Cofece endorses Allegiant’s investment in VivaAerobus

VivaAerobus reported this Monday that the Federal Economic Competition Commission (Cofece) “unconditionally authorized” the commercial alliance agreement that it intends to conclude with the US firm Allegiant Air, announced in December 2021.

The alliance also contemplates a $50 million investment by Allegiant in the Mexican airline. As part of the process, the United States Department of Transportation (DOT) has yet to approve its antitrust immunity request in a timely manner, which was expected to take place last July with the intention that in the first quarter of 2023 they would begin operating as an alliance. .

The plans have been shelved because DOT has requested additional information from the parties, including more details on why they want 15-year antitrust immunity (which would allow them to share information on fares, routes, schedules, among other things), whether Allegiant Air does not have operations in Mexico, so it is not a close competitor of VivaAerobus.

“Cofece’s authorization is one more step we are taking to forge an alliance that will strengthen a competitive environment with a much broader offer between Mexico and the United States. Working as a team, we will promote air traffic and tourism, at the same time that we contribute to generating all those economic benefits associated with the travel industry”, explained the general director of VivaAerobus, Juan Carlos Zuazua.

In Mexico, the application process before the commission began on January 14 of this year and involves: Aeroenlaces Nacionales, Allegiant Air, Allegiant Travel Company, Grupo VivaAerobus and PLV Fans Rewards.

According to the interested firms, the agreement they are seeking is the first of its kind in the airline industry as it is signed by two ultra-low-cost airlines and will seek to expand flight options between Mexico and the United States at low prices. Consequently, this alliance will allow more people to have access to safe and reliable air transport between the two countries, mainly by serving destinations that currently do not have direct flights, that is, non-stop.

Another concern of the DOT is to know how the business models would be integrated.

alejandro.delarosa@eleconomista.mx