Copa-Continental Merger Ups Bid for Rival Avianca

An alliance between Continental Airlines and Panama’s Copa Airlines will have better chances of laying hands on Avianca, the Colombian air carrier, with an offer that goes Brazil’s Synergy Group one better. The Brazilian company has already warned it won’t seek a higher bid.

A creditor of the bankrupt Colombian airline said Copa-Continental has now outbid Synergy’s former plan of buying out 75 percent of Avianca’s shares, a scheme that includes giving the ailing air company a $64-million shot in the arm and taking in some $300 million of its debt.

“We’re not going to make a higher bid because we don’t think this business could be more interesting now than it was before,” said German Efromovich, an oil entrepreneur that also controls Synergy.

Avianca, an air carrier that operates an average 290 daily flights with a fleet of 36 jetliners, filed for bankruptcy protection back in the 1990s following a steep crisis that nearly brought the company to the brink of extinction as a result of stalemated local passenger and cargo traffic, higher safety and security costs and the overall fallout of the 9/11 terrorist attacks in the U.S.

Avianca’s owners are Valores Bavaria, holding of the conglomerate run by Colombian tycoon Julio Mario Santodomingo, and the National Federation of Colombian Coffee Producers, both with fifty percent of stocks in their hands.

The leader of the Colombian Union of Pilots, Alberto Padilla, said in a talk show on Bogota’s Radio Caracol that the Copa-Continental’s bid is “noticeably higher than Synergy’s.”