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Best of Airways — oneworld Welcomes TAM and US Airways

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Best of Airways — oneworld Welcomes TAM and US Airways

Daniel Carneiro

Best of Airways — oneworld Welcomes TAM and US Airways
September 25
14:54 2017

By Jeff Kriendler • Airways Magazine, July 2014


“TAM and US Airways ended their membership in theStar Alliance on the previous day of the event.”

TAM Airlines and US Airways officially joined oneworld on March 31 at a signing ceremony and aircraft reveal at São Paulo’s Congonhas Airport, adding nearly 100 destinations to the alliance’s network. The two carriers ended their membership in the Star Alliance on the previous day. The alliance musical chairs was the result of the merger between LAN Airlines and TAM in June 2012, which created the LATAM Airline Group and the fusion of US Airways with American Airlines in December of 2013.

Noting the significance of their transition the new chairman of oneworld’s Governing Board, Willie Walsh, said, “The addition of TAM and US Airways represents the biggest single day of growth since the alliance started 15 years ago. We believe it is the single biggest day for any of the alliances. Brazil is one of the most important markets for all airlines and we know in Brazil we now have a partner with an excellent network.”

CEOs of all oneworld members, except Malaysia Airlines, gathered for the signing ceremony on March 31. PHOTO: Daniel Carneiro.

Marking the addition of US Airways into oneworld, American’s CEO Doug Parker stated that their entrance “is another crucial step towards our progress in integrating American and US Airways into a single carrier.” He noted that having the entire LATAM group in the alliance was significant for the new American, pointing out that American and LATAM codeshare across 150 destinations, making Brazil one of the “most important” international markets served by the world’s largest carrier.

With its regional affiliates, US Airways serves more than 200 destinations and 30 countries with a fleet of more than 620 aircraft. In 2013, the carrier transported 82 million passengers and operated 3,200 flights per day.

TAM’s shift from Star to oneworld came about by regulations imposed by the Governments of Chile, Brazil, and Colombia as a condition for approval of the merger. Regulatory authorities in those countries required the LATAM Group to select Star or oneworld as the alliance choice once the merger was consummated.

LAN has been an anchor for the alliance in South America, having been a member since 2000.  With the joining of TAM, LAN and all of its affiliates, namely LAN Argentina, LAN Colombia, LAN Ecuador and LAN Peru, have already been incorporated into the alliance. TAM’s affiliate in Paraguay, TAM Mercosur, will also join oneworld in the near future, resulting in all passenger airlines of the LATAM Airline Group being consolidated under one alliance umbrella.

“We made the best choice for LATAM,” said Marco Antonio Bologna, TAM’s Chief Executive Officer. “With oneworld, our passengers will have even more benefits on their journeys, including better connections and options for destinations. We have accomplished a seamless transition and now can celebrate this milestone with our customers and our new partners.”

With the additions of TAM and US Airways, oneworld has become the leading airline alliance in South America and the United States. On April 30, SriLankan Airlines also became a member of oneworld which now serves almost 1,000 destinations in 150 countries. oneworld’s combined fleet of 3,300 aircraft provides 14,250 daily flights with VIP lounges at over 600 airports. The annual network structure carries 485 million passengers and generates revenues in excess of U.S. $140 billion.

“This is another crucial step towards our progress in integrating American and US Airways into a single carrier.” 

– Doug Parker, American Airlines CEO.

TAM serves 61 destinations across 16 countries in Latin America, the U.S., and Europe and brings 45 unique destinations within Brazil to the alliance. It is Latin America’s largest airline, having a market share of some 38% of the country’s domestic air market. It also dominates the market for Brazilian carriers operating international flights with a share of 85%. The current fleet numbers 172 aircraft split between 153 Airbus (A319, A320, A321, and A330) and 19 Boeing 767 and 777.

This A320-200 is one of 153 Airbus aircraft in the Brazilian airline’s fleet. PHOTO: Daniel Carneiro.

As reported in Airways June 2014 edition, the Brazilian airline industry has been suffering from overcapacity as the country’s economic growth has cooled. Its carriers have recorded currency losses as the Brazilian Real devalued against the U.S. dollar. The country is now experiencing a spike in air travel during the World Cup and the Real has re-gained almost 5% in value against the US dollar in 2014, indicating the prospects of improved financial results in upcoming reporting periods.

Enrique Cueto, LATAM’s CEO, told journalists at the entry event that inclusion of TAM in oneworld was one of the final steps in the seamless combination of LAN and TAM, but he expects the full integration to take at least two more years. “We still need to equalize the level of services at each carrier, create a unique brand and integrate our IT systems, the core of any airline company,” he noted. Cueto said that the airline would strengthen its operations at São Paulo’s Guarulhos Airport to funnel traffic through its key Brazilian hub for connectivity to cities in Brazil, Europe, and the USA. The Chilean boss also said TAM would study expanding its regional reach in Brazil if airport infrastructures support growth at competitive cost levels and if there is sufficient demand to add capacity.

oneworld’s CEO Bruce Ashby (left), joined by Doug Parker CEO of AA, IAG CEO Willie Walsh and LAN’s CEO Enrique Cueto, welcome Marco Antonio Bologna into the alliance. PHOTO: Daniel Carneiro.

In anticipation of the loss of TAM, the Chief Executive Board of Star agreed late last year to extend Avianca’s membership in the alliance to include its Brazilian affiliate, Avianca Brasil.  The unanimous decision marked the first step in Star’s strategy to bolster its position in the Brazilian marketplace following the withdrawal of TAM. “I am pleased that we have been able to secure Avianca Brasil as an addition to our network in Latin America’s largest country, biggest economy, and most important aviation market,” said Mark Schwab, Star’s CEO. “Avianca Brasil is an expanding carrier and by working together we can build a network which will provide the essential connectivity we are looking to offer, while at the same time allowing Avianca Brasil to increase its international footprint.” Integration teams at Star, Avianca and Avianca Brasil are working to include the Brazilian carrier in the alliance by late 2014.

Star notes that with 12 member carriers serving Brazil, the alliance holds the number one spot in terms of numbers of airlines flying to Latin America’s strongest home market. Air Canada and United offer more than 38,000 weekly flights to over 290 destinations in Canada, Mexico, and the USA.

Avianca also provides services from deep South America and Central America to North America through its hubs in Bogota and San Salvador.  The airline is further looking to expand its European presence by the resumption of its nonstop flights to London in July (in addition to Madrid) and through partnerships with European carriers such as Lufthansa, a fellow Star member.

Star also has a major presence in Latin America through the participation of member COPA of Panama. Through its Hub of the Americas at Tocumen Airport in Panama City, COPA offers a broad network of flights from South and Central America to the U.S. and Canada.

Half-way around the world, the tragedy of MH 370 was felt at the São Paulo ceremonies as oneworld member Malaysia Airlines was not in attendance.

The reason for their absence was understandably noted, with a moment of silence observed for the victims of the vexing loss of their Boeing 777.

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Jeff Kriendler

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