Until 2013, there was a Salvadorian airline known as Transportes Aéreos del Continente Americano or TACA. It was one of the oldest carriers in Latin America, as it started flying in 1931. Nevertheless, on 28 May 2013, it lost its original name and was rebranded as Avianca El Salvador. How did this merger happen? Let’s investigate further.
Tracing back the origins of TACA
Lowell Yerex was a New Zealand billionaire that wanted to create several airlines in Central and South America during the 1930s. He founded TACA in Tegucigalpa, Honduras. But, after 14 years, the company ousted Yerex and moved its headquarters to El Salvador. Before that, the company had already created an empire of little carriers like TACA Colombia, TACA Venezuela, Aerovías Brazil, and TACA Airways Panamericana.
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During the 20th century, TACA competed against the Costa Rican airline LACSA created by Pan American Airways. Both carriers went back and forth, with LACSA gaining the upper hand for a while because El Salvador was in the midst of a civil war.
TACA, which was initially owned by the Salvadorian Government, was sold to a US company and later on rebought by El Salvador.
In the 90s, LACSA got into trouble, and TACA finally became the Costa Rican airline owner in 1995. Both Central American airlines merged under the TACA brand and liveries.
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Why was Avianca interested in El Salvador?
In 2009, Avianca and TACA surprised the world when they announced a merger. Back then, Avianca had already left its first Chapter 11 reorganization (which started in 2003). The combined fleet of both carriers totaled 129 planes, mainly Airbus A320 family aircraft. It also flew to over 100 destinations in America and Europe. The objective was to create a single airline under one powerful brand.
The Salvadorian businessman Roberto Kriete was the owner of TACA since the 90s. Meanwhile, German Efromovich owned Avianca. On a side note, Kriete still holds majority ownership in Avianca nowadays, while Efromovich was ousted last year.
Both businessmen agreed to merge the carriers joining the hubs they had in Costa Rica, El Salvador, Peru, and Colombia.
The power of the mergers
After the 2001 and 2009 crisis, many airlines in the world merged. In Latin America, there was the case of LAN and TAM, which led to LATAM’s birth. For example, in the US, American Airlines merged with US Airways in 2013, among others like United and Continental.
In 2010, Edwin Lane wrote for the BBC about the importance of airline mergers. He said,
“The simple answer is that airlines urgently need to cut their costs, and mergers are seen as the easiest way to do it, without the airlines losing out to the competition.”
For Avianca and TACA, the merger allowed them to create the second most important airline in Latin America. TACA had a powerful grip in Central America and only had one real competitor in Copa Airlines. Meanwhile, Avianca had access to Colombia and Peru, and Brazil, with OceanAir, which eventually would become Avianca Brazil.
From a brand point of view, Avianca and TACA were in a unique position. Both carriers were among the oldest in South America, so they had deep roots in people’s minds. In that sense, the seniority of Avianca triumphed over TACA, retaining the name. To some degree, Avianca is the survivor of the mergers of many South American carriers. OceanAir, TACA, LAHSA, SCADTA, SAM Colombia, and VIP Ecuador, all of them are, nowadays, in the DNA of Avianca.
Did you ever travel with TACA? How was it? Let us know in the comments.