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.