LCC/ULCC model disrupting Latin America aviation
There’s been a raft of changes in Latin America’s low cost sector during the past two to three years, with start-ups in Chile, Argentina, Peru and Central America. At the same time, some of the older LCCs in Latin America have built up sizeable seat share in two of the region's largest markets – Brazil and Mexico.
As new competitors have emerged the region’s existing airlines have adapted their models to ensure that they compete effectively, since low cost ambition in Latin America shows no sign of abating. The ULCC group Viva plans to decide on a third country for its franchise within the region over the next 12 to 24 months, and the Chilean LCC Sky also plans to launch a new airline in Peru during 2019.
All of the ambition is driven by the still untapped potential in Latin America. The country’s largest airline – LATAM Airlines Group – calculates trips per capita in its domestic South American markets at just 0.6 in 2017. Given the difficult topography of much of Latin America, where other transport modes are inadequate, this could become much higher than other markets.
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