United, Avianca and Copa agree new revenue-sharing deal

victoria@aviationnews-online.com
By victoria@aviationnews-online.com December 3, 2018 23:23

United, Avianca and Copa agree new revenue-sharing deal

United Airlines has entered into a revenue-sharing joint business agreement with Aerovías del Continente Americano (Avianca) and Compañía Panameña de Aviación, (Copa). This long-term revenue sharing arrangement among United, Avianca and Copa covers routes between the United States and Central and South America (excluding Brazil), and is similar to United’s three existing revenue-sharing joint business agreements.  The arrangement is subject to regulatory approval in the United States and several jurisdictions in Central and South America.

The agreement will allow the companies to act as one airline in the market, allowing the carriers to join networks between the US and 19 countries in Central and South America. Acting as one airline, will allow them to better align frequent flyer programs, coordinate flight schedules and improve airport facilities.

“This agreement represents the next chapter in U.S.-Latin American air travel,” said Scott Kirby, United’s president. “We are excited to work with our Star Alliance partners Avianca and Copa to bring much-needed competition and growth to many underserved markets while providing a better overall experience for business and leisure customers traveling across the Western Hemisphere.”

“We are delighted to further solidify our existing partnership with United Airlines and look forward to increasing service options for our customers by working more closely with Avianca,” said Pedro Heilbron, Copa Airlines’ chief executive officer. “We believe this agreement benefits our passengers by providing competitive fares and a superior network of more than 275 destinations throughout Latin America and the U.S., and promotes further growth and innovation within the airline industry in the Americas.”

“We are certain that together we are stronger in the United States — Latin America market than any of the three airlines individually,” said Hernan Rincon, Avianca’s executive president — chief executive officer. “This partnership will allow Avianca to strengthen its position as a first-level player in the airline industry in America as we will expand our scope in the continent with United and Copa, offering better connectivity to our customers.”

United has also agreed to loan Synergy Aerospace $456 million, secured by 516 million shares of common stock of Avianca Holdings. The loan is payable in five annual instalments beginning November 30, 2021, and will be repaid in full on November 30, 2025. United also obtained an option to acquire up to 77.4 million Avianca shares from Synergy.

In connection, United also entered into an agreement with Avianca’s significant minority shareholder, Kingsland Holdings, in return for Kingsland’s pledge of its 144.8 million shares of Avianca Holdings common stock and its consent to Synergy’s pledge of its AVH common stock to United under the loan agreement.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com December 3, 2018 23:23