Summa767 From United Kingdom, joined Mar 2004, 2461 posts, RR: 6 Reply 6, posted (9 years 2 months 2 weeks 3 days 21 hours ago) and read 6632 times:
It does not read like a joke. South America has great potential, and Ryanair plenty of inexpensively acquired new aircraft, many more options, and all coming at a rate that may become too high to juggle in Europe alone.
LVZXV From Gabon, joined Mar 2004, 2041 posts, RR: 38 Reply 7, posted (9 years 2 months 2 weeks 3 days 18 hours ago) and read 6513 times:
Summa767 is right. It's no joke and certainly not a bad idea. Buying a small carrier like Pluna would be a sensible starting point in an otherwise obstructionist market. Uair (formed by TAM) are not demonstrating themselves as a competitive carrier. Ok, US$49 single flat rates to all of their 6 destinations, but you have to look at their destinations first:
From Montevideo MVD:
COR- Córdoba, Argentina
CWB- Curitiba, Brazil
MDZ- Mendoza, Argentina
POA- Porto Alegre, Brazil
ROS- Rosario, Argentina
GRU- Sao Paolo, Brazil
They will only make a difference when they start flying to ASU, EZE and SCL, and ensuring they have the AEP-PDP (Punta del Este, Uruguay) route covered by December for the lucrative summer season They've also got only two Fokker 100s leased from TAM.
It depends where Ryanair would choose to base itself in South America. In Brazil, they would face tough competition from GOL, and in Argentina, they'd have fun cutting through government red-tape only to find that the existing full-fare carriers (Aerolíneas/Austral, Aerovip, American Falcon, LADE and Southern Winds) are already offering what in dollar terms translate to rock-bottom prices (e.g. AEP-USH, the longest route in Argentina, for US$200 return). Elsewhere, such as Chile, they could give a monopolistic giant like LAN a good run for the money!
SOUTHAMERICA From Colombia, joined Dec 2003, 2496 posts, RR: 11 Reply 8, posted (9 years 2 months 2 weeks 3 days 16 hours ago) and read 6439 times:
Towards the nothern part of the continent, the situation isn't very attractive to other's eye either...
To start off, it is still a mistery for everybody how the low-cost airline concept would eventually be received in the aforementioned region, in which air travel is still seen, in most cases, as a luxurious experience by those who don't travel very often.
Then we find that most of these countries (Colombia as the perfect example), for better or for worse, are extremely protective towards national airlines, and are willing to put all the necessary obstacles in foreigners' path to protect the national bubble (this, of course, had to do with LAN's change of mind towards entering the Colombian market); and if competition is accepted, then well-known traditional airlines (AA/CO/DL) are the ones who get the opportunity to break in this niche (this was discussed in a past thread when somebody asked about USAirways' possibilities to start operations in South America).
And not to mention, as LVZXV illustrated in Argentina's example, that in these countries we see plenty of markets already perfectly covered by the existing traditional airlines, offering excellent prices and full service in many cases...
So, although pretty interesting, as far as I see it, the horizon is kind of gloomy for these type of operations in some Latin American regions...
Arcano From Chile, joined Mar 2004, 2402 posts, RR: 25 Reply 9, posted (9 years 2 months 2 weeks 3 days 16 hours ago) and read 6400 times:
I also think Pluna would be a very interesting start for a LCC.
But let's dream for a while: why not to set an LCC based in Iquique (IQQ): modern facilities, tax free zone/city (they wouldn't pay duties for imports), stable country/economy, located next to Bolivia, Peru, Paraguay, Argentina and Brazil, enoughly northern location, good weather all year long, sourrounded by many historical sites, 2 hours away of SCL with many daily flights and even better; they wouldn't have LA right there!
It's decided, The perfect hub for conecting northen and southern South America in a LCC strategy is Iquique... (now I understand why the stupid slogan of the city is "Iquique, tierra de campeones / Iquique, champion's homeland).
Regards )( Inspired Arcano
in order: 721,146,732,763,722,343,733,320,772,319,752,321,88,83,744,332,100,738, 333, 318, 77W, 78, 773 and 380
SOUTHAMERICA From Colombia, joined Dec 2003, 2496 posts, RR: 11 Reply 10, posted (9 years 2 months 2 weeks 3 days 15 hours ago) and read 6375 times:
Continuing in the dreaming path (although with the landing gear you mention in your signature already on earth) would IQQ provide enough O&D traffic, a good population base, and high yields to keep this carrier alive? You forgot these factors that are quite important.
Pdpsol From United States of America, joined Feb 2004, 1044 posts, RR: 6 Reply 11, posted (9 years 2 months 2 weeks 3 days 14 hours ago) and read 6368 times:
I really thought I'd heard it all... But, FR buying PU, or at least RG's controlling interest in PU? My god!!!
Nonetheless, in theory, this could be a rather interesting strategy. Unfortunately, as LVZXV has so correctly pointed out, operations in Argentina for anybody except for AR would be a complete nightmare! LA alone is having a dreadful time finding a way to give AR a run for their money in Argentina. As Southamerica also pointed out, Colombia, Peru and even Brazil are anything but welcoming and hospitable to foreign carriers wishing to enter their cabotage markets. The LA 'fear factor' appears to have influenced civil aviation policy throughout the region.
