While this has been in process for a while, it’s now confirmed. Icelandair Group has acquired a 51% stake in Cabo Verde Airlines, previously known as TACV.
This is a process that was started last year, but the deal has just been closed between Cabo Verde Airlines and a subsidiary of Icelandair Group.
It goes without saying that Icelandair has built up an incredible hub for transatlantic travel, essentially connecting North America and Europe using Iceland as a stopover or connecting point. The strategy with this investment is to do something similar with Cabo Verde Airlines:
Icelandair Group believes that there are opportunities to build the company up as a strong hub and spoke airline with Cape Verde as a connecting hub between continents. Cabo Verde Airlines will benefit from the experience and knowledge within Icelandair which has a similar business model.
It’s interesting how the airlines have gotten to this point. The airline has been struggling with debt and a small, outdated fleet (at one point they didn’t even have a single functioning plane).
So last summer Icelandair entered into a 12 month management contract for the airline. With this agreement, Icelandair is responsible for the network planning, marketing, sales, and distribution of Cabo Verde Airlines flights.
At the moment Cabo Verde Airlines has two planes in their fleet, both of which are leased from Icelandair.
With Icelandair taking a majority stake in the airline, it sure sounds to me like we could see them take the operation to the next level, and maybe even expand it significantly.
The airline operates fewer routes than they used to, though historically they fly to Boston, some points in eastern South America, some points in western Africa, and some points in Europe, so they have a very well positioned hub.
The challenge is that with so few flights many of their services are once or twice a week, and that simply doesn’t work for an airline that’s trying to adopt an Icelandair model of transporting people between continents.
We’ll have to wait and see how this plays out. I’d love to see Cabo Verde Airlines turn into the next Icelandair, though I’d say the odds of a significant turnaround are slim.
Lastly, I have to note how cool an Iceland to Cape Verde flight would be solely in terms of putting this on my flight map, though I doubt there’s much demand for a route like that, regardless of how closely the airlines cooperate.
Do you think it’ll just be business as usual at Cabo Verde Airlines with Icelandair’s investment, or do you think we’ll actually see significant changes?
Binter airliner Co. is not a solution for people in Cabo Verde. They are expensive, arrogant company controlling the monopoly. We need another company to bring the price down. Some people complaint that sometimes going to Lisbon is cheaper than fly between islands. The low number of flights per day causes lots of festivities and culture tradition parties not to go do well. They are only good for the non-Capeverdean tourist traveling between island that...
Binter airliner Co. is not a solution for people in Cabo Verde. They are expensive, arrogant company controlling the monopoly. We need another company to bring the price down. Some people complaint that sometimes going to Lisbon is cheaper than fly between islands. The low number of flights per day causes lots of festivities and culture tradition parties not to go do well. They are only good for the non-Capeverdean tourist traveling between island that can afford. Perfect example; 1 de Maio in Fogo. The customer service also sucks! I will give a -1 easily on a scale of 1 to 5 to this company. I leave in the USA for more than 30 years so, when I go to my home country I'm also a tourist . 2 times they ruin my vacation CV. They have some kind of protection by Cape Verde Government that you can complain that nothing is going to happen to them garranteed.
@ Esteban
The problem with Buenos Aires is the split between two airports. Transiting from Ezeiza to Jorge Newberry can be a complete nightmare with BsAs traffic. And EZE itself can be a complete zoo (my worst was a 2 hour line for Immigration ... and then another 2 hour line for Customs.
(Incidentally, why do they x-ray your bags on the way in? Not that any of the staff are looking at the...
@ Esteban
The problem with Buenos Aires is the split between two airports. Transiting from Ezeiza to Jorge Newberry can be a complete nightmare with BsAs traffic. And EZE itself can be a complete zoo (my worst was a 2 hour line for Immigration ... and then another 2 hour line for Customs.
(Incidentally, why do they x-ray your bags on the way in? Not that any of the staff are looking at the monitors.)
Europe-LA, outside the big cities, is not brilliantly served and, as someone else has written, the northern Brazilian cities are particularly tiresome to reach (especially if you’re avoiding TAP because of their bizarre random no-service policy).
