Star Alliance eyes Azul's network to fill its Brazil gap
Star Alliance keeps getting burned in Brazil. Varig, its first Brazilian member, left the alliance in 2007 as it was headed towards shutting down; TAM joined in 2010 only to depart for Oneworld when it merged with LAN Airlines in 2014; and Avianca Brasil left in August, several months after ceasing operations.
The alliance's checkered history in Brazil, however, does not make South America's largest aviation market any less important to the global partnership.
Azul, the third largest carrier in Brazil, is on Star's radar as it looks to broaden its network proposition in the market, Star CEO Jeffrey Goh told TPG at the Airline Passenger Experience Association (APEX) expo in Los Angeles on Monday.
"The question is the connectivity proposition," he said of the carrier. An airline's network and what it adds to Star is one of the two main criteria by which the alliance measures all potential new members, the other being its frequent flier database, explained Goh.
Azul has its largest hub at Viracopos Campinas International Airport (VCP) that, while in the greater São Paulo metropolitan area, is nearly 60 miles from the city center. The facility is nearly 70 miles from São Paulo Guarulhos International Airport (GRU), the city's main international gateway, making connections between the airline's hub and other Star member flights lengthy at best.
Goh cited Azul's Viracopos hub as a challenge to Star membership but added that the equation has changed since the collapse of Avianca Brasil in May.
Avianca Brasil's exit has opened slots at Brazil's busiest airports, including Guarulhos and Congonhas (CGH) in downtown São Paulo, that Brazilian regulators appear inclined to award to non-incumbent airlines. Azul already acquired enough slots at Congonhas to launch a shuttle on the country's busiest route to Rio de Janeiro's Santos Dumont Airport (SDU) in August.
Related: Azul Launching Shuttle Service Between Sao Paulo and Rio de Janeiro
Azul already has relationships with several Star members. The airline codeshares with United Airlines, which also owns an equity stake in the Brazilian carrier, and it is working on a joint venture with TAP Air Portugal.
However, despite Star's interest, it takes two to samba. An Azul spokesperson told TPG that the airline is not interested in joining the alliance at this time.
The comment echoes ones made by Azul CEO John Rodgerson in an interview with a local publication in August where he questioned the benefits of a global network when Azul is focused on the Brazilian market.
Azul is interested in deepening its bilateral relationships, particularly with TAP and United, added Rodgerson.
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The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
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- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month