Issue No. 863

South America's Tangled Web

Abra Spins Out South American Consolidation With Avianca, Gol, Sky, and Viva

Pushing Back: Inside the Issue

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. You read that right. Elsewhere in this issue, the U.S. industry grapples with the pilot shortage, and the blame game continues.


"We haven’t really spent a lot of time thinking about the spider web that the Abra news presents to all."

Pedro Heilbron CEO of Copa Airlines

The Airline Weekly Lounge Podcast

Tempers are flaring as airlines, unions, and even Congress point fingers at who’s to blame for the pilot shortage. Edward “Ned” Russell and Madhu Unnikrishnan discuss an innovative program at Southern Airways Express, as well as why Mesa CEO Jonathan Ornstein may have a point about the 1,500-hour rule. Later, the pair look into the great summer ahead for the European Big Three, and why Azul is having a banner year. Listen to the episode, and go here for the full archive of the Airline Weekly Lounge.

Weekly Skies

Two of South America's largest airlines, Avianca and Gol, plan to combine to create a European-style aviation holding company to dominate air travel in Latin America.

Sky Money

China Eastern Airlines plans to raise up to 15 billion yuan ($2.2 billion) through an equity issue. The carrier will issue up to 5.66 billion new shares on the Shanghai Stock Exchange to certain pre-approved investors. Proceeds will be used…

State of the Unions

Outgoing Allegiant Air CEO Maurice Gallagher shared a blistering takedown of the U.S. pilot production pipeline in his last letter to shareholders.

Jet Green

Amsterdam Schiphol Airport is emerging as more than just an airline hub. The airport is becoming a center of sustainable aviation fuel, or SAF, in Europe with a new 52.5 million gallon offtake agreement between United Airlines and Neste. The…

Routes and Networks

Wizz Air is looking east for its next potential subsidiary. The Romanian discounter has signed a memorandum of understanding with Saudi Arabia's Ministry of Investment to "explore airline market development opportunities" in the country. The pact is part of Saudi…

Landing Strip

Citing the impact of Covid-19 on its ability to "safely manage" operations, the operator of London Heathrow is implementing capacity restrictions on flights through Terminals 2, 3, and 5 at the airport through July 3. Passenger numbers will be limited…


Lufthansa is mixing up its Boeing order as the manufacturer struggles with getting regulatory approval for its largest aircraft, the 777X. The German airline now is adding seven 787-9s due in 2025-2026.