The Viva Group settles on Peru amid changing competitive dynamics in Latin America

Peru has emerged as the country of choice for the third airline of the Viva Group, which aims to launch its Viva Air Peru during the first half of 2017. In the past Viva has toyed with the idea of spreading its low cost brand to Peru, but chose to pursue an opportunity in Costa Rica that it later abandoned due to the high operating costs imposed on the country's airlines.

Peru has numerous attractive attributes for a low cost start-up, including favourable economic growth, the absence of a true low cost airline and strong domestic passenger demand. Trips per capita for Peru are similar to the still-developing (and growing) markets of Mexico and Brazil, which each feature low cost competitors.

But the current iteration of the Viva franchise faces some changing dynamics in the Latin American market place - primarily the recognition by the region's largest airline groups of the LCC threat, and their adoption of new tools to compete more effectively with existing and aspiring LCCs.