Copa Airlines (CPA) announced it has reached an agreement with United Airlines (UAL) and Avianca (AVH) for a joint business agreement, or JBA, that, pending government approval, is expected to provide benefits for customers, communities and the marketplace for air travel between the United States and 19 countries in Central and South America. By integrating complementary route networks into a collaborative revenue-sharing JBA, Copa, United and Avianca will offer customers many benefits including integrated service in more than 12,000 city pairs, new nonstop routes, additional flights on existing routes and reduced travel times. The carriers expect the agreement to drive traffic growth at gateway cities throughout Latin America. Further, the carriers anticipate the JBA will provide customers with expanded codeshare flight options, competitive fares and a more streamlined travel experience. Additionally, the JBA is expected to enable the companies to better align their frequent flyer programs, coordinate flight schedules and look to improve the overall travel experience. Although JBAs around the world have been shown to benefit consumers and enhance competition, currently 99% of the U.S. carrier passenger traffic that makes connections in Central and South America does so without a JBA. Competition in the Latin American-U.S. market has grown and includes a diverse set of carriers offering service across multiple price points. The agreement represents an innovative, new product offering that the carriers believe will make competition stronger. To enable the deep coordination required to deliver these benefits to consumers, communities and the marketplace, Copa, United and Avianca plan to apply for regulatory approval of the agreement and an accompanying grant of antitrust immunity from the U.S. Department of Transportation and other regulatory agencies. The parties will fully implement the JBA after receiving the necessary government approvals. The JBA currently includes cooperation between the U.S. and Central and South America, excluding Brazil. With the recently concluded Open Skies agreement between the US and Brazil, the carriers are exploring the possibility of adding Brazil to the JBA.
