Iberia and GOL signed (20-Oct-2009) a codeshare agreement that will "enable the Spanish airline to increase significantly its offer in Brazil". Currently, Iberia operates twice daily between Madrid and Sao Paulo and offers a daily Madrid-Rio de Janeiro service. Under the codeshare agreement, Iberia can add its code to GOL services from Rio de Janeiro and Sao Paulo to 13 Brazilian destinations: Belo Horizonte, Brasilia, Curitiba, Florianopolis, Fortaleza, Foz do Iguaçu, Goiania, Manaus, Natal, Porto Alegre, Recife, Salvador de Bahia and Vitoria. The carriers are also evaluating the possibility of a reciprocal frequent flyer programme. [more]
Iberia and GOL sign codeshare agreement
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Latin America has been a weak spot for airlines for more than a year; Brazil’s economy has crumbled and currency fluctuations have driven weakness in demand in some of the region’s other countries. But two of the US’ large global airlines, American and Delta, believe that Brazil in particular has reached an inflection point, and they sense a slow improvement occurring on routes to Brazil due to a rationalisation of capacity in those markets.
After steep revenue declines in its Brazilian markets, American expects it could post positive unit revenue results in those markets during 3Q2016, while Delta is citing positive trends for its Latin American entity that should continue into 2017.
Of course, it will take some time for airlines to reach the levels of revenue performance they enjoyed before Latin America’s economy began to contract, but the start of the slow climb out of the revenue doldrums is a welcome sign for a region that remains one of the most promising over the long term.
Brazil's Azul relies on an arsenal of resources to counter weak domestic demand
Brazil’s third largest domestic airline Azul has been forced to curb its once rapid growth as the country’s economy will endure its second consecutive year of contraction during 2016. Similarly to all Brazilian airlines, Azul has been plagued by soft domestic demand and a sharp currency decline that creates challenges for expenses denominated in the USD – such as fuel and aircraft costs.
Although it will take some time for Brazil’s economy to recover fully from its current recession, some encouraging trends are beginning to take effect. Recently the BRL has gained some ground against the USD, which is a welcome sign for Brazilian airlines.
Azul has used many tools to adapt to Brazil’s current economic slump, including a new relationship with the European airline TAP and equity infusions from foreign investors. It has also show a willingness to lower fares in some markets, particularly to the US, to ensure that it retains a strong market presence once Brazil embarks on a steady path to economic recovery.