Indigo Partners Update

Transcript

William Franke:JetSMART is an airline that we started up in Chile and based in Santiago, Chile, late July of last year. It is currently flying within Chile. Chile's a long, thin country and underserved from many aspects, so we've been focused on getting our legs under us, so to speak, while we fly within the country. We recently started flying from Santiago to Lima, Peru, and that's been a terrific success so far. A lot of people like Argentina right now. You've seen Flybondi, Norwegian, one of the Avianca shareholders has started an airline there. I worry that there may be too much exuberance in advance of the opportunity, but we think Argentina longer term is an important market if you're a Latin American airline. The politics have been difficult for a number of years. You have a new administration which has been very pro-business and focused on foreign direct investment, so we'll take a hard look at Argentina. A lot of airlines have orders in front of them, and there's been a number of announcements about increased capacity in certain US major hubs. Certainly our friends at United have been aggressive in talking about growth plans. That said, the market has so far been able to absorb the growth that's been identified, and you're seeing in early days but some recovery in revenue by the major airlines, which is an important focus in terms of the rest of us in the marketplace. You have to keep in mind that the low-cost, ultra-low-cost airlines only occupy about 6 or 7% of the domestic market, so We really need to see what the majors are doing at any particular time. Frontier's interesting. When we acquired Frontier in December 2013, it was heavily focused on Denver. It was a Denver-centric airline, and we've worked hard to spread its network to communities that needed the flying, and that's worked well for us. And you can expect to see the airline continue to branch out. It has a significant order book in front of it over the next 5 years, and we think it's going to be a very successful carrier. So far, the results have been remarkable from our perspective. We, we think you have to look at all sorts of opportunities across the low-cost network, and we viewed Volaris and Frontier as natural codeshare partners because of geography. Both fly each other's markets to some extent, so this is an opportunity to try the idea of a codeshare between ultra-low-cost carriers to see whether it works. We like to work with our portfolio airlines to look at opportunities to support one another. The recent Airbus order is a good example of that.

Copyright policy: All transcripts on this site are the copyright of CAPA - Centre for Aviation. Our reproduction policy is as follows: you may quote up to 400 words of any transcript on the condition that you attribute the transcript to CAPA - Centre for Aviation and link to the original video page. All other use is prohibited. While we aim for 100% accuracy in the transcript, there may be some minor transcribing errors.