All good things…

To quote Star Trek’s iconic character Q, “all good things must come to an end”… No, no, no. It’s nothing quite like that. Yes, it’s true, it’s been quite a while since I last updated my blog and I’m sure you guys noticed. This post serves one purpose alone: not to tell you that it’s over and that I’m shutting this place down but to guarantee you guys (and myself in a way) that this blog isn’t finished (before it really started…). No sir, I will continue to post here, but the frequency will certainly start to go down.

The reason for it is quite simple: in addition to my regular job, I recently took up the challenge to help out a couple of friends to run a very traditional Brazilian aviation portal. Since then I started to write for them, though only in Portuguese. I did however decide that whenever something really interesting comes up, I will try to publish it here as well, albeit in English :)

In addition to this blog I will also try to keep my website up and running. I hope this post finds you well and sincerely hope it won’t be too long before I come back here to write. I’m sure I’ll be writing something again before Christmas.

Cheers,

Marcelo

LATAM Part 3: What can customers (B2B & B2C) expect in terms of benefits from this proposed tie-up?

Now this is a really interesting and fun topic. There are so many benefits one could easily loose sight of them all. First and utmost, LATAM will be South America's only major player to be actively involved in passenger transport, logistics and MRO, all under one roof. This in itself will allow the new holding company to offer a wide range of services of unparalleled quality at competitive prices.

The sheer size of the passenger operation alone is remarkable (for the region): according to LATAM's investor presentation, LAN and TAM carried 45,8 million passengers in 2009. That's the equivalent to the sum of passengers Gol, Avianca-Taca and Copa combined carried in the same period.

Source: LAN-TAM Investor Presentation (August 13^th, 2010)

Another important figure is the number of served destinations. LAN and TAM serve almost twice as many destinations as the nearest contender (Brazil's Gol Linhas Aereas). More importantly, the number of destinations is bound to increase in 2011 with the establishment of "LAN Colombia". And let's not forget that with a total of 214 airplanes on order (121 for LAN and 93 for LAN), LATAM's fleet is going to grow considerably - right now the fleet count stands at 241; LAN has 98 planes while TAM has 143 - and through synergies and joint network planning, LATAM will be able to push itself into new, still unexplored markets. Also, let's not forget that LAN hasn't really ventured itself into the regional market and TAM has only recently began to do so and its presence in this market is 'shy' to say the least. A while ago I already covered this topic with Azul ("Azul goes regional - nation-wide!" published on July 23rd., 2010), consequently suffice it to say, there's plenty of potential in the South American regional market and LATAM will have an excellent starting base from which it will be able to reach into this still 'uncharted territory'.

LATAM is and will be even better positioned in South America with the most comprehensive network. This will certainly benefit local customers and will put LATAM in an excellent position, when the time comes, to negotiate a single global airline alliance as whoever 'wins' LATAM as their local partner will benefit from the best nit network in the continent to act as their feeder/defeeder. With the prospect of effectively 'running the show' in South America, virtually unmatched in terms of size and quality - number 2 in terms of passenger numbers is Brazilian low cost carrier Gol Linhas Aereas, the continent's premiere 'no frills' airline while numbers 3 & 4 (respectively Avianca-Taca and Copa Airlines) together have carried (only barely) a bit more passengers than Gol - , LATAM will be the region's ruling quality legacy carrier. This is a major plus to passengers, companies and travel agencies alike as they will suddenly be able to book the most complex itineraries on (what is practically bound to become) a single company.

That brings me to another interesting topic: loyalty-binding programs. I'm not just talking about the traditional frequent flyer program for passengers but rather corporate and agency agreements/contracts. With an extensive network, a world class product - both LAN and TAM are investing heavily in ground and in-flight product/service (on a side note: TAM is working towards becoming Latin America's first airline to offer in-flight connectivity) - LATAM will be well positioned to offer its customers (passengers, companies and travel agencies alike) the most complete, high quality travel package within South America. And since we're on the subject, a single frequent flyer program is probably going to become a priority for LATAM. Why? Quite simply because business passengers - admittedly the main focus for both LAN and TAM - still have something to say when it comes to choosing the airline for their travels and most usually end up choosing the airline where they can earn (and eventually redeem) their personal miles/points on.

