DALLAS – The Federal Economic Competition Commission of Mexico (COFECE) has unconditionally authorized the Commercial Alliance Agreement between Allegiant Air (G4) and VivaAerobús (VB).
The agreement, announced in December 2021, is the first of its kind between two ultra-low-cost carriers and will seek to provide safe and reliable air transportation between both countries with a focus on destinations that do not currently offer nonstop service.
The commercial alliance will allow the carriers to establish cross-functionality with respect to their loyalty programs, code sharing, sales systems, and route networks.
The agreement will also allow G4, which currently does not serve Mexico, to enter and expand in the market and to offer its clients access to world-class vacation destinations in Mexico. In addition, G4 will make a US$50m equity investment in VB and gain one seat on its Board of Directors.
VivaAerobús, which already offers extensive intra-Mexico service as well as services to the U.S. and Latin America, will be able to add services to areas where G4 has a major presence, such as Las Vegas and several cities in Florida.
VivaAerobús will also gain access to G4’s distribution network and point-of-sale processes, thus expanding their U.S. customer base.
While the approval of the Mexican authorities is a crucial step in the process, the joint application requesting approval and antitrust immunity must still be approved by the United States Department of Transportation.
What do you think of this commercial alliance? Be sure to leave your comments on our social medial channels!
Featured image: N246NV, Allegiant Air Airbus A320 @KPVU. Photo: Michael Rodeback/Airways