Until Mercosur adopts an 'open skies' regional policy and permits full control of local cabotage-rights carriers by foreign capital, I just do not see this as a viable business plan.
Nonetheless, the reality is, RG is in a major financial pickle and is, for all intents and purposes, bankrupt. I am sure they are flogging PU to anyone and everyone willing to hear their sales pitch!
BTW, I'll repeat LVZXV's question to PU803: vos sos uruguayo?
TBCITDG From Australia, joined Jan 2004, 921 posts, RR: 3 Reply 12, posted (9 years 2 months 2 weeks 3 days 14 hours ago) and read 6337 times:
Another question that comes to mind is: What happened to the talks between RG and AR regarding the Purchase of Pluna? Have the talks failed and if so, would RG prefer to maintain it's ownership of Pluna.
Arcano: I hope this doesn't put you off, but Iquique?? Would there be any money there at all for a LCC to fly back and forth? I would see a secondary Argentine city(COR) or any Brasilian city as a better option to a LCC. I know this is only a dream so let us not take offence. Just a sugestion.
Summa767 From United Kingdom, joined Mar 2004, 2461 posts, RR: 6 Reply 13, posted (9 years 2 months 2 weeks 3 days 11 hours ago) and read 6278 times:
The Low cost model is not just about not offereing free food and drink on planes. It is about getting very high productivity from staff, quick turn arounds, lots of segments flown per day, and for bigger LCC, using quantity to obtain handsome discounts on their new airplanes. So it's all about volume.
On the question that latin american passengers like to see flying as a luxurious thing, that is true to some extent. But the LCC creates demand rather than just sticking to the market already there, therefore, makes flying accessible to people who, perhaps, were not able to do it very often before.
Just last week I flew FR on a 2.5 . That was approx US$70, most of which was taxes! and that's for a return!
If I was able to fly, let's say CLO-LIM, which is about the same distance, I would be tempted to go there than if there was a starting barrier of $250.
And as for the unwillingness of latin america to welcome foreign carriers, well, it's all mostly about economics. If a Brazilian holding is going to buy 75% of Avianca, why couldn't an Irish company do the same?
SOUTHAMERICA From Colombia, joined Dec 2003, 2496 posts, RR: 11 Reply 14, posted (9 years 2 months 2 weeks 3 days 1 hour ago) and read 5013 times:
I agree. But low-cost airlines, even if the adopt infra-human efforts to reach high aircraft utilisation, fast turnarounds, and all the important elements you clearly mentioned, they still work and develop themselves, just like traditional airlines, based on customers
Even if they enter creating traffic, the existing consumers are a total must because in any other way they would be working based on possibilities and not reality.
Anyway, the closest thing we have right now to a true low-cost airline is West Caribbean Airways, and at the end of the day you'll see that they are just the average traditional/legacy airline with spots of the famous low cost concept. They have fast turnarounds and high aircraft utilisation yes, but they offer full inflight service and they don't depend almost completely on internet booking, which, in my opinion, would be another obstacle for a true LCC to develop down here.
It's hard to tell, that's why I started stating that it was a totally mistery if the low-cost method would work in Latin countries like ours, but if there's any of those carriers who has the guts to venture here, they surely have to be aware that most of the people are going to be expecting good pitch, food and service between CLO and LIM (even if it's for $70 dollars, believe me, that rosy phrase that "you get what you pay for" doesn't always appear in the geniune colombian traveller's mind), they also have to take into account that local authorities will probably give them the hardest time of their lives, have to have in mind that Internet is a privelege and not an all everyday thing, and that, for better or for worse, people almost always go to a travel agency just to book a BOG-MDE ticket, instead of calling/contacting the airline directly... things, that unfortunately, are what LCCs don't want.
LVZXV From Gabon, joined Mar 2004, 2041 posts, RR: 38 Reply 17, posted (9 years 2 months 2 weeks 2 days 23 hours ago) and read 4703 times:
I'm sure I told you before but in case you had forgotten, yes, talks between AR and RG over PU broke down some time ago. From what I remember, RG was making ludicrous requests to which AR was right to deny. AR stood to lose far more than they stood to gain. I think one of the requests was for traffic rights allowing them to fly out of AEP. A little sneaky, don't you think?
As I've said before, RG HAS done a great job with PU over the last 10 years, considering the sorry state they were in back in 1994 after 40 years of state and later military ownership. Congrats to them. However, should RG cease operations and fold, I doubt PU would survive for long unless a buyer in the form of AR, JJ or LA came to the rescue and fast. In spite of Uruguay's economic recovery (on par with Argentina's, but a year later and on a smaller scale), neither the Uruguayan Government nor the Air Force can be put in charge of them. They are so cash strapped that in 2001, the Batlle administration pulled the plug on the Air Force's military airline TAMU (of "Alive" fame...), and the Air Force itself is virtually grounded.