With intra South American business booming, LATAM will be ideally placed to offer a complete regional agreement/contract to companies whereas the competition will only be able to offer local agreements/contracts. The same can be said about travel agencies, most notably the big corporate travel agency chains: instead of negotiating individual agreements/contracts on a local basis, they will be able to work out comprehensive 'continental' agreements/contracts, effectively simplifying processes. Additionally, both LAN and TAM are expanding their international/intercontinental operations at a very fast pace, meaning that in addition to the best South American coverage, LATAM will be in a prime position to offer passengers, companies and travel agencies excellent deals to a wide range of North American, Central American, European, South Pacific and eventually perhaps even African and Asian destinations.

Source: LAN-TAM Investor Presentation (August 13^th, 2010)

However, not only the passenger unit is bound to grow considerably from LAN and TAM’s union, but other spin off’s such as the Cargo units (LAN Cargo, ABSA Cargo, TAM Cargo, etc.) the MRO units or even TAM’s now independent loyalty binding company Multiplus Fidelidade have much to gain.

For instance: LATAM’s cargo operations will reign supreme in the continent leaving little space for smaller companies. Aside from having the best network in the region with all the belly capacity from the LAN Airlines units (Chile, Argentina, Peru, Ecuador and shortly alsoColombia) and TAM at its disposal, LATAM has a dedicated cargo fleet. This means quite simply that LATAM will be able to serve pretty much any market within South America at competitive prices – benefiting from economies of scale – and on a larger scale than anybody else. As a natural consequence, LATAM’s intercontinental cargo operations will also benefit from the new structure and be in a far better position to take on the competition.

Source: LAN-TAM Investor Presentation (August 13^th, 2010)

Multiplus Fidelidade, originally founded in 2009 as an incentive company for TAM’s frequent flyer program “Fidelidade” can also be counted as a major asset to LATAM. Since its foundation, Multiplus Fidelidade has evolved into an independent loyalty marketing company (much in the vein of Aeroplan) and even now is still (wrongfully) known by the general public as “TAM’s frequent flyer program”. While the company itself is trying to distance itself from this image, LATAM can reap benefits from its legacy (as “TAM’s frequent flyer program”) considering that the sheer size of the new airline will a) attract new customers b) strengthen ties to current and returning customers and c) attract new partners.

I could go on for quite a while here… The benefits are countless. However there are another two great beneficiaries that I need to mention. After all, Business School 101 teaches us that for any company to work (successfully) it must find the formula to balance three pillars: customers, investors and employees. First and utmost, employees are one of the elemental drivers in any company. And LATAM will boost morale as it becomes South America’s leading airline group. Employees would benefit from enhanced career opportunities and faster growth as a result of the combination of LAN and TAM. Furthermore, the scale and diversity of the new carrier would provide more stability and greater financial strength, benefiting all stakeholders. The combined airlines have more than 200 aircraft scheduled for future delivery, driving growth and increased employment across the region. This means that shareholders and the entire region itself (South America) will benefit from LAN and TAM’s proposed tie-up as the new combined airline will be a true powerhouse in the region and present new investment opportunities while at the same time creating new job opportunities. The LATAM group will effectively be among the leading airline groups in the world in terms of size, profitability and market reach.

LATAM Part 2: Star Alliance or Oneworld? Or both?

Next up is a topic of much debate: what of the alliances? LAN is a member of Oneworld since May 1999 and TAM just joined Star Alliance, earlier this year, in May.

Both TAM’s CEO Líbano Barroso and LAN’s CEO Enrique Cueto have said that they will not make a decision on alliances before the completion of LATAM, expected for mid-2011. For now TAM intends to stay in Star while LAN also has no plans of leaving Oneworld; so says Barroso: "First of all we have six to nine months on the integration period and during that we have to look for the external third-party authorization - meaning regulatory, stock exchange offer and so on. Beyond that as we integrate and decide on the comprehensive network for the joint combined companies will be time for us to discuss if we will maintain two independent alliances - meaning Star for TAM and Oneworld for LAN - or if we discuss in future a single alliance for LATAM" (via Flightglobal).

