Azul Signs Codeshare With Struggling Alitalia

Brazil’s Azul and Italy’s Alitalia have signed a codeshare agreement which will significantly increase route options for both airlines’ customers. The agreement will be particularly important for Alitalia, which continues to struggle financially.

An Alitalia Airbus A320
It’s been a hectic year for Alitalia. Photo: Eric Salard via Flickr

On Thursday, Flight Global reported on a new deal between Azul Linhas Aéreas Brasileiras and Alitalia.

The codeshare deal will provide both airlines access to each other’s route network, which will particularly important for Alitalia. The Italian flag carrier hasn’t been profitable for a while now, and efforts to get it back on its feet have hit a number of hurdles.

What will each airline get out of the new codeshare deal?

Codeshare deals are signed between airlines all the time. Most of the time they’re signed by airlines located in neighboring regions.

A codeshare agreement allows one airline to sell seats on another airline’s routes as if they were their own. Gaining access to routes outside of their normal operating area is the main objective.

In the case of Azul and Alitalia, the new codeshare deal will allow them to offer a number of new routes on the other side of the Atlantic.

Azul Linhas Aéreas Brasileiras Embraer ERJ-195AR
Azul will provide Alitalia’s customers with many new South America destinations. Photo: Diegonvs via Flickr

Alitalia will immediately gain access to the huge number of domestic destinations served by Azul.

According to Abhi Shah, Azul’s vice president of revenue, “Alitalia customers will be able to connect to Azul’s more than 100 domestic destinations, more than half of which are exclusively served by Azul.”

This could be a lucrative prospect for Alitalia, as it will allow it to connect Brazil’s large Italian/Italian heritage population with Italy itself. On the other hand, Azul will be able to increase its trans-Atlantic presence, a key objective the airline has publicly stated it is aiming towards.

Azul also announced plans for a joint venture with TAP Air Portugal earlier this month. As the largest operator of scheduled trans-Atlantic flights between Europe and South America, TAP Air Portugal will be a key strategic partner for Azul.

Will a new codeshare agreement help struggling Alitalia?

Although the codeshare agreement with Azul will offer Alitalia customers many new South American destinations, Alitalia itself isn’t doing so well.

This year it seems there have been reports of new parties showing interest in an Alitalia acquisition every other week. But none of the rumors have amounted to much so far.

From easyJet and China Eastern in March to Lufthansa and even the owner of Rome’s S.S. Lazio, Alitalia has struggled to find investors to keep it afloat.

An Alitalia Airbus A320
Alitalia needs significant investment to become profitable again. Photo: Eric Salard via Flickr

It seems Delta Air Lines has come the closest to signing an investment deal with Alitalia, but recent news of a larger bid from Lufthansa may have scared the American airline away.

Regardless of who invests in Alitalia, the airline still needs to sort out a new business plan for its relaunch.

The deadline for the new business plan is just around the corner – 21 November. While it seems the news of a codeshare agreement with Azul will be seen as a positive, there are a number of other much bigger issues to sort out before Alitalia can become a success again.