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LCCs expanding in Latin America
The aviation industry in Latin America has evolved dramatically in the past 30 years. Where the region was merely a blip on the radar of the world’s commercial aviation industry in the 1970s and 80s, it is now home to some of the largest legacy carriers in the world.
Interestingly enough, it’s not just the legacy carriers, but low-cost carriers (LCCs), that are creating a large amount of this growth. In just the past five years, we’ve seen Mexico’s LCCs Interjet, Volaris and VivaAerobus, ascend to the top and absorb the market share left behind by Mexicana. In Brazil, Azul has become the first LCC in the Americas to establish a long-haul operation, which speaks to how rapidly this business model is growing.
While 98 percent of LCC traffic is currently concentrated in Brazil and Mexico, existing and future intra-regional and domestic traffic demand is already driving further LCC growth in other markets throughout the region like VivaColombia in Colombia, VivaCam in Central America and most recently, Sky Airline in Chile. Sky is a particularly unique case because it is the first airline in the region that has evolved into an LCC from a non-LCC model.
A few months ago, Sky CEO Holger Paulmann believed that the Chilean market was ready for an LCC. Offering the sale of one-way tickets at prices that are comparable to bus fares and charging for meals on board are a few ways that Sky will begin to implement this new business model, which will be “sustainable, economically viable and resilient to outside factors such as the price of fuel and the money exchange rate,” according to Paulmann.
Notably, Sky has just finished the renewal process of their fleet to all-A320 Family, a move that has allowed them to “simplify,” as Paulmann puts it, by incorporating “only one type of aircraft, with only one class of service, with a high-density distribution.” By cutting several-stop flights the airline’s 15 A319s and A320s will spend more time in the air than they do today, affording the airline significant savings in fuel.
It is not only high utility that makes the A320 Family a longtime favorite choice for Sky and the world’s LCCs alike. Its superior cabin size and shape result in larger overhead stowage compartments, offer more convenience and lead to faster boarding and deplaning. It’s also a perfect match for LCCs because of its superior fuel efficiency, innovation and technology benefits like fly-by-wire flight controls, and high reliability.
In 2014, Sky received IOSA certification from IATA, and in fact, since 2013 the airline has been implementing some of the best practices in technology. Some of these include FDM, also known as Flight Operations Quality Assurance (FOQA) or Flight Data Monitoring, which is the analysis of flight data by means of Airbus software AirFase; use of Performance-Based Navigation operational procedures (RNAV - RNP); and AMASIS (Aircraft Maintenance and Spares Information System) which is an integrated software solution to manage aircraft maintenance and related logistics. In the last 12 months, Sky’s reliability has stood strong at 99.4 percent on average. This rate impacts the airline’s punctuality, which according to Paulmann has increased to 95 percent of flights departing on-time from a 70 percent rate in 2013, and consequently earned the airline ranking from FlightView of 6th airline in the world.
It is in the best interest of airlines in the region to switch to the latest technology to reduce their cost base as Sky has done, and their future in the LCC domain is bright. Airbus won’t be surprised if other airlines in the region follow suit in the years to come.
For more information contact:
Lindsy Caballero, Communications Specialist
Lindsy.Caballero@airbus.com