Allegiant and VivaAerobus set to team up in new alliance

Allegiant and VivaAerobus have announced that the two carriers plan to establish a new alliance in North America. The two ultra-low-cost carriers made a joint application to the U.S. Department of Transportation (DOT) seeking approval for a commercial airline alliance that would expand low-cost travel between the United States and Mexico. In addition, the new commercial agreement would give Allegiant an equity stake in VivaAerobus. 

Both carriers will coordinate across all areas of each other’s airline operations including codesharing, scheduling, information systems, marketing, and loyalty programs. The two airlines aim to provide seamless access and benefits for customers of both airlines. In addition, Allegiant will invest USD$50 million in VivaAerobus, with Allegiant Chairman and CEO, Maurice J. Gallagher expected to join VivaAerobus’ Board of Directors. 

However, all commercial agreements and transactions are subject to clearance by U.S. and Mexican competition authorities. The two carriers stated that they expect to receive authorization from the DOT in the United States and Mexico’s Federal Economic Competition Commission by July 2022. Allegiant and VivaAerobus hope to offer flights under the alliance by the start of the first quarter of 2023.

As it stands, there are only two alliances involving U.S. and Mexican carriers. Currently, Frontier Airlines and Volaris have a codeshare agreement, while Delta Air Lines and Aeromexico have a Joint Venture Agreement, while Delta Air Lines also owns a 49% stake in Aeromexico.

At the moment, Allegiant does not operate in Mexico. The alliance would enable the carrier to broaden its travel offerings to vacation destinations such as Los Cabos and Cancun. On the other hand, VivaAerobus will gain access to Allegiant’s network and point-of-sale processes, allowing the Mexican low-cost carrier to grow its customer base in the United States. 

The new alliance will likely add new transborder routes and nonstop competition. There are over 250 new potential route opportunities that the airlines have identified in their DOT application. However, both Allegiant and VivaAerobus will likely announce specific routes at a later date, once their application has been approved.

Meanwhile, no other country pair has recovered as fast as the United States and Mexico. Up until October, airlines in both countries had recovered around 92% of their pre-pandemic levels. This recovery rises to 98% for U.S. carriers. The strong recovery in flight operations in both countries is mainly due to the strong demand for leisure and visiting family and relatives.

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• Source: https://aeronewsx.com/allegiant-and-vivaaerobus-set-to-team-up-in-new-alliance/