The US ultra-low-cost carrier Allegiant Air believes it could launch flights to Mexico by the end of the second or third quarter of 2024. According to Allegiant and Viva Aerobus’ consolidated reply to Volaris and the International Brotherhood of Teamsters' letters of opposition to the airlines’ Joint Venture Agreement, both carriers are ready to implement their alliance as soon as the Department of Transportation (DOT) gives its approval.
Prepared to go
Allegiant Air and Viva Aerobus are requesting the DOT to grant anti-trust immunity and approve their joint venture agreement to launch a partnership that would allow them to offer new routes and flights between the United States and Mexico.
Earlier this year, the DOT finished reviewing the application and opened the process for public comments. The Mexican ultra-low-cost carrier Volaris and Allegiant’s pilot union, the International Brotherhood of Teamsters (ITB), filed letters of opposition. Volaris argued, among other points, that the airlines were not ready to deliver the promised benefits of their partnership and that the DOT should not authorize the Joint Venture until Mexico regains Category 1 status with the Federal Aviation Administration (FAA). The ITB exposed its worries about the equitable work the alliance would bring US pilots compared to Mexican pilots.
Responding to Volaris, Allegiant and Viva Aerobus said they intend to launch the association one day after the anti-trust immunity is granted. Within 30 days, Allegiant would begin selling existing Viva Aerobus-operated flights. The US ultra-low-cost carrier currently does not operate international flights, while the Mexican operator offers 20 routes and 111 weekly flights to the United States.
Within the first three months, the two airlines would announce new routes under the scope of the alliance. Finally, Allegiant would be able to start flying to Mexico within the first year of the launching of the Joint Venture. “G4 can start service on its own metal by late Q2 to Q3 of 2024,” said the airline.
Challenges ahead
Nonetheless, all these plans are subject to two crucial developments taking place in April 2023. First, the DOT has to approve the Joint Venture. Then, and possibly most importantly, Mexico has to regain Category 1 status with the FAA. While Mexico remains downgraded, the Allegiant-Viva Aerobus partnership can’t legally begin.
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The airlines requested the Department should not wait until Category 1 status is restored to act on the Joint Application. They said that there is substantial network planning and revenue management work that still has to be done. Therefore, the sooner Allegiant and Viva and Allegiant can start this coordination, the sooner the benefits will reach consumers, they argued.
Allegiant and Viva Aerobus believe their partnership will significantly benefit consumers. For instance, they expect to operate approximately 38,000 additional departures, offer average fares 58% lower than the current market, serve 6.4 million extra passengers, add 18 aircraft, and generate $790 million in customer savings through 2026.
No work for Allegiant pilots
The ITB is increasingly worried about the Joint Venture agreement and what this means for Allegiant’s pilots. This Union is convinced that Allegiant is looking to replace American airline pilot jobs with those of Mexican pilots, whose salaries are between five to six times lower.
The ITB argued that in the first two years of the Joint Venture, none of the new flying created would be performed by Allegiant’s pilots. In the mid-term, the union believes that there won’t be an equitable distribution of growth in block hours for Viva and Allegiant pilots. The ITB requested the Department to deny the Joint Venture and Antitrust Immunity requests.
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