hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RG-JJ Codeshare Ends Today

Mon May 02, 2005 8:45 pm

Today is the last day of the codeshare between Varig and TAM in the domestic routes in Brazil. The end of the codeshare was determined by the Brazilian Anti-trust Authority.

The end of the codeshare will further undermine RG's position in the market. RG will suspend 6 routes, while TAM will add capacity, add new destinations, receive new airplanes, and increase operations to 44 destinations, and to 73 destination in codeshare with smaller regional airlines. TAM's operations in GRU will increase 15% and in GIG 65%.

TAM is the current domestic market leader with more than 40% market share. After the end of codeshare RG is expected to fall to third position, behind GOL (both have about 30% market share).

Aviation analysists in Brazil stated that the end of Varig is very close, the company has a huge debt, about USD 2.5 billion, and 4 diretor of the company resigned last week. The CEO is also expected to resign soon. Some groups expressed interest in buying the airline but none of them wants to inherit the huge debt. The Government repeated that it will not invest a single cent in RG.

TAM today started its new marketing campaing in Brazil (cost of USD 6 million) and over the next two months all airplanes will receive a touch of green and yellow, resembling the Brazilian flag. Everything ready for the new flagship airline of Brazil to take off.

Rgs,
 
rojo
Posts: 2254
Joined: Tue Sep 05, 2000 6:08 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 1:41 am

Interesting... Good to see the Brazilian Government do things right.

Anti-trust Authority should make sure companies do not work as a monopoly and hurt small companies (RJ + JJ = monopoly was hurting other airlines).

The government should not invest tax payers money to save a bankrupt airline which keeps increasing its debt. Let the efficient airlines take over the market and make money. I know people will be concerned because RG employees will lose their jobs, but you can not use tax payers money just to keep jobs. If RG goes under, TAM will have to hire people; sure they will hire the talented ones, but this is how the capitalist world works.

Fair competition is what every country should have in the skies!! and the benefits should be transfered to passengers = lower fares and better service!!
 
erikwilliam
Posts: 2122
Joined: Fri Mar 12, 2004 12:30 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 2:45 am

think we can start to say BYE BYE Varig.

Wacth for GOL, as TAM is still waiting to enter BOVESPA and open it´s capital in the local stocl exchange, GOL already opened and have received autorization to sell more captal at bovespa and NYSE.

Big surprises in Brazil in 05/06
Dida, Cafu, Lucio, Roque Junior, Roberto Carlo, Emerson, Ze Roberto, Ronaldinho, Kaka, Adriano, Robinho, Ronaldo
 
HALFA
Posts: 1027
Joined: Sun Jan 18, 2004 8:24 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 4:42 am

Quoting Hardiwv (Thread starter):
Today is the last day of the codeshare between Varig and TAM in the domestic routes in Brazil

So now I will now longer be able to purchase a ticket in CGH at the TAM counter and be put on a RG flight to SDU? Will the frequencies between these two airports remain the same?

Quoting Hardiwv (Thread starter):
Aviation analysists in Brazil stated that the end of Varig is very close

How close? Did they say? Should I avoid booking tickets for future travel on RG?
This is very sad news. I would hate to see a carrier with 75+ years of service just fold up. Many good people working there.

Aloha,
HALFA
HA J Class Lie flats, coming soon to a plane near you........
 
erikwilliam
Posts: 2122
Joined: Fri Mar 12, 2004 12:30 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 4:55 am

Quoting HALFA (Reply 3):
So now I will now longer be able to purchase a ticket in CGH at the TAM counter and be put on a RG flight to SDU?

No, now, each company for itself...

Quoting HALFA (Reply 3):
Will the frequencies between these two airports remain the same?

Gotta wait and see, but, as these route is the most profitable in the country....

Quoting HALFA (Reply 3):
How close? Did they say? Should I avoid booking tickets for future travel on RG?

No worries man, even if Varig folds up tomorrow(wich won´t happen) it will all be taken care off, so pax don´t have problems, and if RG fold tomorrow and don´t lfy, things will be a bit crazy for a while.

Quoting HALFA (Reply 3):
This is very sad news. I would hate to see a carrier with 75+ years of service just fold up.

that´s what happens when u don´t run your business like you should. I agree with you, sad sad news.
Dida, Cafu, Lucio, Roque Junior, Roberto Carlo, Emerson, Ze Roberto, Ronaldinho, Kaka, Adriano, Robinho, Ronaldo
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 5:01 am

Quoting Rojo (Reply 1):
Anti-trust Authority should make sure companies do not work as a monopoly and hurt small companies (RJ + JJ = monopoly was hurting other airlines).

