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Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

Colombia Blocks Avianca and Viva Air Merger

2 years ago

The Avianca and Viva Air merger has hit a major roadblock with Colombian authorities objecting to the proposed combination. The move could be a blow to Avianca’s plan to create a pan-South American airline group with Brazil’s Gol.

Colombia’s Civil Aeronautics Authority, or Aerocivil, said Tuesday that the merger of the country’s first and third largest airlines could reduce competition and hurt consumers. It could also increase the barriers faced by competitors in the market. In addition, Aerocivil said the financial situation at Viva Air, which the airline’s claimed required expedited approval of the merger, was not so bad as to “affect its viability in the market.”

An Avianca aircraft in Miami. (ERIC SALARD/Flickr)

“We are concerned about the direction of the decision, as it … ignores the potential effect that the disappearance of Viva would have on users and the market,” Avianca CEO Adrian Neuhauser said in a statement on the decision. “At Avianca, we reiterate our willingness to actively participate in rescuing Viva.”

Avianca first announced plans to acquire Viva Air, but not merge with it, in April. However, in August the airlines requested expedited antitrust approval from Aerocivil for a merger that was “vital for the sustainability and development” of Viva Air. In an October interview, Viva Air CEO Felix Antelo said the airlines planned to continue operate as separate brands but would coordinate schedules and fares in order to offer travelers better flight options.

“It will provide for us a financial muscle way stronger and better than what we had before,” he said. “We are going to keep the [low-cost] model around, we’re going to keep the brand around, [and] we’re going to keep the low fares around.”

Antelo also said that “staying independent in aviation in the 2020s is not an option.”

The Avianca-Viva Air merger is the first step in the creation of Abra, a new South American airline holding company created by the merger of Avianca and Gol. The group also has the option to take at least a 42 percent stake in Chile’s Sky Airline.

Aerocivil said it would reconsider the deal if Avianca and Viva resubmit their merger application and offer “remedies” to boost competition.

Updated with comment from Avianca CEO Adrian Neuhauser

Airlines

AirAsia India-Air India Merger by 2023 as AirAsia Sells Off India Stake to Tatas

2 years ago

Budget carrier AirAsia India is likely to be merged with Air India Express by the end of 2023. An operational review process is underway to integrate the two carriers, Air India said in a statement this week.

The merger news follows Malaysia-based AirAsia Aviation Group’s announcement on Wednesday that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

The agreement that will fetch AirAsia $18.83 million, also states that AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.

Aimed at having a single low-cost carrier for the Air India group, following the merger the entity will be branded as Air India Express, a statement read.

In June, Indian watchdog Competition Commission of India had approved the proposed acquisition of the entire shareholding of AirAsia India by Air India.

Following the acquisition of Air India and Air India Express in January, the Tata Group now owns four airlines — Air India, Air India Express, AirAsia India and Vistara. Vistara is a joint venture with Singapore Airlines.

In a recent interview with Skift the Vistara CEO when asked about a possible merger between the airlines under the Tata fold had said that there are certain discussions that have been happening which he is not privy to.

Commenting further on AirAsia selling off its remaining stake to Air India, Group CEO of AirAsia Aviation Group, Bo Lingam, said Covid has allowed them to re-examine priorities, and the group feels it is best suited for AirAsia to develop an Asean-only business with airlines in Malaysia, Thailand, Indonesia and the Philippines.

“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent,” Lingam added.

Launched in 2014, AirAsia India currently flies to 18 destinations with a market share of 5.9 percent.

Airlines

WestJet’s Proposed Sunwing Deal Raises Competitive Concerns

2 years ago

Canada’s Competition Bureau has potentially thrown cold water on WestJet’s proposed purchase of leisure and tour competitor Sunwing Airlines.

In its report Wednesday, the regulator said the deal “would likely result in increased prices, less choice and decreases in service for Canadians.” It identified 31 routes between Canada and the Caribbean and Mexico where competition would likely decrease as a result of the merger.

WestJet responded Wednesday by thanking the Competition Bureau for the report, and emphasizing the fact that it is only “advisory and non-binding.”

“We look forward to bringing this transaction to life for the benefit of Canadian travelers, communities and employees,” the Calgary-based airline said.

Canada’s Minister of Transport, Omar Alghabra, will issue a final decision on the deal.

