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Allegiant Steps Up Mexican Entry Via Alliance With Viva Aerobus, Makes $50M Equity Investment

  • Allegiant Travel Co (NASDAQ: ALGT) agreed to make an equity investment of $50 million in Viva Aerobus and form a fully-integrated Commercial Alliance Agreement.
  • Allegiant Chairman and CEO Maurice J. Gallagher, Jr. is expected to join the Viva Aerobus board as part of the deal.
  • Allegiant, which offers nonstop service to more than 130 cities, does not currently serve Mexico. The move expands leisure air travel options between the U.S. and Mexico.
  • The alliance will afford Allegiant and Viva Aerobus coordination across all areas of airline operations.
  • The partnership will allow Allegiant to broaden its travel offerings to include new vacation destinations like Cancun, Los Cabos, and Puerto Vallarta, Mexico. Viva Aerobus will have access to Allegiant’s distribution network and point-of-sale process. The alliance will also enable Viva Aerobus to add routes in the U.S.
  • Allegiant and Viva Aerobus have submitted a joint application to the U.S. Department of Transportation (DOT) requesting approval and antitrust immunity for the alliance.
  • The parties plan to announce specific routes targeted for service later, following the application’s approval.
  • Allegiant and Viva Aerobus currently expect to offer flights under the alliance starting in the first quarter of 2023.
  • Price Action: ALGT shares are trading lower by 4.28% at $165.8 on the last check Wednesday.

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