Bankrupt LATAM Airlines and Avianca Holdings are dramatically retrenching their once grand ambitions amid the COVID-19 pandemic, reducing competition in Latin America as they mull once-unthinkable cooperation with rivals.
One airline that could stand to benefit is Chile-based JetSMART, which is considering entering Brazil’s domestic market.
Indigo Partners founder Bill Franke told Reuters he expects to look into helping finance Avianca’s restructuring. That could bring Avianca closer to JetSMART, keeping the Colombian airline’s markets safe from competition. Avianca declined to comment.If JetSMART expands to Brazil, it would arrive as competition is diminishing. Last year, LATAM and Gol fought to keep Azul from entering a key Sao Paulo airport.
The current partnership applies only to non-overlapping routes, but LATAM said it is “open to evaluating the possibility of the eventual future expansion of this code-share” to overlapping routes. Gol CEO Paulo Kakinoff said code-share agreements - in which two or more airlines publish and market the same flight sharing one aircraft - will reduce air-travel supply, “which will benefit all of us.”“It could be the first step for deeper integration, even a merger,” said Andre Castellini, an aviation consultant at Bain & Company.
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