United seeks partner in Brazil with TAM's exit from Star

Washington DC
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United Airlines is seeking partnerships in the Brazil market, now that Brazil's TAM will depart the Star Alliance in March 2014.

"We are looking for opportunities, may it be a close airline relationship... There are other ways to approach it, to make sure we have the right capacity match," says Jim Compton, United's chief revenue officer, at the Boyd Group International Aviation Forecast Summit at Baltimore.

Compton notes that economic growth in Brazil has been softer of late, and infrastructure challenges such as congested airports still remain. "We are keeping an eye on the market and looking for opportunities to partner on traffic beyond Sao Paulo," he says.

TAM will operate its last flights as a Star carrier on 30 March 2014, and will become a Oneworld member on 31 March. TAM is leaving Star to join Chile's LAN in Oneworld, after the two Latin American airlines merged.

TAM's departure will leave a void in Star's network in Brazil, which has the world's third largest domestic air passenger market.

"Latin America is obviously a very important part of our business," says Compton. "Connecting traffic in Brazil is important."

Asked during the summit if Brazilian low-cost carrier Azul will be a good fit, Compton does not directly address the question, but says that Star Alliance carriers Copa Airlines and Avianca are steadily developing their presence in Brazil.

Sao Paulo-based Avianca Brazil, which operates separately from Avianca despite having a similar brand and owners, could be a potential candidate for Star Alliance membership. But its owners, the Synergy Group, have said various technological challenges will make it difficult to integrate Avianca Brazil into a global alliance.

Even if Avianca Brazil were to become a Star member, the alliance would need more than the airline to make an impact in the Brazilian domestic market. Flightglobal data shows that the carrier was the fourth largest domestic airline in Brazil in 2012, but its number of departures still trailed behind TAM, Gol and Azul.