South America’s Tangled Web

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May 16. An argument can be made that South America is a laboratory for airline industry innovation. This is due in part to more liberal ownership and control laws in the region than in many other parts of the world. About a decade ago, the airlines that became Avianca and LATAM showed the world what transnational mergers could look like. And now enter ABRA, a holding company that knits together Avianca, Gol, Viva, and Sky, in a sort-of merger that spans almost the entire continent. Unlike the earlier wave of consolidation that created Avianca and LATAM, ABRA’s airlines would continue to operate as discrete entities, much like Air France-KLM, Lufthansa, and IAG do in Europe. Much remains unknown about ABRA, and doubtless, the new group will encounter many hurdles before it’s complete, but it’s already shaking up the market.

Meanwhile, ABRA’s competitors are not standing still. Panama’s Copa, which connects South, Central, and North America over its Tocumen hub, is reporting profits and could fly more than 80 percent of its 2019 capacity in the second quarter. This comes after the airline was all but grounded for months during the pandemic, and is proof, its executives say, that its connecting model remains solid. Azul may have its best year ever this year.

Source: Airline Weekly

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