Viva and Volaris try to shake up the LCC market in Latin America while Sky switches its model

The dynamics of potential LCC upstarts in Latin America have shifted rapidly during the last few months. The Viva Group, whose airlines include Mexico's VivaAerobus and VivaColombia, appears to have shelved plans to launch a third airline in Costa Rica. However, Mexican low cost airline Volaris has swept in, reportedly declaring its intent to establish a new subsidiary in the country.

At the same time Chile's second largest airline, Sky, is working on its transition to a low cost business model, perhaps in part to prevent another airline from attempting to inject low cost competition into the market. Chile's largest airline is LAN, which is part of the powerful LATAM Airlines Group.

In some ways, the spread of the low cost model in Latin America (excluding Mexico) has moved slowly for a market that has numerous opportunities for traffic stimulation. Perhaps the barriers to establishing a new airline remain high even if all the elements are in place for effective market stimulation.