American Allegiant Air signs alliance with VivaAerobus and will inject 50 million dollars

Viva Aerobus announced on Wednesday the start of a surprise commercial alliance with the US Allegiant Air (a subsidiary of Allegiant Travel Company that operates 130 domestic routes), which includes a capital injection of 50 million dollars for an undisclosed shareholding.

It is expected to enter into service in the first quarter of 2023, after receiving approvals in competition matters from Mexico and the United States, in addition to the Mexican aeronautical authority recovering category 1 by the Federal Aviation Administration (FAA). Both processes can advance in parallel.

For now, the United States Department of Transportation (DOT) has already been asked to approve an antitrust immunity agreement required for the alliance.

VivaAerobus and Allegiant operate the same ultra-low-cost business model and use Airbus aircraft. The Mexican has a fleet of 50 aircraft and Allegiant (an airline dedicated to leisure travel based in Las Vegas, Nevada, where the new Raiders football stadium is named after him) a fleet of 106.

The commercial alliance agreement, released yesterday, is fully integrated and designed to expand non-stop, low-cost flight alternatives between the two countries.

“The international market for air travel between the US and Mexico is currently the largest in the world and during the pandemic it has had a great performance thanks to a strong recovery in leisure travel and to visit family and friends, segments in which the Two companies have stood out ”, said the director of Viva Aerobus, Juan Carlos Zuazua.

From his perspective, the alliance with Allegiant will create a new connectivity with non-stop flights and greater competition, strengthening the immense Hispanic market focused on visiting family members, offering vacation opportunities for passengers from both nations.

Business integration, on the same page

According to information released this Wednesday, “the alliance will provide Allegiant with the opportunity to expand its travel offer to include world-class vacation destinations in Mexico such as Cancun, Los Cabos, Puerto Vallarta, among others. At the same time, Viva Aerobus will have access to the Allegiant sales and routes network, thus increasing its customer base in the US ”.

Additionally, the president and CEO of Allegiant Travel Company, Maurice J. Gallagher, Jr., is expected to join the Board of Directors of Viva Aerobus, currently chaired by the Mexican businessman Roberto Alcántara.

“The joint operation between the two airlines will be a great triumph for consumers seeking low-cost, non-stop travel between the US and Mexico, and will generate economic benefits for the hospitality sector of both nations. This innovative alliance will reduce fares, stimulate traffic and ultimately connect many cross-border cities with direct flights, ”said Gallagher, Jr.

The advisors to the airlines in the alliance process are: Barclays, Goldman Sachs and White & Case, in the case of Viva Aerobus, and WilmerHale and Garofalo Goerlich Hainbach, PC for Allegiant.

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