There are some interesting developments in the Latin American airline industry. News that definitely reshape the balance of the sector.

The new President-Elect from Chile, billionaire Sebastian Piñera, is delivering on promises he made during the presidential race and will relinquish his 26.3% stake in LAN, Chile’s flagship airline. What is not yet clear is who will be the buyer. The Cueto family (LAN’s owners) have priority to acquire Piñera’s shares, due to the existence of a shareholders’ pact. That deal stipulates that if one wants to sell its stake in LAN, the first option to buy is the other partner.

Analysts say the Cuetos will buy a percentage to secure control of the airline and that the remaining securities could be offered to others, possibly local economic groups or a foreign airline with a strong presence in the region.

Last week Brazilian magazine Exame reported on its Web site, that TAM Linhas Aereas, Brazil’s largest airline, is in talks to buy a stake in the airline.

It is also interesting to note the recent visit of Ryanair executives to Brazil. There they met with the CEO of Webjet and discussed the possibility of acquiring a stake of up to 49% in the Brazilian low cost airline. Ryanair is said to be waiting for the final approval of new Brazilian legislation which allows for foreign capital to have a stake of up to 49% in Brazilian airlines. Currently this is limited to 20% maximum.

Webjet and competitor, Azul, are both currently vying for the no. 3 position in the Brazilian aviation market behind leaders TAM and GOL.

With all the news and potential shake ups coming, it is difficult to predict how the Latin America airspace will look a few months from now.

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