As both carriers stated, it is way too soon to be talking about alliances, but one can speculate. Right now, looking at the current status quo, Oneworld makes sense for LAN and Star makes sense for TAM.

Why does Oneworld make sense for LAN? There are a number of reasons. Let’s start with the historic background, shall we?

For starters, pretty much all independent countries in South America, with the exception of Brazil, are Spanish speaking countries and have historical ties to Spain. This ‘bond’ to Spain is still very strong and Madrid is nowadays ‘the gateway’ into Europe for South America – again, with the exception of Brazil. All local South American carriers of Spanish speaking countries flying to Europe, without exception, fly to Spain. More specifically, these airlines all serve Madrid. And Madrid just so happens to be Iberia’s stronghold. And guess what?! Iberia just so happens to be the second carrier to be recruited into the Oneworld alliance back in February 1999 and has just recently announced its strategic tie-up with Oneworld founding member British Airways. One could certainly argue that if LAN chose to reroute its Europe traffic via one of Star Alliance’s gateways, they could certainly make it work, to certain extend anyway, but they would not be able to fight off the historic/cultural ties that exist between the Spanish speaking South America and Spain. Furthermore, Iberia has built and is further expanding it intra-european network at its home base in Madrid-Barajas.

Another destination which is very popular within South America - including Brazil this time around – is Florida, in particular, Miami. Miami’s International Airport is considered to be the largest gateway between the United States and Latin America. This also in part due to its proximity to tourist attractions (including Orlando), the local economic growth and the large Latin American population which resides in Florida. The State’s geographic position and its proximity to Central America, the Caribbean and South America also contribute to further strengthening the region as popular destination and highly sought destination among Latin Americans. What’s more, bear in mind that up until recently, Miami was actually a hub for passengers travelling from Europe to Latin America and not too long ago – up until 2004 to be exact – Iberia actually had a hub operation established in Miami.

Miami also serves as one of American Airlines’ and American Eagle’s most important hubs: both carriers are Oneworld members. More importantly, American Airlines and its regional subsidiary American Eagle are the only two carriers to use Miami as a hub. If all the facts I listed in the previous paragraph aren’t strong enough an argument, this fact alone makes Miami the logical distribution hub to/from the United States for LAN.

These two destinations represent the core of the intercontinental traffic ex South America. Brazil is a bit different though, Miami is certainly a top destination, much in the same way it is for the rest of Latin America, but the intercontinental traffic to Europe ex Brazil is much more ‘evenly spread out’. With LAN covering most of the Spanish speaking countries in South America (Chile, Argentina, Peru, Ecuador and as of 2011 also Colombia), an association to the Oneworld alliance makes much more sense. Star Alliance, though much better represented from a global perspective, can’t match the tight network/product coverage to/from Latin American markets (save for TAM in Brazil).

Now, if we leave the Spanish speaking countries behind and turn our attention at Brazil and TAM, we quickly come to realize that Star Alliance is indeed the best alliance for TAM. Brazil’s international traffic is much more ‘diverse’ than that of other South American countries, meaning that an alliance with a much better global presence, which Star Alliance has, makes much more sense.

Let’s start by having a look at TAM’s current intercontinental network: their two North American destinations as well as most of their European destinations can hold their own as “stand-alone destinations”, meaning, there is enough local traffic at both ends to support the routes. Summing up, TAM wouldn’t really need a single alliance partner to continue selling these destinations. In fact, TAM’s former strategy to form local partnerships within North America and Europe made much more sense as without being part of an alliance the airline was able to really choose the best of both (or three in this case) worlds. However TAM’s grasp is reaching (well) beyond North America and Europe as the carrier now aims to increase its presence in Asian markets, most notably in China and Japan. And therein lies a huge challenge and through an alliance the chances of success are boosted significantly.