Two Sunwing aircraft at the Guatemala City airport
(Roberto Zuñiga/Flickr)

WestJet has said that, if the deal is approved, it would keep the Sunwing brand while merging Sunwing Vacations and WestJet Vacations into a new vacation division. And since announcing the transaction in March, WestJet has unveiled plans to shrink in eastern Canada — where Sunwing is strongest — and focus its own operations in western Canada.

WestJet hopes to close the purchase of Sunwing by next spring.

Read the Competition Bureau Report

Hotels

Marriott to Buy Mexico’s City Express Hotels for $100 Million

2 years ago

Marriott International said on Wednesday it would buy the City Express hotel portfolio from Mexico-based Hoteles City Express for $100 million, as the hotel giant sought to push further into Latin America.

The deal includes 152 hotels across five brands, most prominently City Express, and will boost Marriott’s footprint in the Caribbean and Latin America by 45 percent — to 486 properties across brands. 

“We’re excited to enter a new lodging category — the popular affordable midscale segment where we see significant potential,” said Anthony Capuano, CEO of Marriott International.

The deal could close between the end of 2022 and the first half of 2023.

All owned and leased hotels will sign long-term franchise agreements with Marriott, while franchise agreements for co-invested, franchised and operated properties will be assigned to Marriott, with the option to sign a new contract. Marriott estimated franchise fees at about $10 million.

Most of the portfolio is in Mexico, but some hotels are in Costa Rica, Colombia, and Chile.

“At around $6,000 per room, this is a decent price,” said analysts at Bernstein in a report. “This makes Marriott the clear number one in Latin America (overtaking Accor).”

The lodging giant said it saw an opportunity to expand the brand, first in Central America and then in Latin America and possibly worldwide. It plans to add the “by Marriott” tag to the City Express brand as an endorsement.

“However, Hilton and IHG created their Americas focussed mid scale brands (Tru and Avid) organically and were able to grow them rapidly with entirely 3rd party capital and entirely new builds (no conversions),” Bernstein said. “Some of Marriott’s acquired hotels will be 20 years old. The [City Express] pipeline is just 5% of current supply.”

It was a day of validation for Luis Barrios, who founded Hoteles City Express in 2002.

Airlines

Spirit Airlines Shareholders Approve JetBlue Merger

2 years ago

The JetBlue Airways and Spirit Airlines merger is a step closer to reality with the approval of the latter’s shareholders Wednesday.

Investors in Miramar, Florida-based Spirit approved the $3.8 billion deal with more than 50 percent voting in favor. Shareholder approval was a key, though not final, step in merging the U.S.’ sixth and seventh largest airlines.

“Today’s vote is a major milestone in our plan to join with Spirit to create a high-quality, low-fare national challenger,” a JetBlue spokesperson said.

JetBlue and Spirit still must secure regulatory approval from the U.S. Justice Department before the merger can close. That is far from a guarantee with the Biden administration taking a firm stance against consolidation in major industries, and for additional competition.

Both JetBlue and Spirit argue that by merging they will be a more formidible competitor to the largest U.S. carriers — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. But the combination would also remove the country’s largest budget airlines, Spirit, leaving the market entirely to smaller Frontier Airlines.

In July, Frontier lost a bidding war with JetBlue for Spirit.

JetBlue and Spirit hope to secure regulatory approval and close their merger by the first half of 2024.

Airlines

Singapore Airlines and Tata Talk Potential Air India Stake

2 years ago

With a former Singapore Airlines executive at the helm of Air India, it comes with little surprise that the Singaporean airline could take a stake in the Tata Group-owned Indian flag carrier.

Singapore Airlines disclosed Thursday that it was in “confidential discussions” with Tata to “deepen” the companies’ existing partnership, and a potential merger of Air India and Vistara. Indian carrier Vistara is jointly owned by Tata (51 percent) and Singapore Airlines (49 percent).

Singapore Airlines did not say what that deeper partnership could be, but Reuters reported that it could include a minority stake in Air India.

singapore airlines Boeing 777-200 in Singapore Airlines livery source singapore airlines
(Singapore Airlines)

India, with nearly 1.4 billion people, is widely viewed as one of largest growth markets for aviation around the world. However, airlines have long struggled to penetrate the market that suffers from infrastructure and other constraints. Numerous carriers have tried — and failed — including Jet Airways (the first incarnation) and Kingfisher.

Singapore Airlines described India, and its Vistara investment, as an “integral part” of its multi-hub growth strategy. A stake in Air India would give the Singaporean airline even deeper penetration in the market.

