Airlines Unite: A Throuple Formation?

Previously, I delved into Azul’s plunge into Chapter 11 bankruptcy. Initially, it doesn’t appear earth-shattering since their flights keep soaring through the skies, seemingly unaffected. It’s more of a financial shuffle than a cause for passenger alarm.

Yet, here’s the juicy tidbit — American Airlines is stepping up to back Azul financially. And here’s the kicker: they have no current partnership, zilch in common. Curious, isn’t it?

Let’s dive into what fireworks might go off from this. If you’re as keen on how airlines rub elbows these days, keep your eyes peeled on Latin America. It’s sizzling with potential alliances.

American & United Tackle Latin America: A Puzzle of Strategies

Once upon a time, American reigned supreme in Latin America, lording over a vast network and cozying up to LATAM, the big boss regional airline.

That was until 2019 rolled around, and Delta pulled a heist — swooping in and buying a chunk of LATAM. Cue LATAM leaving the oneworld alliance to cozy up with Delta. A pricey maneuver on Delta’s part, but it bolstered their strategy.

Since then, American and United have been solo-roaming in Latin America, trying to piece together suitable plans.

American, ever the eager suitor, put stakes in Brazil’s GOL, owning a smidgen over 5%. But let’s be real — with GOL operating bare-bones 737s and zero business class, it’s a mere shadow of the LATAM glory days. Still, any port in a storm, right?

United, on the other hand, has woven a loose network with Avianca and Brazil’s Azul, all while keeping Panama’s Copa in their back pocket for Central America flights. But these alliances are merely surface-level:

• Avianca and Copa boast extensive networks, but United doesn’t bother much with the connective traffic magic or joint ventures
• United’s dance with Azul is probably the most laid-back waltz — just a nod via frequent flyer reciprocity, but hardly any synchronized flying

Azul, GOL, and Avianca: A Tangled Web of Troubles

On the Latin American frontlines, shifts are inevitable. These airlines are navigating through stormy skies. Both Azul and GOL are wrestling under the Chapter 11 cloud — Azul just entering, GOL gearing up to exit soon.

Initially, Azul and GOL flirted with the idea of merging, but then bankruptcy tossed cold water on those plans.

Avianca, not directly embroiled here, still merits a mention — kind of like an extended family member at a holiday bash. Since both Avianca and GOL are majority-owned by the same group, there’s potential for tango partners, if the stars align. Plus, American and a few European airlines have stakes in GOL, adding to this intricate ownership soup.

Sometimes, having multiple brands might seem a savvy strategy, Ruling them all separately is an option, but, if the merger horizon beckons and creates a grander opportunity, well, decisions might sway.

How These Airline Duets Might Rearrange

Allow me to stare into my aviation crystal ball and predict where these flights of fancy are headed. Of course, I could miss the mark, but here’s my hunch.

United doesn’t appear to be chasing any Latin American expansion feverishly. If United wanted to cozy up closer with any Latin figures, Avianca has been right there waving. For now, it seems not high on United’s to-do list, although that might change if competition forces its hand.

Meanwhile, American stumbles through the aftermath of losing LATAM, still scrambling for a decent LatAm trajectory. True, Avianca and LATAM are off-limits, while others lack the geographical oomph or global punch.

Thus, American dabbles with GOL investments and now seems to have its sights set on Azul. How this tale unfolds might pivot on whether Azul and GOL eventually become a duo.

Meanwhile, rumor has it United is lending Azul a hand with restructuring too — plausible, given their existing partnership. After all, Azul can twirl with both American and United; nothing’s stopping them.

For Azul, the problem child seems to be its base: Viracopos (VCP) in Brazil, rather than the widely frequented Sao Paulo Guarulhos (GRU). Viracopos caters to the same kind of crowd but doesn’t enjoy the sparkling reputation. If partnerships pan out, flights should ideally mesh harmoniously.

Could a daring US airline bet big on making Viracopos charmingly international, or might we see Azul’s wings unfurl toward Sao Paulo? The latter is tricky — Guarulhos is already jam-packed.

That cheeky suggestion about connecting American passengers to Azul flights via US hubs sounds good in theory. But for American, the carrot of substantial benefits just isn’t dangled enticingly enough — unless a joint venture reshapes the game board entirely.

In any case, this aviation soap opera seems brimming with unexpected plot twists, as airlines jostle for alliances, dollars, and dominance.

Bottom Line

Latin America’s airline scene teeter-totters with developments, especially now, as American courts Azul following its GOL flirtation. Not to be left out, United’s tangled up with Azul and Avianca, the latter sharing a primary owner with GOL. Azul and GOL’s past pondering of a merger only thickens this plot.

Whatever may unfold, brace yourself for a wild aviation rollercoaster over the next few years in South America….

What’s your take on these high-flying maneuvers in Latin America?