MADRID, 31 The Court of Free Competition in Chile (Competition Tribunal) has decided to temporarily halt the merger between the Chilean airline LAN and TAM, because the complaint filed on Thursday 27 January by the National Consumers and Users of Chile (Conadecus) alleging that the merger "can have serious and harmful effects on competition", according to the report submitted by the association before the Court of Chile.
Conadecus says in the letter that "the most important and alarming is that the behavior of LAN meet competition" is not and has not been adequate internally and externally, "he urged the court to determine who is the scope of the merger "after opening a consultation process" where all interested actors can participate, review and monitor all the background information.
After receiving the complaint, the judiciary has agreed to ask all interested parties to submit their views on this transaction within 30 working days from the publication of the resolution in the Official Gazette of Chile. Moreover, the same day that Conadecus delivered the report to the court, this was another document signed by Chile's National Economic Prosecutor (FNE) and LAN, which was achieved a settlement that proposed mitigation measures for routes where 90% have concentrations such as those of Sao Paulo, Rio de Janeiro and Asuncion, according to the Chilean newspaper La Tercera.
However, the submission was rejected by the Competition Tribunal because it had previously benefited Conadecus application. In this sense, the consumer action was received with "surprise" for LAN, where they hoped that the settlement agreement with prosecutors to "shield" operation in a short period of time.
Because the shielding is not possible, the negotiations of both carriers could be delayed "for about eight months, so the merger process will suffer a slowdown or even could be defeated. In this way, threatening the creation of the new airline, which would have a fleet of 280 aircraft would operate to 115 destinations in 23 countries. 
Conadecus says in the letter that "the most important and alarming is that the behavior of LAN meet competition" is not and has not been adequate internally and externally, "he urged the court to determine who is the scope of the merger "after opening a consultation process" where all interested actors can participate, review and monitor all the background information.
After receiving the complaint, the judiciary has agreed to ask all interested parties to submit their views on this transaction within 30 working days from the publication of the resolution in the Official Gazette of Chile. Moreover, the same day that Conadecus delivered the report to the court, this was another document signed by Chile's National Economic Prosecutor (FNE) and LAN, which was achieved a settlement that proposed mitigation measures for routes where 90% have concentrations such as those of Sao Paulo, Rio de Janeiro and Asuncion, according to the Chilean newspaper La Tercera.
However, the submission was rejected by the Competition Tribunal because it had previously benefited Conadecus application. In this sense, the consumer action was received with "surprise" for LAN, where they hoped that the settlement agreement with prosecutors to "shield" operation in a short period of time.
Because the shielding is not possible, the negotiations of both carriers could be delayed "for about eight months, so the merger process will suffer a slowdown or even could be defeated. In this way, threatening the creation of the new airline, which would have a fleet of 280 aircraft would operate to 115 destinations in 23 countries.
- Chile competition tribunal probes LAN, TAM merger (29/01/2011)
- Chile LAN Q4 profits soar 50 pct yr/yr to $165 mln (25/01/2011)
- Chile's LAN says TAM merger done in 6-9 months (19/01/2011)
- UPDATE 1-Chile's LAN sees TAM merger done in 6-9 months (19/01/2011)
- UPDATE 2-Chile LAN fourth-quarter profit rises 50 percent (25/01/2011)
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