Short-Term Rentals

Guesty Buys Two Hospitality Software Companies as Acquisition Spree Continues

2 years ago

Guesty, a startup that simplifies the operation and marketing of short-term rental and vacation rentals, said on Wednesday it had acquired two companiesKigo and HiRUM — to expand the brand’s position in Southern Europe and Australia.

Guesty, based in the U.S. and Israel, didn’t disclose the transaction details.

Kigo and HiRUM have “thousands of customers” using their tools for property management and operations. For example, HiRUM’s customers include Palazzo Versace Gold Coast, Wyndham Hotels & Resorts, Ramada by Wyndham, and Grand Mercure Hotels & Resorts.

The deal extends Guesty’s “capabilities for flexible inventory management, allowing operators to handle traditional hotel listings, serviced apartments, holiday homes, and short-term rentals from one dashboard,” the company said.

Guesty has been on a shopping spree since August, when it revealed a $170 million Series E funding round. Earlier this month, Guesty bought Yield Planet, a hotel-focused revenue and distribution management platform.

Travel Technology

Flyr Labs Buys Pribas to Enhance Airline Retailing and Fare-Selling

2 years ago

Flyr Labs, an LA-based company that sells software to airlines to help them with setting fares and related services, has bought Pribas, a German company that helps airlines with related functionality.

The companies didn’t disclose the deal terms.

Airlines such as Condor and SunExpress use Pribas’ retailing and integration platform to “create new fare choices at will and dynamically price and bundle offers to sell at revenue-optimal prices regardless of channel.”
 
“For over a decade, airlines have aspired to become travel retailers,” said Arnulf Pribas, founder and CEO at Pribas. “This transformation requires new operating models and the ability to navigate and harness a torrent of real-time data.”

Flyr and Pribas said their offerings help airlines vault into pricing and retailing practices more common in other industries.

Flyr also recently acquired another company, Newshore, a Barcelona-based software business that helps airlines with selling.

Flyr is a San Francisco-based startup backed by JetBlue Airways’ corporate venture arm JetBlue Technology Ventures. It has disclosed raising more than $150 million in funding from multiple investors to date.

Airlines

JetBlue and Spirit Airlines Set October Date for Merger Vote

2 years ago

JetBlue Airways may have won over the board and management of Spirit Airlines in its bidding war with competitor Frontier Airlines for the discounter. But JetBlue still needs to sway shareholders before the deal can move forward.

Spirit has scheduled an October 19 shareholder meeting for a vote on JetBlue’s $3.8 billion takeover offer. Investors in the airline have been down this road before with Spirit scheduling and either postponing or suspending four previous meetings on Frontier’s failed offer.

But even if Spirit shareholders approve the JetBlue offer as is expected, the merger still has a steep hill to climb with the Department of Justice. The regulator, whose approval is key to the combination, has yet to weigh in on the merger that would remove a budget competitor from the U.S. market, and make JetBlue the fifth largest domestic player.

(vic_206/Flickr)

Startups

Kenya’s HotelOnline, Backed by Yanolja, Buys Hotel Software Brand HotelPlus

2 years ago

HotelOnline, which is based in Kenya and has more than 6,000 hotel clients for its software, has acquired HotelPlus, a provider of hotel software to 2,200 clients in East Africa, the companies said on Monday.

The companies didn’t disclose the terms of the deal, other than to say that the transaction was mainly done in HotelOnline shares in a transaction that placed a $24 million valuation on HotelOnline.

HotelOnline is backed by Yanolja, the South Korea-based travel startup valued recently at more than $1 billion. HotelPlus was a fully bootstrapped company, meaning that it never took outside venture capital. Its co-founder and CEO Eric Muliro has become HotelOnline’s chief technology officer.

“Through this merger, we are significantly increasing our client base, while capitalizing on the combined strengths of both companies, creating a force to reckon with in the hospitality industry in the East Africa region,” said Håvar Bauck, one of the Norwegian co-founders of HotelOnline.

HotelPlus offers on-premise software, which will be brought into the cloud. The digital services of the combined companies help hotels with a broad range of back-office tasks, such as accepting a wide variety of online payments and setting room rates in reaction to changes in supply and demand.

HotelPlus has clients in more than a dozen countries across the continent, which will help speed the growth of HotelOnline, which Bauck co-founded with Endre Opdal in 2014.