LATAM and Azul announce unexpected codeshare agreement
With increasing debts, Brazilian airlines will share routes and mileage programs starting in August
The crisis caused by the coronavirus pandemic led to an unlikely partnership in Brazilian commercial aviation. LATAM and Azul announced on Tuesday a codeshare agreement that will include 50 domestic routes starting in August. The two airlines also included their frequent flyer programs, which bring together nearly 50 million customers. At first, LATAM and Azul will offer codeshare on routes where the two do not compete, allowing passengers to use both check-in and baggage drop-off areas.
“With Azul’s highly connected air network serving many destinations in Brazil and LATAM’s hubs, our fleet and network complementarity will offer customers the widest range of travel options,” said John Rodgerson, CEO of Azul.
“As a sign of LATAM’s long-term commitment to the Brazilian market, this codeshare agreement will offer customers access to the largest network of flights in the country’s history. We understand that the COVID-19 crisis requires innovative responses to help boost the region’s economy and today’s announcement is part of our contribution to this effort,” says Jerome Cadier, CEO of LATAM Airlines Brasil.
Before the COVID-19 crisis, LATAM and Azul served a total of 137 destinations in Brazil with 298 routes and 1,632 daily departures. In recent months, however, the two companies have operated with around 10% of the original network, although they are gradually resuming domestic and international flights.
The announcement is surprising due to the fact that LATAM, as well as Gol, intensified the rivalry with Azul, especially in the competition for slots in Brazilian central airports. The climate became so tense that Azul left a local airline association, Abear, accusing it of defending only the interests of its competitors.
However, the serious financial situation of the airlines has made these disagreements in the background. Although it states that it is making cost cuts and preparing for a bad scenario, Azul hired a consultancy specialized in bankruptcy protection processes. The LATAM group, in turn, filed for Chapter 11 protection in the USA to renegotiate its debts, especially with lessors.
In an interview with the Panrotas website, Rodgerson justified the choice of LATAM because there was less overlapping of routes than Gol. In his view, the partnership will be beneficial for companies and passengers as it allows for a more efficient operation in times of crisis.
Although the airlines claim that the operations of the two groups remain separate, including setting ticket prices, the companies have left the way open to expand the agreement and also include international routes.[DISPLAY_ULTIMATE_SOCIAL_ICONS]