Chilean Authorities Approve American Airlines’ Minority Stake in JetSMART

Chile’s National Economic Prosecutor’s Office (FNE) approved American Airlines’ acquisition of a minority stake in JetSMART. In 2021, both companies signed a letter of intent (LOI) to move forward with a codeshare agreement between the United States and South America.

Previously, Indigo Partners and the Dallas-based airline submitted to the FNE a request for a “concentration operation consisting of the acquisition by American Airlines of a minority stake in JetSMART.” Both companies complied with all the requirements established by the prosecutor’s office.

In the FNE’s report, the following considerations were considered:

American Airlines currently offers services to Chile from its main hubs, allowing passengers to connect to other destinations. The U.S. airline offers daily flights from Miami (MIA) and Dallas/Fort Worth (DFW) to Santiago (SCL).
JetSMART operates in Chile and offers domestic services, as well as international operations to Peru, Argentina, Uruguay, Brazil and Colombia.
American will hold a minority stake in the shares issued by JetSMART. In addition, the two airlines entered into a codeshare agreement, a frequent flyer program agreement and other commercial agreements.
American and JetSMART do not operate the same origin-destination (O&D) routes.
Both airlines are in the process of entering into bilateral interline and codeshare cooperation agreements as part of the alliance.
JetSMART has not entered any cooperation with other air carriers.
American and the Indigo Partners group airline do not have any third-party agreements aimed at marketing flights in Chile.
Regarding cargo transportation, American has an interline agreement with an economic agent that does not transport cargo on routes within Chile.
The prosecution concludes that if this association materializes, it is not apt to substantially reduce competition in the markets analyzed.

A Singular Cooperation

American Airlines is currently the North American airline that offers the largest number of connections with Latin America, from its hubs in Dallas, Miami and New York. JetSMART is in full growth, and already has bases in Chile Argentina, and Peru, as it continues its development in Latin America.

A particularly important Latin American market for American is Colombia, where it offers flights to 6 destinations. JetSMART has operations to Bogota and Cali, and in August will add the Medellin connection, reaching three routes to and from Chile, the low-cost carrier’s main base. American Airlines has a significant presence in these markets, with operations to the capitals of both Chile and Argentina from Dallas, Miami and New York.

This article was originally published by  Rainer Nieves Dolande and Sebastián Polito on Aviacionline in syndication with AirlineGeeks.

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