Growth in Chile's domestic market remains flat as Sky Airline embraces the LCC model

Growth in Chile's domestic passenger market was flat during the first eight months of 2015, in a region that was one of Latin America's fastest growing areas just a couple of years ago. The slowdown is driven in part by overall sluggish economic growth within Latin America and the weakening of Chile's currency.

It is not obvious when domestic passenger growth will resume, but the general consensus is Latin America's economy will likely remain weak throughout 2016. At the same time domestic passenger numbers are leveling off, Chile's second largest airline Sky appears to be shifting its business strategy from a hybrid offering to a more pure low cost model.

Chile did enjoy solid growth in international passengers during the first eight months of 2015, reflecting growing tourist numbers and perhaps a strategy by the country's largest airlines to allot capacity to higher yielding regions.