Embattled Avianca Brasil to Exit Star Alliance

The Star Alliance is losing an airline partner in South America. Following years of tepid profits and an eventual bankruptcy, Avianca Brasil, also known as OceanAir Linhas Aéreas, is officially leaving the Star Alliance on September 1. Following its departure, Star will have one less carrier operating service within South America and a total of 27 carriers across the entire worldwide partnership.

Avianca Brasil followed a long and difficult path to eventually joining the Star Alliance. Founded as OceanAir, the company struggled to grow out of its Brazillian roots. It only came into consideration for Star membership when Avianca Colombia, its larger and better-known cousin that’s owned by the same holding company, was accepted into the group in 2010. Eventually, as Avianca Brasil modernized its tech systems and route network, the airline was officially accepted into the Star network in 2015.

Despite a strong partner carrier in Avianca Colombia and a wide network across the Star Alliance, however, Avianca Brasil never reached escape velocity. The troubled airline officially filed for bankruptcy late in 2018, and in May 2019 United took legal action following a defaulted $456 million loan to Avianca Chairman German Efromovich as part of a proposed partnership. This June the carrier formally ceased operations. As an extension of that collapse, Avianca Brasil’s membership in the Star Alliance is now formally wrapping up.

a Blow to Brazilian Domestic Travel

Avianca Brasil’s exit from Star will leave a gap in the alliance’s reach throughout South America, but the impact won’t be calamitous. Already, Avianca Colombia canvasses much of South America on short-haul routes while Copa Airlines, Panama’s flag carrier, fills in a few other route gaps. Numerous international Star carriers operate service into South America, and the alliance is quick to point out that multiple carriers fly directly into Brazil.

Still, for alliance members looking for partner flights throughout domestic Brazil, Avianca Brasil’s exit will be a blow to connectivity. Right now, Star’s international heavyweights like United and Lufthansa fly internationally into the country, but what they lack is codeshare connections throughout a wide range of domestic Brazillian destinations. With Avianca Brasil’s exit, passengers may be forced to fly a non-alliance carrier to reach deeper into the country.

Star’s loss is also good news for Santiago, Chile-based LATAM, its largest rival on the continent and a member of the Oneworld Alliance. With hubs in São Paulo, Rio de Janeiro, and Brasília, LATAM now provides major connection points for international carriers such as American and British Airways as well as multiple regional flights throughout most of South America. And without Avianca Brasil in the way, LATAM can scoop up more of the market.

Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. He is also a director of product marketing at TripActions. Skift emails the newsletter every Monday.