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- Lan Airlines S.A.
Americo Vespucio 901, Renca
- Main hub
- Bogota El Dorado International Airport
- Business model
- Full Service Carrier
- Airline Group
- Part of LATAM Airlines Group S.A.
- Frequent Flyer Programme
- LATAM Pass
- oneworld (affiliate)
- Joined Alliance
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LAN Colombia (previously Aires), d/b/a LATAM Airlines Colombia, is a Colombian airline based in Bogota, with additional bases in Barranquilla and Medellin. LATAM Airlines Colombia has experienced strong growth in recent years, capturing a larger share of the growing domestic market and expanding into international markets across South, Central and North America. The carrier was established on 03-Dec-2011 under the brand LAN Colombia.
Location of LAN Colombia main hub (Bogota El Dorado International Airport)
LATAM Airlines Group SA share price
27 total articles
Latin American airline group Avianca Holdings is welcoming continued improving trends in the region, which started to emerge in 2Q2016 and appear to be gaining strength in 2H2016. The company’s yield decreases slowed year-on-year in 3Q2016 to the single digits, and Avianca posted a rise in yields sequentially from 2Q2016 to 3Q2016.
Avianca’s optimism rests on robust load factors, particularly on long haul routes from its largest market – Colombia –to the US and Europe. Demand is also picking up in South America as travellers adjust to the effects of currency depreciation that, while improving, have become a mainstay in many markets in the region. Avianca’s booking trends for Nov-2016 and Dec-2016 indicate that positive momentum is continuing into 4Q2016.
The company faces changing dynamics in its largest market Colombia in late 2016 when Copa Airlines shifts its business model in the country to a low cost operation in order to compete more effectively. Avianca seems unconcerned about Copa’s change in strategy, citing its strong position in Colombia despite increased competition arising in the country’s domestic market during the last few years.
Colombia’s market should undergo further changes in 2017 when LATAM Airlines Group begins instituting a new pricing model in its domestic markets, including in Colombia.
Cautious optimism exhibited by Copa Airlines at the end of 2Q2016 that challenging conditions in Latin America were showing some signs of improvement has turned into a full-blown declaration that the worst is over in the region. Although yields remain depressed, Copa turned a corner in its passenger unit revenue performance in 3Q2016, posting positive results driven by healthy load factors. Copa continues to experience strengthening demand, and believes it is only a matter of time before yields turn a corner.
The changing conditions have resulted in Copa issuing a slight upward revision to its margin guidance for 2016, and the airline has outlined a framework for restoring its operating margins to the high teens during the next couple of years. Copa’s preliminary growth project for 2017 is an ASM increase of approximately 5% driven largely by aircraft ultilisation.
As optimism builds that Latin America is starting to turn an economic corner, Copa is undertaking a strategic business move by shifting its business model in Colombia to a low cost operation. The new entity Wingo is debuting in Dec-2016; Copa holds the view that the shift in business model is low-risk, and highlights the fact that Wingo does not carry the same challenges as low cost subsidiaries created by other airlines.
After years of fading into the backdrop of Colombia’s aviation market, Copa Airlines is making a bold move to make itself more competitive in the market place. Copa is reigniting competition after the company’s subsidiary Copa Colombia decided to cede domestic market share to other airlines a few years ago, in order to focus largely on international routes.
Copa’s weapon of choice is the creation of a new low cost airline Wingo, operated as a unit of Copa Colombia with a targeted market debut in Dec-2016. Wingo is designed as a lower frills point-to-point airline, operating four Boeing 737s in a single-class 142-seat configuration. It is a shift in strategy for the Copa Group, which operates a full service model leveraging traffic flows over its hub at Panama City Tocumen international airport.
Wingo is also adding service to Panama City’s Pacific international airport, (Panama City Pacifico), which results in Copa’s business units then operating to the city’s two airports. Copa’s commitment to serve Panama’s secondary airport reflects its new strategy to become more competitive in Colombia’s aviation market, and create a defensive shield against further LCC encroachment in the future.
Latin American airline group Avianca is attempting to mitigate tough conditions in the region, particularly a sharp devaluation of the currency in its largest market Colombia. Steps the company is taking to counteract weakness in Colombia and throughout Latin America include a domestic capacity reduction within Colombia and fleet adjustments that include both deferral of aircraft deliveries and grounding of its subfleet of Embraer 190 aircraft.
Similar to most airlines operating in Latin America, Avianca is attempting to match its supply with demand and shore up yields, even if that means sacrificing some market share, as is the case in another one of its large markets Peru.
The worsening conditions in Latin America have forced Avianca to join most of its rivals operating in the region to issue a downward revision of its EBIT margin for 2015, a discouraging sign for a company that embarked on 2015 in a seemingly better position than its rivals.
Colombia’s aviation market appears relatively stable despite the steady growth of the country’s low-cost airline VivaColombia through the establishment of a base in Bogota during 2014 in its quest to attain a 20% market share within Colombia.
For the first three months of 2014, VivaColombia’s domestic market share grew to approximately 10% from 8% the year prior. The country’s other domestic airlines also kept their respective shares at essentially the same levels year-on-year, which shows that the supply and demand balance is fairly rational.
The number of Colombia’s international passengers also grew at a solid clip, reflecting the country’s overall stability, decent economic prospects and a growing middle class that remains attractive to all airlines serving Colombia.
Avianca’s strength in Colombia and Peru, two of Latin America’s fast growing markets, helped the carrier record strong financial results for 4Q2013 and FY2013.
The company also achieved other significant achievements in 2013 including rebranding all the carriers within the Avianca-TACA group to Avianca and the completion of a listing on the New York Stock Exchange to broaden its reach for funding for expansion.
A continued fleet renewal and long-haul growth is driving Avianca’s planned 8% to 9% capacity growth during 2014 as the carrier readies for the launch of new service from Bogota to London in Jul-2014. Given Avianca’s strong performance during 2013, it should be able to absorb the capacity increase without hurting its profits.