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Aerolineas Argentinas Part 2: widebody fleet renewal could lead to new phase of long haul growth

Aerolineas Argentinas is planning to order new generation widebody aircraft in 2018, which will be used to replace its remaining A340s in 2020 and its A330 fleet by 2024. New widebody aircraft should also enable the airline group to resume expansion of its long haul network and significantly improve the economics of its European operation.

In the nearer term Aerolineas is looking at international expansion opportunities within the Americas using its future fleet of 737 MAX 8s. Aerolineas will likely use the new narrowbody aircraft to launch new international routes from Córdoba, as well as adding capacity on existing regional international routes from Buenos Aires.

Aerolineas Argentinas has a relatively small international operation and strategically needs to accelerate international expansion, although its short term focus is on further domestic expansion. The group flew only 2 million international passengers in 2016, and expects similar international traffic in 2017. Meanwhile the group’s domestic traffic, which has already more than doubled over the past five years, is expected to increase another 20% in 2017, to 10.5 million passengers.

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