Correct. The first outcome of this decision was more competition and an immediate reduction on average ticket prices [e.g. the route I used to fly in Brazil CGH-NVT had its price reduced from R$260 to R$120]. The end of the codeshare will primarily benefit passengers, but it may well be the "last nail in RG's coffin" so to speak.

Quoting HALFA (Reply 3):
now I will now longer be able to purchase a ticket in CGH at the TAM counter and be put on a RG flight to SDU? Will the frequencies between these two airports remain the same?

Exactly, no more codeshare. I used to do the same before: I would book my ticket with JJ and fly RG. This is now over.

Frequencies between CGH-SDU will increase. Now there is a JJ flight every 30min from 7h to 22h. JJ and RG are not competitors on this route, and their flights overlap, since RG also flies CGH-SDU every 30min. [Recently BRA, another Brazilian LCC, also received authorisation to fly this route].

Quoting HALFA (Reply 3):
How close? Did they say? Should I avoid booking tickets for future travel on RG?
This is very sad news.

No dates but it is a question of time. I assume all RG tickets would be guaranteed. I dont think you need to worry about RG tickets, JJ would step in and they said they are prepared to honor all RG booked tickets. They also said they would fly every single RG route "which is profitable". I am sure the Government would ensure a smooth transition since RG holds 75% of the international market share among Brazilian airlines.

Quoting HALFA (Reply 3):
I would hate to see a carrier with 75+ years of service just fold up. Many good people working there.

The same here, but RG was mismanaged for many years. A business is a business and GOL and TAM are there strong as ever.

Rgs,
 
TBCITDG
Posts: 851
Joined: Sat Jan 10, 2004 5:17 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 5:07 am

Let the blood bath begin?
How have relations between the two airlines been like until recently?
Can these two airlines still code share on some services, or are they no longer allowed to do so on any routes?
 
PPVRA
Posts: 7864
Joined: Fri Nov 12, 2004 7:48 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 5:08 am

Quoting Erikwilliam (Reply 2):
think we can start to say BYE BYE Varig.

I wouldn't be so sure about it... RG may have cut some routes, but they have increased some in the NE of the country (added about 5 new frequencies between FOR and other cities)

Mr. Alencar also stated that they would interfere in RG *as a last resort* in case a market solution was not found (I doubt it will in any way include any form of financial help). Don't forget the gov owes RG nearly R$ 3 billion.

Quoting HALFA (Reply 3):
So now I will now longer be able to purchase a ticket in CGH at the TAM counter and be put on a RG flight to SDU? Will the frequencies between these two airports remain the same?

Very likely, if not increased. JJ only flies A319s to SDU while RG/G3 can fly the much larger B738. The A320 has some sort of problem operating at SDU.

Quoting HALFA (Reply 3):
How close? Did they say? Should I avoid booking tickets for future travel on RG?

It shouldn't be a problem any time soon, at least for now.

Four years ago RG had aircraft held I believe in LHR due to delayed payment of their leasings, and I believe they had to temporarily return their 738s to the lessor. RG was in a more desperate financial conditions then than they are today.

Quoting Hardiwv (Thread starter):
The CEO is also expected to resign soon.

He already did AFAIK, but the reason was because he could not manage to run FRB and the airline, he is dedicating his time to the airline alone now.

Cheers,
PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 5:34 am

Quoting PPVRA (Reply 7):
RG may have cut some routes, but they have increased some in the NE

Overall, RG decreased its total flights and network, its market share is about to drop at least another 3% this month, and GOL will overcome RG as Brazilian no. 2 airline.

Quoting PPVRA (Reply 7):
He already did AFAIK, but the reason was because he could not manage to run FRB and the airline, he is dedicating his time to the airline alone now.

He will also resign from the airline...the situiation is really bad.

Quoting TBCITDG (Reply 6):
Can these two airlines still code share on some services, or are they no longer allowed to do so on any routes?

No. It was a FINAL decision by the Anti-trust Authority, RG and JJ cannot codeshare any domestic routes in Brazil.

This decision was very bad for RG, JJ will manage to keep growing. The days of RG are on the count down...

Rgs,
 
PPVRA
Posts: 7864
Joined: Fri Nov 12, 2004 7:48 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 5:54 am

Quoting HALFA (Reply 3):
Will the frequencies between these two airports remain the same?

