Boeing Commercial Airplanes VP Randy Tinseth, on his Randy's Journal blog, stated (08-Oct-2013) Latin America is a "booming region", adding: "São Paulo, Santiago, Bogotá and Mexico City—all exciting cities with populations fuelling an aviation growth spurt." He noted, "We expect Latin America to grow at one of the fastest rates in the entire world— with the airline fleet in the region tripling in size over the next 20 years. That’s a whopping 2900 new airplanes valued at $300 billion. The overwhelming majority of those new airplanes coming into the Latin American fleet will be single-aisle. Our airline customers in the region have already placed 120 orders for the 737 MAX—and we’re working hard to make sure many more orders come in. Our forecast also shows that Latin America will need 270 smaller widebody airplanes— a demand the 787 family is well positioned to meet. The 787 is already in service with Aeromexico and LAN. Soon, Avianca will receive its first Dreamliner." During a visit to the region, Mr Tinseth noted: "Across the board, everyone is excited about the growth on the way for this region—both economically and in air travel. They were also genuinely excited about the new products we’ll be bringing to the market over the next several years, from the 737 MAX, to the new members of the 787 family, to the 777X."
Latin America is a 'booming region': Boeing
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Finnair and TAP Portugal: their location based long haul niche strategies compared
Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.