Market Trends
South America’s charter market is growing
The Latin American aviation market is expanding and growing fast. With an increase in the region’s middle class, a new market has emerged over the last 10 years, in particular in the South Cone. More and more passengers want to fly from Argentina, Chile or Brazil to vacation in northern destinations, including the Caribbean seas.
Airlines like Andes in Argentina and Sky Airline in Chile have wet leased A320s over the last four months to cope with the high season demand for charter flights. PAL Airlines in Chile has been in the charter business for years and has consistently wet leased an A330-300 over the last few years for the high season.
Fernando Musiet, CEO of PAL, is confident about the future of the charter market: “This market should continue to grow in Latin America. We are experiencing what happened in Europe a decade ago, where charter service companies were created to address a market that could not be covered by regular airlines.”
Musiet explains that the growth in this market can be attributed to the fact that tour operators or travel agencies are too tied to the commercial terms of the traditional airlines. “When contracting charter flights, tour operators can better manage their margins on the whole package and not just on hotels, which has been the case for the last 10 years. Obviously this requires some volumes that not all tour operators can achieve, but in many countries, they form pools that allow them to use such charter service. And it works quite well.”
The best routes for such business are the busiest holiday destinations, those that are able to generate the volume necessary for charter operations. From the Southern Cone, main destinations include Cancun, Mexico, Punta Cana, Dominican Republic and Varadero, Cuba in the Caribbean and Florianopolis, Salvador de Bahia and Porto Seguro in Brazil.
When asked why PAL chooses to operate the A330-300 , Musiet is very clear: “The truth is that for our specific market, the A330-300 is the most efficient aircraft per seat to be found. Although it can be difficult to find markets that can justify aircraft of more than 380 passengers, once tour operators and passengers have experienced a plane as modern, spacious and comfortable (as the A330-300), it is very difficult for them to look for other aircraft. So in addition to its profitability during holiday charter operations, this aircraft has helped us maintain the loyalty of our tour operators in an exceptional way.”
For more information contact:
Patrick Baudis
Vice President Marketing, Latin America & Caribbean
patrick.baudis@airbus.com