During the codeshare, the frequencies (RG+JJ) decreased from 66 (pre-codeshare) to 42 daily.

Quoting Hardiwv (Reply 8):
He already did AFAIK, but the reason was because he could not manage to run FRB and the airline, he is dedicating his time to the airline alone now.

He will also resign from the airline...the situiation is really bad.

Would youmind posting the link to the story? I haven't heard anything about it. But don't forget, RG also went through many CEOs a few years ago in a short period of time.

Moreover, initial reports are saying a final decision on the new investor could be reached by Saturday (link in Port.):

http://www.investnews.net/ultimasnot...id_editoria=2236&id_noticia=503026

Quoting Hardiwv (Reply 8):
No. It was a FINAL decision by the Anti-trust Authority, RG and JJ cannot codeshare any domestic routes in Brazil.

There is one exception, and thats for flights to the Pantanal. The state did not want RG to leave because they took most of the foreign tourist there, so they are allowing for that one route to be codeshared with JJ AFAIK.

Cheers,
PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 6:08 am

Quoting HALFA (Reply 3):
? Will the frequencies between these two airports remain the same?

RG increased frequencies CGH-SDU from 25 to 34 daily flights, while TAM increased flights from 25 to 31 daily flights. Overall, RG+JJ flights on the CGH-SDU route increased from 50 daily to 65 daily, each one operating one flight every 30min.

Rgs,
 
digao
Posts: 26
Joined: Fri Apr 29, 2005 10:11 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 9:56 am

Hi,

I flew CGH-BSB today and the code share end affected RG hard!!

While JJ check-in was really really busy, RG was completely empty… It was surreal. They had more staff than pax in the check-in area. I haven’t saw something close to this since a started to fly weekly to BSB (Dec/2003). Very sad.
I tried to take a pic, but my camera run out of batt.

The fun stuff was TAM people wearing red capes, just like Superman, as part of TAM new marketing campaign. All ground staff and f/a was wearing that. Really cool!
 
Brasuca
Posts: 684
Joined: Wed Mar 10, 2004 12:09 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 10:15 am

Digao,

On the other hand, I flew RG today GIG-BSB and the flight was nearly 90% full.
Varig, Varig, Varig
 
LipeGIG
Posts: 5048
Joined: Tue May 03, 2005 7:33 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 10:41 am

Quoting Digao (Reply 11):
Hi,

I flew CGH-BSB today and the code share end affected RG hard!!

While JJ check-in was realy really busy, RG was completely empty… It was surreal. They had more staff than pax in the check-in area. I haven’t saw something close to this since a started to fly weekly to BSB (Dec/2003).

Note that RG has no strong tradition on CGH. Due to the international flights RG's plane's presence is strong in GIG and GRU. They have a little presence in CGH (even Gol has more flights there), but their Rio-SP is the biggest.

Quoting Brasuca (Reply 12):
On the other hand, I flew RG today GIG-BSB and the flight was nearly 90% full.

At GIG and GRU, TAM will have a bad time because RG has the best time table and offer more alternatives. GIG's T2 RG is three times higher than JJ. GRU and GIG are strong in connections, TAM is not strong in connections as RG at GRU/GIG.

CGH: High Yield / Last Minute Pax - Tam is stronger
GIG/GRU: Medium to Low Yield (connections) - Varig is stronger
SDU: i will report on friday  Smile

Regards,

LipeGIG
New York + Rio de Janeiro = One of the best combinations !
 
digao
Posts: 26
Joined: Fri Apr 29, 2005 10:11 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 11:14 am

Quoting LipeGIG (Reply 13):
CGH: High Yield / Last Minute Pax - Tam is stronger
GIG/GRU: Medium to Low Yield (connections) - Varig is stronger
SDU: i will report on friday

Add to your list:

BSB: north,center-west and northeast connections - TAM is stronger, not that much as CGH, but still.
 
PPVRA
Posts: 7864
Joined: Fri Nov 12, 2004 7:48 am

RE: RG-JJ Codeshare Ends Today

Tue May 03, 2005 12:41 pm

Quoting LipeGIG (Reply 13):
Note that RG has no strong tradition on CGH. Due to the international flights RG's plane's presence is strong in GIG and GRU. They have a little presence in CGH (even Gol has more flights there), but their Rio-SP is the biggest.

Exactly, once JJ grows and orders more widebodies, their fleet flexibility will decrease and will have to rearrange frequencies to keep the widebodies flying (making $$$).

PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat

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