Star Alliance Kicks Brazil’s Varig Out

Varig, Brazil’s former flagship carrier, has been forced to leave the Star Alliance, in a move that could leave the world’s largest airline grouping without a Latin American partner for 18 months or more.

The Brazilian carrier has shrunk after coming close to collapse and being sold to new owners earlier this year. Star said the revived carrier could apply to become a member in the future.

"We are looking once again at securing a Latin American partner in the alliance," said a Star official. He said new applications typically take 12 to 18 months to process.

Star, which is led by Lufthansa, United Airlines and All Nippon Airways, will have 20 members following Varig’s departure at the end of January, and did not comment immediately on whether it would seek a replacement in one of the world’s fastest-growing aviation markets.

Its lead members and TAP Air Portugal have extensive networks to the region, but the absence of a local presence could leave it at a disadvantage to oneworld, the rival grouping led by American Airlines and British Airways, which counts Chile’s LAN among its members.

The airline industry is now dominated by three alliances – Star, oneworld and SkyTeam – which were created to extend the route networks of their members and provide cost and revenue benefits through joint marketing and purchasing.

Analysts said Varig’s ejection reflected the pressure on alliances to provide consistent standards of service and operation in their pursuit of "seamless" travel options for passengers.

However, the alliance system is under strain as partners restructure and expand into one another’s territory. Aer Lingus left oneworld earlier this year, and the equity swap between Air China and Cathay Pacific – which are in rival alliances – has led to speculation that the Asian carriers will have to choose a single grouping.

Varig once dominated Brazil’s airline industry, but long-running financial problems saw it auctioned to a group of local and US investors earlier this year.

The "new" Varig secured its operating license earlier this month, but now operates 15 aircraft on just 13 domestic routes and four international sectors, though has plans to double its fleet.

Most of its routes have been taken over by Tam and Gol, two fast-growing low-cost carriers. Tam now operates flights to Europe and the US and BRA, a new entrant, has launched services to Europe. (FT)

Tags:

Ads

You May Also Like

Dominican Republic Gets Loan from Brazil for Aqueduct

Brazil’s National Economic and Social Development Bank (BNDES) will provide US$ 64.7 million to ...

Ten-Story High Floating Platform Goes in Service off Brazil’s Coast

Brazil's government managed hydrocarbons corporation Petrobras began yesterday oil and gas extraction from the ...

Brazil Kept on Watch List for Copyright Piracy

U.S.-based Defenders of Property Rights commended this morning’s decision by the office of the ...

A London Touch to Tour São Paulo

Looking out at the city as the wind caresses your face, the sun or ...

Friends sharing a Brazilian caipirinha

Brazil, Its Food and Drinks, Are All Acquired Tastes

Before arriving in Brazil I was given a cookbook on Brazil’s cuisine from my ...

Brazil to Spend US$ 60 Billion in Ten-Year Energy Plan

A Ten-Year Plan for the Electricity Sector, which has just been released by the ...

In Brazil There Are Less Than 2 Public Defenders for 100,000 Inhabitants

A study by Brazil’s Ministry of Justice suggests that Brazil should have six times ...

Wave of bankruptcies

More than 50 years after its creation, Banco Nacional, the seventh largest financial institution ...

Police at work at Favela da Maré, in Rio, Brazil

Now You Can Buy Protection in Brazil from Police-Linked Militias

Militias formed by police, ex-police officers, firemen, prison workers, and military personnel have expelled ...

Spain Ready to Help Brazil Enforce Mandatory Classes of Spanish

The first vice president of Spain, Maria Teresa Fernandez de La Vega, says her ...