Looking at Star Alliance and Oneworld, both have strong partners (and for the sake of this argument, let’s assume that JAL’s recovery will be a successful one) in both China as well as Japan though Star Alliance does offer much better gateways to Asia. Be it from a geographical stand-point or from the airport infra-structure itself. Now, before we go any further though, we need to clarify an issue which is of the utmost when speaking about local passenger demand from Brazil to Asia: historically the vast majority of the local traffic to Asia was sent via North America, primarily through the United State’s west coast. However since the United States started demanding a (rather expensive) transit visa, the number of passengers travelling via North America has dropped considerably. In light of this travel restriction, local demand to Asia shifted to, primarily, European legacy carriers, particularly, Air France, Lufthansa and British Airways – and more recently also to Emirates and Qatar Airways –; depending on the final destination also South African Airways. In any event, the preferred gateway to Asia for Brazilian passengers has become Europe, that fact is undisputable. And that’s where Star Alliance leads Oneworld (and SkyTeam for that matter): Lufthansa, with its Frankfurt hub offers a much better product for connecting traffic than both, Oneworld’s British Airways and its London Heathrow hub, and Sky Team’s Air France and its Paris Charles de Gaulle hub.

Frankfurt airport has a much better image in the eye of the passenger: Skytrax rates the airport as a four-star airport. Meanwhile London Heathrow lags behind, being rated a three-star airport and it gets even worse when we look at Paris Charles de Gaulle: the airport isn’t even rated – though judging from the passenger reviews posted on Skytrax’s website, between the three hubs, CDG would most certainly be the worst-rated. As if that wasn’t enough, both London and Paris are destinations which fall under the passenger ‘final destination’ category, meaning, there is enough local demand at both ends to fill the flights.

Getting back to Frankfurt, aside from having a better image in the eye of the passenger, and the fact that geographically it is best located for flights between Brazil and Asia, Frankfurt is also home of Star Alliance founding member Lufthansa, the leading European carrier in terms of frequencies and destinations in Asia. Not to mention that, as already stated, Frankfurt’s geographical position, ‘right at the heart of Europe’, makes Lufthansa the ideal partner for TAM in terms of feeding/defeeding its long-haul service within Europe. As if that wasn’t enough, product-wise Lufthansa fits the description of what TAM looks for in a partner airline: a carrier fully committed to offering its customer the best in terms of premium products while at the same time striving for service excellence. Additionally, with Frankfurt being the home of one of the (if not ‘the’) leading Star Alliance members, TAM will automatically have access to a wide-range of other Star Alliance members, including its Asian affiliates – which rank among the best, two of which (Asiana Airlines and Singapore Airlines) are five-star rated airlines according to Skytrax. Naturally, Star Alliance becomes TAM’s alliance of choice, after all this is the alliance that is most likely to boost its chances of growing into the Asian market.

Now, does that mean that Oneworld wouldn’t complement TAM and increase its chances of succeeding in Asia? By all means, no. Obviously TAM would also be able to expand its services to Asia via its LHR service in cooperation with Oneworld partners British Airways, Japan Airlines, Cathay Pacific and future alliance member Kingfisher Airlines. However London Heathrow isn’t the best airport for connecting passengers and more importantly, British Airways and it’s Oneworld partners don’t cover the network quite in the same way as Lufthansa and it’s current and future Star Alliance partners do: Air China, ANA, Asiana Airlines, Singapore Airlines, Thai Airways and Air India.

Then there’s another very important point which speaks volumes in favor of Star: the Brazilian (and South American) market itself. Before TAM joined Star Alliance earlier this year in May, the only global alliance which had a local representative in South America was Oneworld in the form of LAN. The only other local carrier to have participated in any alliance was VARIG which ceased operations in July 2006. VARIG was one of Star Alliance earliest members having joined the alliance only a couple of months after it had been officially created in 1997. After the demise of VARIG in July 2006, Brazil, South America’s country with the highest growth rates in terms of passengers, was in effect left up for grabs and considered to be a big ‘blank spot’ on the map for global alliances. At that point Brazil had two alliance contenders (with three major alliances in play); meaning the one who had more to offer would also get the best benefits. The two contenders up for grabs were Gol and TAM. The first was basically your regular no frills carrier, while TAM, though in some areas similar to Gol in terms of its product, was attempting to ‘fill the shoes of VARIG’ as the country’s ‘legacy flag carrier’.

