Corsair and Air Austral join forces on Reunion Island

This is a new effect of the covid crisis in air transport. Faced with the drop in frequentation on flights between the metropolis and the island of Reunion, Corsair and Air Austral have decided to form an alliance. In a press release released on Tuesday, the two companies announced that they had initiated “discussions in order to conclude a commercial cooperation agreement on the roads between the metropolis and the Indian Ocean”. Previously, the project had been unveiled to the staff representatives of each of the companies.

This project, which has yet to be validated by the French competition authorities, would consist of jointly marketing their respective offers on flights between Paris and Saint-Denis, but also on their other destinations: Antilles, Canada, Africa for Corsair, Mauritius, Madagascar Seychelles and Comoros for Air Austral.

No merger However, this is not a pure and simple merger project, since it preserves “the identity and independence of the two companies », Specifies the joint press release. The terms of this agreement are not specified, but it could be a joint venture agreement, making it possible to share, on varying terms, the costs and revenues of lines marketed jointly under double flight number.

This type of commercial alliance is nothing new. In 2012, Corsair had already concluded a commercial agreement of the same kind with Air Caraïbes, its competitor in the Antilles, until the rupture in 2019. In general, it is a question of facing a more powerful competitor, by offering a wider offer without having to invest.

But in this case, it would be above all a question of “To improve profitability”, knowing that Corsair and Air Austral both benefited from rescue plans partially financed by public money, and that they are still very much in deficit. In addition, if Corsair is a private company, Air Austral is controlled by the region of Reunion, which holds % of the capital.

Reducing overcapacity For passengers, this would make it possible to borrow flights from one or the other, at the same conditions and therefore benefit from a wider choice of schedules. But on condition that this agreement does not result in a reduction in supply and an agreement on prices. Which seems difficult in a destination as competitive as Reunion, served by four companies in total, with Air France and French Bee , the low-cost company of Dubreuil group.

As for the competition, it could possibly benefit from a merger which would reduce overcapacity and avoid a new price war, as soon as the high season has passed. With traffic halved by the pandemic and a health situation still uncertain, Reunion is no longer the “millionaire” line it was, capable of accommodating four French companies.