You think current connections are good? Try booking a trip from London or Amsterdam (two brilliantly connected cities) to the Argentine side of Iguazu - one of the world’s major tourism attractions. Not so easy, huh? Of course, that doesn’t mean this takeover will solve that problem...
Unless they offer very attractive fares, I don’t think the Europe-South America idea will work. Buenos Aires is connected nonstop with the major carriers plus Level, Edelweiss and Norwegian. And Brazil has plenty of options from schedule to charter flights.
Thanks to Z and to Ian for the interesting information!
I became aware of the BOS flight more than 10 years ago while waiting next to the departure gate of the TACV flight and found out that the U.S. North East has many descendants of settlers from Cabo Verde but did not know that there are many in Brazil too (even though I have been a frequent traveler to Brazil).
Ian: I think...
Thanks to Z and to Ian for the interesting information!
I became aware of the BOS flight more than 10 years ago while waiting next to the departure gate of the TACV flight and found out that the U.S. North East has many descendants of settlers from Cabo Verde but did not know that there are many in Brazil too (even though I have been a frequent traveler to Brazil).
Ian: I think that BINTER is a great airline, so I look forward to this development!
A win-win with IcelandAir!
I've been an active investor in Cabo Verde for 15 years and have seen major changes taking place on the islands since the centre right and pro business party MpD came to power in 2016. They have privatized or closed many loss making state owned enterprises and TACV (Cabo Verde Airlines) is the latest example. Tourist visas for EU, US and Canadian citizens are no longer required and they have pegged their currency to the...
I've been an active investor in Cabo Verde for 15 years and have seen major changes taking place on the islands since the centre right and pro business party MpD came to power in 2016. They have privatized or closed many loss making state owned enterprises and TACV (Cabo Verde Airlines) is the latest example. Tourist visas for EU, US and Canadian citizens are no longer required and they have pegged their currency to the Euro.
In addition, inter-island flights are now exclusively operated by Binter Cabo Verde which is an off-shoot of the successful regional airline Binter (based in the Canary Islands). Icelandair have moved the base of Cabo Verde Airlines to Sal island which has the best airport facilities on the islands and receives the largest number of tourists.
If a US pre-clearnace facility could be established in Sal airport like the facilities in Canada, Bermuda, Bahamas, Aruba, Ireland, and the United Arab Emirates then Cabo Verde Airlines could operate a hub for flights between Africa and the US east coast.
All in all, I am very optimistic for the future of Cabo Verde Airlines, now that the airline is in private ownership.
@Jan Moester
Nope actually not so daring. The Nordeste region of Brazil and New England (Boston & Rhode Island) have a significant amount of Cabo Verdean descendants. TACV (Cabo Verde Airlines nowadays) is pretty much just serving the traveling need of Cabo Verdean people. They only have 2 to 3 757/767s and most of their flights are 1-3 per week frequency.
On a side note, I do wish to see TACV starting a transit program....
@Jan Moester
Nope actually not so daring. The Nordeste region of Brazil and New England (Boston & Rhode Island) have a significant amount of Cabo Verdean descendants. TACV (Cabo Verde Airlines nowadays) is pretty much just serving the traveling need of Cabo Verdean people. They only have 2 to 3 757/767s and most of their flights are 1-3 per week frequency.
On a side note, I do wish to see TACV starting a transit program. CV has always been on my traveling list since I've heard that they are a cheaper version of Canaries/Madeiras, and not to mention they have some pretty good waves for surfers
What a fascinating takeover! I actually could see this work, with modest, limited aims by the group, as a dual-hub system. KEF for US&Can/Europe and RAI for South America/Europe and some West African cities. There are such limited options for travel to South America from even key European cities, essentially you have to fly to Rio, Sao Paulo, or Buenos Aires and change. In Brazil this means a massively longer flight in the wrong direction...
What a fascinating takeover! I actually could see this work, with modest, limited aims by the group, as a dual-hub system. KEF for US&Can/Europe and RAI for South America/Europe and some West African cities. There are such limited options for travel to South America from even key European cities, essentially you have to fly to Rio, Sao Paulo, or Buenos Aires and change. In Brazil this means a massively longer flight in the wrong direction to get to most 2nd tier cities, and often a 2-stops or more from Europe if you are traveling from anywhere except London, Paris, Madrid or Frankfurt.... If they were to focus on a few key 2nd-tier cities in both South America and Europe, I bet they could fill narrow-body planes for sure with one stop service.