TAM had a good head start: unlike Gol, the ‘magic red carpet airline’ was already a member of IATA (Gol only joined in June of this year) and had several code-share and interline agreements in place with both North American as well as European carriers. What’s more, TAM had successfully ‘absorbed’ VARIG’s international expertise by hiring several key staff members - even before VARIG was grounded – which would eventually play a pivotal role in the upcoming negotiations to join a global alliance.

More importantly, Star Alliance was (and still) is the best known global airline alliance among local passengers and companies, mostly due to the groundwork laid down by VARIG. Historically VARIG has, despite all its financial and product difficulties faced in the last decade, been a reference in terms of flight safety and technical reliability in Brazil. TAM on the other hand has been plagued by an image of faulty maintenance and generally as an ‘unsafe airline’. This meant quite simply that to this day TAM still was (and to some extent, still is) avoided by some passengers. The announcement that TAM had been ‘chosen’ to ‘fill VARIG’s shoes’ at Star Alliance helped the airline to shrug off part of the image and finally gain the trust of a very large portion of passengers – some have kept their belief and still avoid, when possible, flying TAM. Still, the final verdict clear: Star Alliance helped TAM to disassociate itself from a troubled reputation. This alone was a huge gain, and something that an alignment to neither Oneworld nor Sky Team would have brought with it.

Nevertheless, in the end it comes down to the numbers: both alliances would have brought an added value to TAM while at the same increasing the revenue inflow but Star Alliance was the better option for a single reason: TAM would have access to all corners of the globe with a much more tightly nit network than Oneworld and the potential revenue gains were higher, both abroad and at home.

But that still leaves us with the big question: will LAN switch to Star or will TAM switch to Oneworld? Or could perhaps LAN stay with Oneworld and TAM with Star? From what we just saw, LAN has much more to loose by leaving Oneworld than TAM does by leaving Star and teaming up with Oneworld – LAN’s loss couldn’t possibly be entirely made-up by the tie-up with TAM and subsequently Star Alliance. This means that unless LATAM somehow manages to have two airlines of a single group aligned to different global alliances, TAM will have to let Star go. Looking into this scenario, if TAM was indeed to join Oneworld it would undoubtedly loose some of the revenue gains and the added value it had earned by joining Star, however if you weigh the benefits of a tie-up with LAN and a subsequent move in the direction of Oneworld, those losses become rather insignificant – bare in mind that TAM would also have benefited from a tie-up with Oneworld; the only difference to Star is that the gains with the latter were/are higher. Furthermore, lets not forget, though Oneworld is still the ‘shyest’ of the three global airline alliances, it is making efforts on expanding its global presence, having already announced the addition of new full-time members such as Russia’s S7, India’s five-star airline, Kingfisher Airlines and Germany’s Lufthansa arch-rival, Air Berlin. To sum up, though officially we will only see something regarding this subject after LATAM is up and running (circa one year from now) and anything we say right now is but a hunch, my gut tells me TAM will leave Star and joint LAN at Oneworld. It just makes much more sense.

Finally, to speculate a little bit more, I've prepared a couple of graphs which show the current Alliance market share distribution and two possible scenarios which might result from LAN and TAM's merger: a) TAM joining Oneworld and b) LAN joining Star Alliance.

Graph 1: Status Quo

Graph 2: TAM joins Oneworld

Graph 3: LAN joins Star Alliance

As always, comments, suggestions and critics are very welcome. Be sure to check back next week when I upload part 3 of the LATAM Analysis/Comment.

LATAM Part 1: Merger or Acquisition?

The first big question which is being endlessly debated (at least here in Brazil) is if it is really a merger or did LAN actually buy TAM?

