Trade law: aviation: Colombia - Spain

In 2005 there is a bilateral agreement between Colombia and Spain says that there will be 14 times a week non-stop flights between the countries

(currently operated by Avianca 7 times and Iberia 7 times) and there is a chance of 3 more weekly flights if they operate through Cartagena and for tourists.

In 2005 Air Madrid started selling tickets only in Spain at a very low prices.

Avianca was very terrified with the idea of losing a lot of their market. Then it was announced that the flight route was MAD-BOG-CTG-MAD.

Civil Authority in Colombia did not authorized Air Madrid selling tickets in Colombia (their fares are lower than required for the route). Avianca said Air Madrid should be looking for Spanish Tourists in Spain and not for the Ethnic market (Colombians living in Spain). When their first flight of Air Madrid arrived and Avianca was right: of the 285 passengers on that Air Madrid flight, 210 got off in BOG and only 75 in Cartagena.

The Aeronautica Civil ordered that the flight had to stop in CTG before BOG.  The Air Madrid CEO gave Colombian Authorities 15 days to solve their problems and authorize the flight route MAD-BOG-CTG-MAD or Air Madrid would stop flying to the country.

Iberia is an a special position. Colombia is not the only country in Latin America to have a bilateral avaiation agreement with Spain. For Iberia these agreements make the Latin American market very lucrative. But these treaties requiere that Iberia remains in Spanish ownership. This makes it almost impossible to a foreign carrier to take over the majority of shares of Iberia.