BRAZIL: Alitalia And Azul Ink Codeshare

Azul and Alitalia have signed a codeshare agreement which will significantly increase route options for both airlines’ customers. The agreement will be particularly important for Alitalia, which continues to struggle financially.

The codeshare deal will provide both airlines access to each other’s route network, which will particularly important for Alitalia. The Italian flag carrier hasn’t been profitable for a while now, and efforts to get it back on its feet have hit a number of hurdles.

Codeshare deals are signed between airlines all the time. Most of the time they’re signed by airlines located in neighboring regions.

A codeshare agreement allows one airline to sell seats on another airline’s routes as if they were their own. Gaining access to routes outside of their normal operating area is the main objective.

In the case of Azul and Alitalia, the new codeshare deal will allow them to offer a number of new routes on the other side of the Atlantic.

Alitalia will immediately gain access to the huge number of domestic destinations served by Azul.

According to Abhi Shah, Azul’s vice president of revenue, Alitalia customers will be able to connect to Azul’s more than 100 domestic destinations, more than half of which are exclusively served by Azul.

This could be a lucrative prospect for Alitalia, as it will allow it to connect Brazil’s large Italian/Italian heritage population with Italy itself.

On the other hand, Azul will be able to increase its trans-Atlantic presence, a key objective the airline has publicly stated it is aiming towards.

Azul also announced plans for a joint venture with TAP Air Portugal earlier this month. As the largest operator of scheduled trans-Atlantic flights between Europe and South America, TAP Air Portugal will be a key strategic partner for Azul.

Although the codeshare agreement with Azul will offer Alitalia customers many new South American destinations, Alitalia itself isn’t doing so well.

This year it seems there have been reports of new parties showing interest in an Alitalia acquisition every other week. But none of the rumors have amounted to much so far.

From easyJet and China Eastern in March to Lufthansa and even the owner of Rome’s S.S. Lazio, Alitalia has struggled to find investors to keep it afloat.

It seems Delta Air Lines has come the closest to signing an investment deal with Alitalia, but recent news of a larger bid from Lufthansa may have scared the American airline away.

Regardless of who invests in Alitalia, the airline still needs to sort out a new business plan for its relaunch.

While it seems the news of a codeshare agreement with Azul will be seen as a positive, there are a number of other much bigger issues to sort out before Alitalia can become a success again.

OMAN: Oman Air And Kenya Airways have Penned A Codeshare Agreement

Oman Air, the flagship carrier of the Sultanate of Oman, has signed a codeshare agreement with national carrier Kenya Airways (KQ) covering services between Muscat and Nairobi.

The agreement which came into force from August 28 will make it easy for the Kenya Airways customers to access Muscat directly from Nairobi, the two airlines said on Wednesday.

A codeshare is a business agreement between two or more airlines which allows them to sell seats on each other’s flights and expand their network.

Each airline publishes and markets the flight under its own designator and flight number as part of its timetable or schedule.

Oman Air launched its flights to Nairobi in March this year targeting travellers to and from the Middle East.

On the Nairobi–Muscat route, KQ will place its codeshare flight numbers on the Oman Air operation on Tuesday, Wednesday, Friday and Sunday.

Oman Air is very happy with the implementation of this codeshare agreement with Kenya Airways.

Through this partnership, Oman Air extends its exemplary services to guests of Kenya Airways, said Oman Air chief executive Paul Gregorowitsch.



Tourism Observer

TURKEY: Tourism Revenue Continues To Drop As Turkey Airlines Signs Codeshare With Middle East Airlines

Turkey's tourism industry continues to suffer in 2017. Most recently we published that Turkish tourism revenue and arrivals continue to drop in first quarter of 2017. Addition to those, Turkey has also dropped one spot to fourth as the top performing destination in the global Muslim travel market.

The Mastercard-CrescentRating Global Muslim Travel Index (GMTI) 2017, which was officially launched on May 3rd in Jakarta, saw Turkey lose its position behind Malaysia who kept the top spot while Indonesia moved up to third place in the overall rankings.

The Index, which covers 130 destinations, showed a number of non-Organisation of Islamic Cooperation (OIC) destinations in Asia move up the rankings, a result of the concerted effort to adapt their services to cater to and attract the Muslim travel market.

Singapore retained its pole position for the non-OIC destinations, with Thailand, the UK, South Africa and Hong Kong rounding up the top five. Japan moved up two places to take sixth spot with Spain entering the top 10 for the first time.

The research showed that the Muslim travel market will continue to grow at a fast pace with the sector estimated to grow to US$220 billion in 2020. It is expected to grow a further US$80 billion to reach US$300 billion by 2026.

It was also revealed that in 2016, there were an estimated 121 million Muslim visitor arrivals globally – up from 117 million in 2015 – and this is forecasted to grow to 156 million visitors by 2020 representing 10 percent of the travel segment.

Asia has remained the leading region in the world in terms of attractiveness to Muslim tourists with an average GMTI score of 57.6, with Africa coming in second place at 47.0, followed by Oceania (43.8), Europe (39.9) and the Americas (33.7)

Fazal Bahardeen, CEO of CrescentRating & HalalTrip, said the GMTI continues to reveal detailed insights which will assist destinations in better understanding the shifting needs of the segment.

