LAN Airlines, Chile’s flagship carrier, agreed to acquire Aires, Colombia’s second largest airline, as the Chilean company continues its expansion in South America.
LAN will pay $32.5 million for Aires, the Chilean company said in statement. The final amount to be paid will depend on Aires debt at the time that the acquisition is completed, which is expected to take place in 30 to 60 days.
The Colombian carrier has a 22% market share with 22 domestic routes and 3 international destinations, LAN said in a statement Wednesday. Aires, a closely held low-cost airline, has 24 planes, the Chilean carrier said.
LAN is currently in the process of acquiring a stake in Brazilian airline Tam SA. If the process is successful, Aires will become part of the newly merged company, LAN said.
Aires competes in Colombia with privately-held flagship carrier Avianca SA, which recently merged with El Salvador’s Grupo Taca.
The Aires purchase will help LAN build up its domestic flight operations in Colombia, something which the company said in June was part of its expansion plan.
Colombia represents one of the largest domestic flight markets in Latin America. (Darcy Crowe / Dow Jones Newswires)