Latin America reopens and airlines try to gauge demand


Latin America is slowly beginning to open up, and some border restrictions are easing as the region and the world adjust to the reality that COVID-19 will remain a part of everyday life for the foreseeable future.

The next few weeks will be an important gauge for demand in markets that have recently opened up, including Peru, Colombia and Argentina, which is itself working to restart commercial aviation operations sometime in Oct-2020.

Brazil, meanwhile, which never completely shut down its commercial airspace, continues to see a steady increase in demand; but obviously that increase is off historic lows, and a return to normal levels for the country is at least a year away.

  • Latin America is slowly reopening its borders and easing travel restrictions.
  • Peru, Colombia, and Argentina are among the countries that have recently restarted commercial flights.
  • Traffic in Latin America remains significantly depressed, with a year-on-year decline of over 75% in August 2020.
  • Colombia's low-cost carrier Viva Air Colombia reported transporting 100,000 passengers with an 80% load factor in its first month of operations after the restart.
  • Brazil's domestic market shows promise, with airlines gradually adding back flights and expecting a gradual increase in demand.
  • Brazil's domestic passenger levels in August 2020 dropped by 72%, but there are projections that the market could reach 2019 levels in 2021.


  • Markets in Latin America are starting to reopen, but traffic in the region continues to remain depressed.
  • The domestic market in Brazil continues to post positive month-to-month trends, but traffic still has a long road to recovery.

Demand trends will be monitored closely as Latin America's aviation restarts

During the past couple of months some important markets in Latin America have restarted commercial flights, including Peru and Colombia, which essentially shut down their domestic and international airspace in Mar-2020 in order to contain the spread of COVID-19.

As a result of the closures, traffic in Latin America was stalled from Apr-2020 through May-2020, and was still down more than 75% year-on-year in Aug-2020.

Latin America: total RPK growth, 2017 to Aug-2020

The industry will be closely monitoring traffic during the next couple of months as markets start to reopen.

Data from CAPA and OAG show that for the week of 12-Oct-2020 Colombia's domestic capacity will fall by 73%, and Peru's should fall by 64% year-on-year. Both those countries are in the midst of restarting international flights.

Airlines operating in those countries are working to match their capacity with demand, but it is not clear if booking windows are as short as elsewhere in the world. However, those operators are likely injecting low fares into the market in order to entice the public to travel.

The Colombian low cost operator Viva Air Colombia recently stated via its LinkedIn account that it had transported 100,000 passengers during its first full month of operations after the restart of flights, and had posted an 80% load factor. Data from CAPA and OAG show that Viva Air Colombia served 11 domestic Colombian markets for the week of 5-Oct-2020.

Colombia's largest airline, Avianca, which is currently restructuring in Chapter 11 bankruptcy protection, is scheduled to operate a total of 40 destinations for the week of 5-Oct-2020: 24 in Colombia, 11 in Latin America and five in the US.

At the time that Colombia restarted commercial aviation, its president, Iván Duque Márquez, stated that "throughout September 2020 we will observe the pandemic's behaviour, how are the prevention measures, how prevention protocols are developing".

See related report: Colombia reopens. Will air travel materialise?

LATAM Airlines Peru was the country's largest airline before the COVID-19 pandemic, and LATAM Airlines Group recently declared that its Peruvian division would operate to 15 domestic destinations in Oct-2020.

Viva Air Peru served nine domestic markets for the week of 5-Oct-2020.

Brazil's domestic market shows promise, but passenger levels remain depressed

Brazil's traffic at the end of Aug-2020 was slightly higher than Latin America's as a whole. Early on in the pandemic the country allowed airlines to operate essential networks, and during the period May-2020 to Jun-2020 GOL and Azul started to add back their flights steadily, and to have a brighter outlook than most other operators about an uptick in demand.

Brazil domestic RPK growth: 2017 to Aug-2020

During Sep-2020 Azul operated 42% of the capacity it deployed in Sep-2019, and it expects to reach 55% in Oct-2020. The airline has previously declared that its capacity for Dec-2020 would reach 60% of levels a year ago in 2019.

In Aug-2020 Azul stated that average fares had come up nicely, and demand volumes remained steady as fares increased. However, those fare increases remained off a low base.

GOL has stated that it plans to resume 80% of its pre-crisis network and frequencies by the end of 2020, and believes some corporate demand could return in late 2020. With the potential return of some business traffic, the airline has also said that it could resume somewhat normal booking curves.

The airline stated that booking windows had shrunk to 20 days during the pandemic, compared with 60 to 90 days under normal circumstances.

See related report: GOL expects return of business travel by the end of 2020

The airline's domestic traffic in Sep-2020 increased by 36% month-to-month compared with Aug-2020, on a monthly capacity increase of 35%. GOL's load factor for Sep-2020 was 80%, but its domestic traffic on a year-on-year basis in Sep-2020 was down 54%.

Overall, demand in Brazil's domestic market remains depressed, as data from ANAC show that domestic passenger levels in Aug-2020 dropped by 72%.

There have been some projections that Brazil's domestic segment could reach 2019 levels in 2021, which is a shorter recovery period than other regions of the world. That is against the backdrop of Brazil still remaining as one of the top countries measured by confirmed COVID-19 cases, at approximately 5 million - the third largest number of cases behind the US and India.

It's time to gauge demand as Latin America slowly reopens

Airlines in Latin America will continue to adjust their capacity as they work to gauge demand in various markets as they open up.

Although it is tough to predict the precise trajectory of demand in the region, it is a safe bet that it could be jagged, as countries in Latin America continue to balance public health safety and economic preservation.

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