“We are definitely seeing the influence of a new breed of young travelers, millennials and Gen Z who are combining technology with a real desire to explore the world while still adhering to their faith-based needs,” he said.

“They will be the driving force for the next phase of growth which destinations like Turkey will have to embrace and implement measures accordingly to make progress in the rankings going forward.

“These younger travelers want greater choice, unique experiences and constant connectivity which can be seen with the growth of other Muslim lifestyle segments such as Halal food and modest fashion which link perfectly with the travel market.

"As Muslim travel continues to diversify, keeping on top of the demographics of the travelers though these insights from the GMTI will be paramount for destination management teams and decision makers who are ultimately sourcing solutions for this market."

Safdar Khan, Division President, Indonesia, Malaysia & Brunei, Mastercard said, “With an overall expenditure of around US$155 billion in 2016, the Muslim travel market remains a strong driver for the continued growth in travel across the world. It’s constantly evolving with major forces such as changing demographics and digitization shaping the way the industry is progressing.

“Technology for example is improving the experiences of Muslim travelers every step of the way from the planning phase to the experience phase and the sharing phase.

There is a huge opportunity for service providers to innovate and adapt their offerings to cater to the unique needs of this segment at each of these phases across multiple touch points.

At Mastercard, we’re committed to supporting the growth of this segment and are working with our partners to constantly develop new and innovative programs and offerings for Muslim consumers.”

Middle East Airlines (ME) and Turkish Airlines (TK) signed today a codeshare agreement. The agreement will be effective as of May 15th, covering routes between Turkey and Lebanon, and expanding the travel opportunities for the passengers of both airlines.

The signing ceremony took place at MEA Head Quarters in Beirut. Middle East Airlines Chairman and Director General, Mohamad A. El-Hout and Turkish Airlines’ Deputy Chairman and CEO, Bilal Ekşi signed the agreement in the presence of senior officials from both sides.

This new codeshare agreement will broaden the commercial partnership between the two companies and their respective countries. At the same time, passengers of both airlines will be given more travel options between Lebanon and Turkey.

Under the terms of the agreement, Middle East Airlines and Turkish Airlines will place their codes on the flights of Middle East Airlines on Beirut – Istanbul v.v. and on the flights of Turkish Airlines on Istanbul – Beirut v.v. route. Turkish Airlines will operate three daily flights on Istanbul-Beirut-Istanbul route, while MEA will be operating 2 daily flights Beirut - Istanbul –Beirut route.

MEA Chairman, Mohamad A. El-Hout expressed the importance of this agreement, as being a step in stimulating the economic cooperation between Lebanon and Turkey, and will enable both airlines to further accommodate the needs of their loyal passengers.

It is worth highlighting that this agreement is signed between two members of two different airline alliances, which prove the ability of both airlines to expand their networks to the cities not served by their aircrafts.

Turkish Airlines’ Deputy Chairman and CEO, Bilal Ekşi said that; “We are pleased to sign this codeshare agreement with Middle East Airlines and aim to improve our partnership to maximize the travel opportunities offered to our passengers through our flight networks.

Moreover, we believe that this partnership with Middle East Airlines will not only maximize the travel opportunities offered to our passengers through the networks of both airlines but also bring enormous benefit from a commercial perspective.”

Mr. Ekşi also stressed that travelers of both airlines will experience a streamlined level of services covered by the agreement onboard two modern fleets of aircraft and he expressed his hope that this step will be the first on the way to further enhancing relations between two airlines in the future.

MEXICO: Delta Air Lines Closes $620m Investment In Aeromexico

Delta Air Lines announced the successful completion of its cash tender offer that commenced on Feb. 13, 2017 through the Mexican Stock Exchange to acquire up to an additional 32 percent of the outstanding capital stock of Grupo Aeroméxico S.A.B. de C.V. for MXN $53.00 per share, which expired at 1:00 p.m. Mexico City time on March 10, 2017.

The offer was oversubscribed, with Delta acquiring 228 million shares representing 32 percent of the outstanding shares of Grupo Aeroméxico and 39.8 percent of the shares tendered in the tender offer, for an aggregate purchase price of approximately USD $620 million/MXN $12.1 billion.

All conditions to completing the tender offer, including receipt of required regulatory approvals in Mexico, have been satisfied.

With the completion of the tender offer, Delta owns 36.2 percent of the outstanding shares of Grupo Aeroméxico and holds options to acquire an additional 12.8 percent for a total of 49 percent of the outstanding shares of Grupo Aeroméxico.

“We are pleased to successfully complete the tender offer,” said Ed Bastian, Delta’s Chief Executive Officer. “This is yet another milestone that strengthens the Delta- Aeroméxico relationship as we move toward implementing our joint cooperation agreement in the second quarter.”

Delta and Aeroméxico launched their first codeshare in 1994.

In 2011, Delta entered into an enhanced commercial agreement with Aeroméxico, and in 2012, Delta invested USD $65 million in shares of Grupo Aeroméxico, the parent company of Aeroméxico.

In March 2015, Delta and Aeroméxico entered into a joint cooperation agreement relating to flights between the United States and Mexico.

That joint cooperation agreement has been reviewed by regulatory authorities in the U.S and Mexico and will be implemented in the second quarter.