of airport lounges.

Continental is appealing to the meetings market by offering meeting planners the equivalent of a roundtrip domestic ticket for every 25 passengers booked from the United States to Latin America instead of the usual 40, according to Brenda Davis, manager of group and incentive sales development. The program is good for travel through Dec. 15. In addition, Davis promised an aggressive pricing program for meetings and groups to Latin America, but said she has not yet received final approval.

Delta, too, is wooing meetings business by allowing attendees to check in four bags at no cost rather than the usual two, according to Delta spokesperson Jackie Pate. Delta made the same offer to its other passengers, but only in a program that expires Oct. 31.

Delta also has entered codesharing agreements with Aeromexico on the Mexican carrier's daily flights between Monterrey and Delta's Atlanta hub, with Lima-based Aeroperu, and Caracas-based Aeropostal. Delta already code shares with Aeromexico on 24 daily flights from five Mexican cities to seven cities in the United States. Both carriers hold minority equity positions in Aeroperu.

Delta CEO Leo F. Mullin has called the Aeromexico partnership, which includes a five-year marketing agreement, "a cornerstone of our plans in Latin America."

Following a spate of new route openings to Latin America earlier this year by the major U.S. carriers, United Airlines inaugurated daily service between Chicago and Buenos Aires in September, and the airline is seeking DOT approval to operate daily non-stop service between Los Angeles and Sao Paulo.

The recent route expansion underscores the growing ties between the United States and Latin America and how pervasive air travel has become between north and south.

"Just as at one time Kennedy was the principal gateway to Europe, and Miami was the gateway to South America," said United spokesman Joe Hopkins, "but now there are additional gateways. You're seeing carriers paying closer attention to South America because they think there are good opportunities there.