That's a rather touchy subject. Upon first impression it might seem a lot like a 'true merger' rather than an acquisition when it's actually both. To fully understand why that is, we need to go back a few years.

LAN has been trying to get into the Brazilian market for quite a while now. Brazil's domestic air traffic boom has caught the Chilean carrier's attention but it was never able to setup its own passenger airline because of Brazil's 20% foreign ownership restriction. Nevertheless, LAN still sought a way to establish itself in Brazil. Consequently, as a 'first step' to make its way into the Brazilian market LAN, along with local investors, launched ABSA Cargo. ABSA has remained stable throughout the changing economic scenarios while other local cargo operators have 'come and gone'.

The opportunity to finally enter the market arose back in 2006 with the demise of VARIG and the subsequent separation its 'operational arm', which finally resulted in the creation of VRG Linhas Aereas or the 'New Varig' as it was nicknamed. In September of the that same year LAN opened official negotiations and intended to participate in the restructuring process of the 'New Varig' . Later, in January 2007, LAN invested some 17,1 million USD in the 'New Varig', eyeing a minority stake in the new carrier. Eventually LAN's attempt failed as, in a surprise move (most probably achieved through political lobbying), Gol bought the 'New Varig' thus ending LAN's plan to establish a local passenger airline in Brazil.

In the years to come LAN publicly stated its interest in entering the Brazilian market with its own brand. Still it was unclear how they could proceed, after all Brazil's 20% foreign ownership restriction was clearly an obstacle. The provisional solution was the negotiation of a commercial partnership with TAM - at that time and even now, the only major Brazilian carrier with product similar to LAN's - which included the implementation code-share flights and the alignment of the Frequent Flyer Programs.

But that wasn't enough. Even after the implementation of the LAN/TAM code-share agreement (and the subsequent FFP alignment), LAN's CEO Cueto still openly admitted the Chilean carrier continued to seek a way of establishing its very own operation in Brazil.

The solution was finally found in LATAM; through the creation of a holding company which would serve as an umbrella for both LAN and TAM. This would respect Brazil's 20% foreign ownership restriction while at the same time allowing LAN to effectively 'run the show'. Mind you that from an ownership standpoint the Amaro family (TAM) is expected to hold a 13,5% stake of LATAM while the Cueto family (LAN) will have a 24,1% stake. The remainder includes a 15,8% free float from TAM and 46,6% from LAN.

If you weigh everything I just listed above, the combination of LAN and TAM is a merger. And in a way, yes, it's also the way LAN figured out to 'buy itself' into the Brazilian market. Regardless of how you look at it (merger or acquisition), it's a win-win situation for both. LAN and TAM expect that the creation of LATAM will generate roughly 400 million USD in annual synergies - of which 170 million USD will be in new passenger revenue.

NOTE: if you haven't seen it yet, the LAN-TAM Investor Presentation available on LATAM's website shed's some light into the true scale of the proposed tie-up. Just access www.latamairlines.com and see for yourself.

>> Proceed to Part 2 - LATAM: Star Alliance or Oneworld? Or both? >>

LATAM: My take on LAN & TAM’s proposed tie-up

At this point pretty much everyone already had something to say about LATAM, the new proposed holding which is to combine LAN and TAM, in effect creating one of the world's leading airline groups (in both, number of passengers and revenue). I guess it's time I had something to say too, after all this 'merger' is set to shake the civil aviation industry in South America in quite a spectacular way.

But first of all, let's get some things straight: there seems to be lot of discussion on quite a number of points and as LATAM's own site site states (www.latamairlines.com), right now anything we say or discuss is nothing but a hunch as the proposed combination still is a 'plan' (as per LATAM's own words) - one we can all agree on, will most certainly go ahead.

