Transbrasil, which has been shrinking in recent years, and TAM, which has been steadily expanding, have ended a six-month old codesharing agreement and with it thoughts of a possible merger between the two Brazilian carriers.
Both airlines are keeping quiet about the reasons for their break-up. Analysts speculate that a merger had been in the offing but failed to come about because Transbrasil did not think TAM were offering enough cash.
Transbrasil, which has had other codeshare agreements in the past, including one with TAP, says it will look for new partners.
In the meantime, the airline says the agreement allows it to cut costs and reduce its fleet of Boeing 737s and 767s from 22 to 16 aircraft. Transbrasil reported a first half loss of Real 74.3 million ($35 million) for this year, but this was still a 43% improvement on the loss for the same period last year.
Following the end of the agreement, Transbrasil announced that it would be leasing four Boeing 737-300s for the Brazilian summer. The new aircraft would also enable it to restart operations on the lucrative Rio de Janeiro-Sïo Paulo shuttle where, under the codeshare agreement, Transbrasil had been allowed to sell 30 seats on each flight.
The agreement was launched in April amid comments that the Brazilian market, in which Varig and VASP also operate, was too small to accommodate four major domestic carriers. Brazilian airlines have been struggling since January 1999 when the country was hit by devaluation and recession.
In the last 10 years, TAM has expanded from being a regional airline to become Brazil«s second biggest carrier, operating international routes to Paris and Miami. Transbrasil, meanwhile, has been struggling to find a niche in the market and has suspended a number of international routes, including Sïo Paulo to London, Amsterdam and Vienna.
Source: Airline Business
