Recorded at CAPA Latin America Aviation & LCCs Summit, 10-Sep-2018
The Intra Latin America Outlook
Latin American airlines hold a reasonably positive outlook for 2018 as a crop of new low cost carriers continue full steam ahead in their efforts to stimulate traffic in the region, and larger network airlines balance new competition with their quests to build global network utility and pursue intra alliance JVs.
Steady capacity increases are planned for the domestic markets of Brazil and Colombia as both countries begin to recover from economic downturns but some uncertainty remains in Brazil pending the outcome of the Oct-2018 presidential elections. Increasing liberalisation has also helped catalyse the growth ambitions of LCC start ups. Chile, which allows 100% foreign airline ownership, has seen its airline duopoly disrupted by the arrival of the Indigo Partners controlled ULCC JetSMART, while in the once highly protected Argentina aviation market, one of the more closely watched developments will be the launch of Norwegian Air Argentina in Oct-2018, whose debut will put conclusions that the country is ripe for new low cost competition to the test.
But favourable market and regulatory conditions cannot overcome inadequate infrastructure and archaic air capacity management systems, with many of Latin America’s key markets in urgent need of infrastructure upgrades and air traffic modernisation to support airline growth. And the region is one of the most expensive in the world when it comes to passenger and airline charges – in some cases, taxes and boarding fees represent more than 40% of the final ticket price.
- Reviewing the core markets of Brazil, Peru, Chile, Colombia, Argentina and Mexico and prospects for growth
- Will an operating utopia ever be within reach for the region’s airlines or will infrastructure constraints and high taxes impede growth?
- Will pan regional brands come to dominate the competitive landscape?
- What is the current state of play of JVs and alliances among the region’s larger airlines and how effective is it as a mechanism for bolstering network coverage?
- Can Latin American carriers learn from their global counterparts and launch low cost subsidiaries to avoid ceding market share to LCC competitors?
- What else must they do to defend against LCC market incursions? How to bring Latin American taxes and charges in line with international best practice?
Moderator: ALTA, Executive Director, Luis Felipe de Oliveira
Panel:
- Aerocivil, Director, Juan Carlos Salazar
- Azul, Chief Revenue Officer, Abhi Shah
- IATA, Regional VP, The Americas, Peter Cerdá
- LATAM Airlines Colombia, CEO, Santiago Alvarez