By Carole Shifrin, Contributing Editor
Already the world’s largest airline grouping, Star Alliance continues to add members – Greek carrier Aegean Airlines was the latest, in June – but the induction of Brazil’s TAM Airlines in May is the plum, giving the alliance access to a fast-growing continent on which it has been poorly represented in recent years.
“We are proud to call Brazil … our home market again,” Star Alliance CEO Jaan Albrecht said in São Paulo as TAM was officially inducted into the club, “and we are excited about the opportunities … for all of us in South America.”
One of Star’s earliest members, in 1997, was Brazil’s once-elegant flag carrier Varig, but the airline’s slow and painful decline, then bankruptcy, left Star without a Latin American partner – officially since the beginning of 2007, but in truth long before that.
“Our joining member opens up a whole continent to our alliance,” Albrecht notes, bringing 36 additional South American destinations immediately to Star’s global route network, with more destinations expected as TAM continues to grow its domestic and international footprint.
Additionally, Albrecht and key Star Alliance carrier executives expect São Paulo to become a leading hub for the alliance’s network in the future, its first in Latin America – possibly in time for Brazil hosting the 2014 World Cup and 2016 Olympic Games.
Albrecht says Star officials will be working with key Brazilian, state and local government officials and Brazil’s aviation authorities – including Infraero Aeroportos, the country’s airports authority – to help put in place the necessary modern and cost-effective infrastructure to satisfy burgeoning air travel demand.
Brazilian officials already have been exploring possible expansion of São Paulo’s Guarulhos International Airport, including construction of a new, third passenger terminal and a third runway. The airport has the appropriate space to build a third terminal, officials say, which would relieve pressure on its already capacity-restricted terminals. A third terminal also could further Star’s “move under one roof” game plan, where all Star carriers seek to operate together from one terminal.
What TAM brings Star
TAM’s accession to Star is a significant addition to the alliance, filling in a good deal of what Albrecht has referred to as “white spots” on Star’s route map. As United Airlines’ Mark Schwab, senior vice president for alliances, international and regulatory affairs, explains, the “white spots” strategy involves superimposing the network systems of all Star carriers on a world map. “There is a lot of color” on the world map, he notes, but there also are white spots.
“So we focus on areas where the network could be stronger,” says Schwab – i.e., the white spaces. Africa continues to be the main focus for Star’s future expansion, with South America and the Caribbean also in its sights.
TAM’s inclusion in the Star Alliance comes at an auspicious time, with Latin American economies expected to grow at a faster pace than many others around the world, leading to continuing strong demand for air travel.
The latest Boeing market outlook predicts total air travel for Latin America will grow faster than the world average over the next 20 years, with travel within Latin America leading the region’s growth at a 7.1 per cent annual clip. Travel between Latin America and North America is forecast to rise an average 5.3 per cent a year, with travel between Latin America and Europe expected to grow 4.6 per cent annually.
This reflects the continent’s strong economic growth, continued investment in aviation infrastructure, and liberalization of airline ownership and traffic rights, Boeing says. Air-travel growth rates forecast for Latin America are well above those expected in the more mature internal North American and European markets.
Brazil, the largest country in Latin America with a population of 190 million, is considered a particularly bright star, with its economy expected to grow by as much as 7 per cent this year, leading to air traffic growth estimated at more than twice that.