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TAM upbeat on oneworld shift

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TAM upbeat on oneworld shift

TAM upbeat on oneworld shift
June 02
08:25 2014

DOHA —  The move by TAM Airlines from Star Alliance to the oneworld alliance at the end of March was smooth from a logistics perspective. The company adjusted its codeshare and loyalty program integrations with minimal disruptions to passengers or flight operations. And now, a couple months into the new partnership, the carrier is indicating that the shift has been mostly positive for them financially as well. Speaking at the 2014 IATA Annual General Meeting CEO Marco Bologna was very optimistic on the changes and the potential presented.

Bologna acknowledged that the alliance shift was driven by regulatory requirements but also suggested that there are strong market justifications for the move, “Our decision to move to oneworld was based on choosing an alliance which can provide a better partnership in the US and European markets.” Adding connectivity offered by American Airlines is one of the more significant financial benefits the switch allowed according to Bologna.

But the move was not only about dropping old partners and adding new. For TAM, the shift to oneworld was one which allowed the company to increase the number of airline partners it works with. Bologna appreciates the change in operating culture realized in the transition, noting that “oneworld is more flexible … we’ve maintained twelve codeshare partners outside of the alliance, including Lufthansa.”

With a revenue bump of 4% based on the alliance partnerships, plus the additional codeshare partners operating still with TAM, the company expects to realize solid financial returns over the long term. Such a bump is not guaranteed and it will require effort from the carrier to get there, but Bologna is confident that TAM will get there.

 

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Seth Miller

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