Now, given that this subject is rather long, I've decided to divide my posts according to topics - to be released one at a time. Here are the points I will cover:

1. Merger or acquisition?
2. LATAM: Star Alliance or Oneworld? Or both?
3. What can customers (B2B & B2C) expect in terms of benefits from this proposed tie-up?
4. New market niches opening up for LATAM?
5. The competition and LATAM: threats & opportunities
6. Timing: was this really the right time for LAN and TAM to join forces?
7. Final considerations

Last but not least, I would like to know if there's anything in particular which you dear reader might want to know about LATAM. There's always something that hasn't been discussed and I would be happy to put these issues under a magnifying glass here. If there's anything you might want to see discussed here, please feel free to contact me either via email at marcelo.debiasi@saospotting.com or via Twitter @MarceloDeBiasi.

The first topic is finally up. Check it out HERE. I sincerely hope you enjoy reading my comments as much as I did putting them down on paper! As always, comments, suggestion and critics are most welcome.

Singapore Airlines to start flying to Brazil

It has been rumored for over a year now, but the implementation of Singapore Airline's flight to Brazil really seems to be taking shape.

According to a report published by the Spanish News Agency "ABC", the Spanish Civil Aviation Authority (Direccion General de Aviacion Civil) has authorized Spanair and Singapore Airlines to code-share on the route SIN-BCN-GRU vv. thrice weekly. While this is not an official announcement per say, it's a clear message that the flight will indeed exist.

The routing has been a subject of debate however there are a couple of reasons why Singapore Airlines, who has been trying to launch a flight to Brazil for a while now (initially via Frankfurt and Milan), chose to fly via Barcelona:

1. Singapore Airlines has been granted 5th. freedom rights and will thereby be able to sell the tag BCN-GRU vv. in addition to SIN-GRU vv.;
2. Catalonia itself offers a nice mix of (increasing) Business and Leisure traffic which Singapore Airlines can build on to push local traffic to and from Brazil - with the advantage that they will be the sole player offering non-stop services between Barcelona (and the Catalonia catchment area) and Brazil;
3. Singapore Airlines will be the only "5 Star Airline" (according to Skytrax) to offer direct services between Brazil and Europe which means it will be in an excellent position to capture some existing premium traffic from the competition;
4. Through its Star Alliance partnership with Spanair, Singapore Airlines will have a European hub at its disposal.

There is no specific date given when the flight is supposed to be launched but it is widely accepted that it should happen within a six month timeframe (please correct me if you hear otherwise - right now there are only rumors here and there), which would put the start of the flight somewhere around the start of the 2011 IATA Summer Timetable (April 2011).

On a personal note: I'd love to see Singapore Airlines around here! And I'm sure they would give the competition a good run for their money :)

Gol’s “mad dog August” – round two!

And here we go again… Almost two weeks after the ‘problem’ initially arose; the LCC is faced with it again. This time however, the general public is fully aware that it’s not simply a ‘software glitch combined with the season’s high demand’, but a full-scale, previously announced strike – and one which can be avoided.

The strike will be held by both, cockpit and cabin crew members. According to the “Sindicato dos Aeronautas” (SNA), the pilots and flight attendants local union, Gol crew members are demanding:

a) A full health insurance program;
b) A pension plan;
c) Gol is to fully comply with the professional regulatory act established in Brazil (meaning, pilots and flight attendants shouldn’t exceed the permitted flying hours per month);
d) A just and humane duty roster;
e) Pay increase by roughly 27%.

The airline is expected to make a decision, whether or not to accept the demands by Friday August 20th.

It is important to point out that right now a state of strike already exists and should demands not be accepted – or at least a counter-proposal be made – by next Friday, pilots and flight attendants will call for a strike some 72hs later. This strike is expected to affect 30% of the carrier’s flights, as stipulated by law.

On a side note, the timing for these strikes couldn’t be worse for Gol (or better for their crew members if you will): the airline has just announced a second-quarter loss of USD 29,7 million; the first ‘stealth strike’ scathed the airlines image and cost them dearly (public image, revenue loss, compensation costs, a hefty fine, the loss of corporate contracts, etc.); its fierce competitor, TAM, announced the intention to join forces with LAN and merge thereby creating on the world’s largest airline groups… In light of what we just outlined here, it is imperative that Gol makes the threat of a public strike – which, undoubtedly, could cripple them much worse than they could possibly imagine – ‘go away’. And they need to do it quickly and quietly.