Star Alliance targets Latin America - invites TAM for membership
08 Oct 2008
Star Alliance is seeking a re-entry into the Latin America sector after issuing a formal invitation to Brazilian carrier TAM to become its 24th member. The alliance also said it would seek to increase its presence in the region further next year.
Star has been without a member in the region since 2006 when it expelled Varig, a leading Brazilian carrier which went into bankruptcy protection in 2005.
TAM currently flies to 42 domestic and 16 international destinations and will add a further 36 to the Alliance network. The carrier has codeshare agreements with TAP Portugal, Lufthansa and United Airlines. Yesterday, it also announced a new partnership with Air Canada.
TAM operates a fleet of 116 aircraft.
"We are talking about a country and a region of the world which cannot be ignored," said Jaan Albrecht, CEO, Star Alliance. He pointed out that Brazil alone accounts for 30 per cent of commercial aviation revenue in South America.
As for TAM the SaoPaulo-based carrier is the Southern Hemisphere's largest airline and is also listed on the New York Stock Exchange (TAM S.A.). The carrier holds a 20 per cent market share on the continent itself, and around 74 per cent share of Brazil's international traffic.
It also commands a 54.2 per cent share of the domestic market.
TAM CEO David Barioni said Star membership will help it grow even stronger. "Eight years ago we were Brazil's fourth-biggest carrier. Now we are . . . number one," he said. "This is a very important step forward for TAM, as through our alliance membership we will gain further international brand recognition."
According to Barioni, the airline will become a full Alliance member in a12-18 month period. He said that the first year of membership itself should allow it to earn an additional $60 million in revenue.
As for Albrecht, he mentioned Avianca, Copa and TACA as other carriers in the region being looked at as potential members. He said that announcements about new members could be made in 2009.
As for Europe, Star is in talks with Russia's S7 Airlines and Rossiya about possible membership. Should Alliance member Lufthansa take over Alitalia then it would also include the struggling Italian flag carrier.
Air India and Continental Airlines are the new members preparing to enter the 21-member Star Alliance and will become its 22nd and 23rd members.
