Argentina: Aerolíneas Argentinas signs agreement with Alitalia in search of revenues

Aerolineas Argentinas has struck a deal with Italian counterpart Alitalia, with which it will seek to generate higher revenues from the growth of its international flight offerings as the National carrier faces a complicated domestic market and various labor conflicts, as well as competition from low-cost airlines.

The agreement is not limited to sharing flights, but deepens the relationship to the point that AA may be considering a joint venture that will allow it to “boost” sales in the international commercial aviation market. The agreement also involves the creation of a “pool” or common fund, which would concentrate the revenues from ticket sales from both companies.

The joint venture already has the backing of Argentina’s National Civil Aviation Administration (ANAC) but the authorization from the National Commission for the Defense of Competition (CNDC) is required, as the deal could violate certain aspects of competition law.

In the case of Alitalia, the agreement will help the Italian carrier sell tickets from Rome to the entire interior of the country without the need for transferring to low-cost airlines. More generally, the joint venture will cover 75 destinations in Italy, Europe, the Middle East, Argentina and South America, which can be reached with flights from one of the two airlines. This is the first agreement of its kind to be signed by Alitalia in Argentina and that commits the two firms to coordinate commercial efforts to increase the connections between both countries.

Full Content: iProfesional