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Viva Aerobus, Allegiant Announce Low-Cost Alliance
Allegiant and Viva Aerobus announced on Wednesday their intention to set a fully integrated Trade Alliance Agreement designed to significantly expand the low-cost, nonstop flight alternatives between the U.S. and Mexico. This alliance is the first agreement of this nature in the aviation industry between two ultra-low-cost airlines.
Allegiant and Viva Aerobus have submitted a joint petition to the U.S. Department of Transportation (DOT) requesting antitrust approval and immunity for the alliance agreement. Allegiant will also make a $50 million equity investment in Viva Aerobus, and its President and CEO, Maurice J. Gallagher, Jr. is expected to join the Viva Aerobus Board of Directors.
These operations are also subject to prior authorization from the Federal Economic Competition Commission. According to a press release published by the Mexican ultra-low-cost carrier, the unique value proposition of its products, its extensive route network and the market experience of two of the world’s fastest-growing ultra-low-cost airlines, the alliance will achieve significant consumer benefits that would not be possible to achieve independently.
Allegiant, based in Las Vegas is an ultra-low-cost carrier focused exclusively on leisure travel, which currently offers nonstop flight service to more than 130 cities in this country, with no operations in Mexico.
For its part, Viva Aerobus, based in Monterrey, offers a wide service within Mexico, as well as non-stop flights to the main destinations in the U.S. and Latin America.
This agreement will provide Allegiant’s passengers 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 route network, increasing its customer base in the U.S.
The alliance will also allow Viva Aerobus to add routes in the U.S., particularly in underserved or untapped markets to Mexico where Allegiant has a significant presence such as Las Vegas and other cities in Florida, which are very popular destinations for Mexican tourists.
This fully integrated alliance will allow the coordination between Allegiant and Viva Aerobus in all areas of its operations, including codesharing, scheduling, marketing, information systems and loyalty programs, providing agile access and benefits for customers of both ultra-low-cost carriers. The alliance is expected to generate new cross-border, nonstop routes to destinations where only connecting flights are currently available. More than 250 potential routes have been identified as part of the DOT application, although specific routes will be announced later, following approval of the application.
As of today, Allegiant and Viva Aerobus expect to offer flights under this alliance beginning in the first quarter of 2023, pending government approval. In accordance with national requirements, Allegiant and Viva Aerobus will also be requesting approval of the alliance in parallel with the regulatory authorities in Mexico, including the Federal Economic Competition Commission.
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