AeroMexico airline eyes deals to improve efficiency

* AeroMexico looks for stock deals as recession weighs

* Carrier could team up with local or foreign players

By Tomas Sarmiento

MEXICO CITY, Oct 7 (Reuters) - AeroMexico, one of Mexico's largest but struggling airlines, said on Wednesday it was interested in stock deals with local and foreign players to improve efficiency and help get through the global downturn.

AeroMexico and rival Mexicana, both hit by the world recession and competition from low-cost domestic carriers, may not survive unless they merge together or with other players, many experts warn.

"What we are analyzing, beyond commercial alliances, are investment alliances where it isn't a merger but stock stakes between two groups," AeroMexico Chief Executive Andres Conesa told reporters at an event in Mexico City.

Hit by the economic slowdown, airlines around the world are struggling with weak demand and volatile fuel prices. Some in recent years have turned to acquisitions to increase economies of scale.

"We are looking at alternatives in Mexico and globally," Conesa said.

Citigroup (C.N) and local investors bought money-losing AeroMexico from Mexico's government in 2007 for about $250 million.

Also on Wednesday, Colombian airline Avianca and El Salvador-based TACA said they will merge under a single holding company to help cut costs.

Chilean airline LAN LAN.SN LFL.SN, one of Latin America's biggest air carriers, said in August it was interested in deals to help it expand in Colombia, Brazil, Mexico and Central America. (Writing by Noel Randewich; Editing Bernard Orr)