By Marcelo Rochabrun
SAO PAULO, April 5 (Reuters) - A new plan by cash-strapped carrier Avianca Brasil to sell its most coveted airport slots to Brazil's two largest airlines will draw intense antitrust scrutiny, which may delay or derail a pressing cash injection.
Antitrust regulator CADE said on Friday that it could block the plan, which Avianca Brasil hopes could raise some $210 million later this month. The airline filed for bankruptcy protection in December.
Under the plan, Gol Linhas Aereas Inteligentes SA and LATAM Airlines Group would buy Avianca Brasil's airport rights, known as slots, in three high-traffic terminals in Sao Paulo and Rio de Janeiro. Gol and LATAM already control over two-thirds of the slots in each of those three airports.
Representatives for LATAM, Avianca Brasil and Gol did not respond to requests for comment.
Avianca Brasil's plan would raise much-needed funds but is high-risk, lawyers said, and could leave it hanging without quick cash. Creditors will vote later on Friday whether to approve the plan which would allow Gol and LATAM to bid on the assets.
Avianca Brasil would not receive any funds until CADE greenlights the operation, said antitrust lawyer Tatiana Lins Cruz in an interview on Thursday. She said CADE could take up to eight months to analyze a case in which buyers already control more than 20 percent of a given market.
Meanwhile, the airline would have to continue operations with its own money. But Avianca Brasil has been so cash-strapped that it fell behind its payroll in March.
A person familiar with LATAM's thinking said the airlines hoped CADE would approve the deals because they only involve a modest increase in their presence at Brazil's busiest airports.
The new plan is a setback for rival Azul SA, which ranks as Brazil's third largest airline and has a small presence in those three airports. In Sao Paulo's domestic Congonhas airport, Gol and LATAM already control a combined 92 percent of the slots, whereas Azul has just 3 percent.
Azul had struck a preliminary deal with Avianca Brasil to take over the slots for $105 million and had already provided some $8 million so the carrier could meet its March payroll.
But that deal was off once Gol and LATAM came in.
CADE appeared to take a more positive view of an Azul takeover on Friday.
"A scenario where Azul becomes the buyer represents a lower antitrust concern than in a scenario with LATAM or Gol," the regulator said in its report.
The plan could also draw scrutiny from Brazil's civil aviation regulator, because airport slots are not meant to be bought and sold. Azul was planning to buy Avianca Brasil's assets as a single airline, but the new plan would create seven different companies, each holding little more than slots.
"In our view, it is not clear whether the Brazilian Civil Aviation Agency (ANAC) will approve this new structure," wrote analysts at Brazil bank Bradesco BBI in a note to clients. (Reporting by Marcelo Rochabrun Editing by Brad Haynes and Richard Chang)