I think that it is a BRILLIANT idea!
For years SAA stopped on SAL island en route to South Africa and I have followed Cabo Verde Airlines as a result of it. Their routes to South America have been daring (I think) and this development will provide an accepted, alternate way to go to and from South America.
Anything else will be a bonus!
I feel they could be the icelandair equivalent that connects North America to Africa or Europe to South America
I think they took control of the airline for several reasons. First, Icelandair has experience in running a single hub for multiple transoceanic connections with a high aircraft utilization. Secondly, given the Cape Verde is more oriented for Sourthern Europe-Brazil confections, both airlines would not be competing against each other, which is good given that the North Atlantic transoceanic low cost market is becoming increasingly crowded with low cost carriers, in much view. Lastly, and...
I think they took control of the airline for several reasons. First, Icelandair has experience in running a single hub for multiple transoceanic connections with a high aircraft utilization. Secondly, given the Cape Verde is more oriented for Sourthern Europe-Brazil confections, both airlines would not be competing against each other, which is good given that the North Atlantic transoceanic low cost market is becoming increasingly crowded with low cost carriers, in much view. Lastly, and most important in my opinion, the higher demand of Cape Verde as a (northern hemisphere) winter vacation destination, and presumably an increased number of flows from and to South America in that time of the year, can perfectly serve Icelandair to redistribute aircraft and personnel to their “southern base” when Icelandic winter comes. Let’s remember that Icelandair has been losing money, and I am sure there is little they can do by themselves to raise margins in a time of the year with less tourists going to Iceland (too cold) and less transatlantic connections.
I think the real market here is Africa to US/Europe to South America. Europe to NA routes will all make more sense to route through KEF.
I agree that straight US-Europe connections through Cabo Verde don't make any sense, UNLESS they offer a free stopover program. For the right price someone with an interest in visiting west Africa may be willing to route from BOS through Cabo Verde if they can stop and stay a few days and see a new country that they probably wouldn't have ever visited. It's a long shot, and the market it probably small, but if you only have to fill an A321 then it may work.
Their play should entirely ignore US-Europe connecting in Cabo Verde. For those routes the group will offer connections in Iceland only. focus on Europe to South America and 2,3 US gateways to West Africa. Particularly the US- West Africa, legacies fares are high and ripe for undercutting
I agree with Scandinavian Aviator. It's not such a crazy idea to connect a country with a very long winter like Iceland, to a country where it's summer pretty much all year like Cape Verde.
Well Atlantic Airways is flying Faroe Islands to The Canary Islands, so Iceland to Cabo Verde is not so far off.
And if they have rotate Aircraft in and out for maintenance, why not take som paying pax?
You have a flight map? Can you share it with us?
From RAI the A321LR could make it nonstop to MIA, ATL, YYZ, YUL and all up and down the East Coast but not ORD. I could see people flying MIA-RAI-Europe but BOS/NYC-RAI-Europe would be a stretch even if its cheap. Plus connecting in KEF would be quicker than FAI.
East Coast - RAI - Africa is what I'd love to see happen. But I think its more likely we'd see FI use most of their...
From RAI the A321LR could make it nonstop to MIA, ATL, YYZ, YUL and all up and down the East Coast but not ORD. I could see people flying MIA-RAI-Europe but BOS/NYC-RAI-Europe would be a stretch even if its cheap. Plus connecting in KEF would be quicker than FAI.
East Coast - RAI - Africa is what I'd love to see happen. But I think its more likely we'd see FI use most of their aircraft for US-Europe in high season May-Oct and then move many aircraft to offer more Europe-Brazil/South America frequencies in their high season Nov-Apr.
My ideal connection:
YHZ-RAI-DSS for a reasonable price. It would cut so much time off the trip to see my sister. Last time I did YHZ-YYZ-CDG-DKR. It involved around 24 hours of travel.
I guy can dream, right?