AviancaTaca, which includes subsidiary AeroGal of Ecuador, signed (26-Jan-2012) a purchase agreement for 33 A320neo and 18 A320 family aircraft. The order follows a MoU signed during the 2011 Paris Air Show in Jun-2011. The new aircraft will support AviancaTaca's expansion into new markets in Latin America. AviancaTaca has placed firm orders for 190 Airbus aircraft (including the latest 51) and currently has in service 88 A320 family aircraft and eight A330s. [more - original PR - Airbus] [more - original PR - AviancaTaca] [more - CAPA Analysis]
AviancaTaca firms up order for 51 A320s
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LATAM Airlines Group faces bigger challenges outside Brazil, as competitors in Peru and Chile attack
During the sharp economic downturn that has engulfed Brazil for more than a year the LATAM Airlines Group has benefitted from less challenging conditions in the domestic markets of its Spanish speaking countries – Argentina, Chile, Colombia, Ecuador and Peru. But during 2Q2016 weakening economies and currency pressure in some of those markets, along with growth by LATAM’s competitors, created challenges for the company in those countries, particularly the Peruvian and Chilean domestic markets.
Some of the competitive pressure in Peru’s domestic market should ease in 2H2016, which should benefit LATAM for the remainder of the year. The company is making a significant international push from its hub in Lima in 2016 and early 2017 with the introduction of eight new markets, six of which are regional routes within South America. LATAM’s expansion from Lima should allow the company to leverage North-South traffic flows for connections through what is its third largest hub measured by seat deployment. Despite bleak economic conditions in many Latin American countries, LATAM continues to leverage its diversified network to grow in markets where it faces few, if any, competitors.
The weakness in Brazil’s domestic and international markets remains status quo. However, conditions in the country’s domestic environment do not appear to be deteriorating as rapidly, which is a welcome sign for LATAM because Brazil still represented 28% of the company’s system capacity in 2Q2016.
Norwegian Air: A321neo LR gives short long haul options; 2Q margin grows on lower fuel
Norwegian Air continued its trend of improving profitability in 2Q2016, when it marked its sixth successive quarter of year-on-year increases in its operating margin. It achieved a further gain in load factor, in spite of double-digit capacity growth. The biggest sources of its growth were its US widebody routes and its operations in Spain, where it has recently opened a seventh base at Palma de Mallorca.
To a large extent its recent positive trend of growing profits has been the result of lower fuel prices. Ex fuel unit costs have been rising for several quarters, outpacing increases in unit revenue. Norwegian has only managed to achieve margin gains because of lower fuel CASK.
Norwegian's operations should become more efficient if it received US foreign airline permits for its Irish and UK subsidiaries, although there is currently little sign that this is about to happen. A new order for 30 A321LRs (part of the A320neo family) should also help Norwegian's unit cost performance and give it more choice over aircraft deployment on shorter long haul routes.