Thinking out loud, JJ probably couldn't come to PU's aid as I believe they already have a majority stake in LCC Uair (an airline which stands to profit enormously if only they revamped their ill-conceived network), so why set one airline against the other?
That said, with LAN showing no interest in acquiring PU, a desperate and foundering RG would probably have to accept whatever offer they received. AR hasn't lost interest for good; they are just waiting for a better deal, and I'm sure they'll get one sooner or later.
Another interesting discussion of South America. Keep 'em coming!
757MDE From Colombia, joined Sep 2004, 1753 posts, RR: 6 Reply 18, posted (9 years 2 months 2 weeks 2 days 22 hours ago) and read 4309 times:
They have fast turnarounds and high aircraft utilisation yes
They don't have such a high aircraft utilisation nor turn arounds, remember the MDs parked for hours at MDE and even taxied to the hangars, not only that, but also some ATRs parked for looong times in BOG.
I agree, WCA is a kind of Colombian LCC, but among the the spots you mention of the LCC philosophy, high aircraft utilisation and turn-around times aren't applied by them yet. I guess they'll do if the manage to fix their troubles with the new routes they want to open.
As of now, I just see WCA as a totally traditional carrier with kinda low prices.
I gladly accept donations to pay for flight hours! This thing draws man...
Summa767 From United Kingdom, joined Mar 2004, 2461 posts, RR: 6 Reply 19, posted (9 years 2 months 2 weeks 2 days 22 hours ago) and read 4234 times:
So according to the article FR are not interested in businesses elsewhere.
Southamerica, I agree with you that internet use in Latin America might not be as widespread as it is in Europe or the US. But it is precisely the people who use it more: Students and young professionals who might be the ones wishing to travel more often to more places with a limited budget. But do agree that in Latin America there would still have to be distribution through agancies (as Ryanair did when it began).
Here in Europe people used to expect a full service too. Even charter airlines would give hot meals included in the ticket price. Not anymore, bar Excel Airways. The main ones: Britannia and Monarch, there is food, but you have to pay for it, either onboard or booked in advance.
I myself was a esceptical of the no-frills model, but have seen it develop in front of me, and as with the 30 million other passengers that Ryanair will carry next year, and a similar number for EasyJet, I have become pragmatic.
I still prefer BA when I can (I just flew them from TXL - It was nice to have a free muffin and some coffee, but then again on FR you can also choose to have the same or a hot sandwich or a soup among other things-all available for purchase as they say-), but at the end of the day, for many of us at least, economics rule.
There is great potential in Latin America for both traditional, albeit more efficient Traditional carriers as well as the Low cost sort , and although it might take a little while, I also think that people will become pragmatic when choosing who to fly. Air Madrid is already a case to watch.
TBCITDG From Australia, joined Jan 2004, 921 posts, RR: 3 Reply 20, posted (9 years 2 months 2 weeks 2 days 22 hours ago) and read 4228 times:
Thanks for the update! I remember you did mention something about it, but not that detailed.
I am some what surprised that LA has not shown interest in PU! I woud think that they could 'indirectly' serve Argentina without having an airline there. They could "attack" AR from both sides of Argentina.
SOUTHAMERICA From Colombia, joined Dec 2003, 2496 posts, RR: 11 Reply 21, posted (9 years 2 months 2 weeks 2 days 19 hours ago) and read 4148 times:
They don't have such a high aircraft utilisation nor turn arounds
I agree, WCA is a kind of Colombian LCC, but among the the spots you mention of the LCC philosophy, high aircraft utilisation and turn-around times aren't applied by them yet
Even though they do probably have that objective in mind (e.g. the same ATR they use for routes based on EOH is the same that flies back to MDE to run during the evening), that only proves my point again, we're farther from having a true LCC than what everyone thinks.
But you're right, looking closely one can easily see that Aires beats the hell out of West Caribbean when talking about aircraft turnarounds and utilisation.
I get your point. I once again repeat what I said from the beginning, it's almost impossible to know if it'll work or not - who knows, maybe I'm in for a surprise - but lots of luck for the beginner of LCCs in northern South America, with patience, a slow process for breaking the traditional barriers, a good amount of strong publicity and with efficiency and honesty they'd probably pull it out.
Luisde8cd From Pitcairn Islands, joined Aug 2004, 2522 posts, RR: 32 Reply 22, posted (9 years 2 months 2 weeks 2 days 17 hours ago) and read 4085 times:
I think LCCs in S. America could succeed. Here in Venezuela the closest we have to a LCC is Laser. They operate a single DC9-32 (YV-881C) between Caracas and Margarita Island. 10 flights a day between the 2 airports. That´s 70 flights a week with a single 30 year old airplane, talk a about high a/c utilization. They offer the lowest fare between CCS and Margarita, their flights are almost never delayed and you get a small ham-cheese sandwich + beer/coke/whisky/juice/cofee. And it is only a 45min flight.
Arcano From Chile, joined Mar 2004, 2402 posts, RR: 25 Reply 23, posted (9 years 2 months 2 weeks 2 days 16 hours ago) and read 4056 times:
IQQ has no large population, but is a very important trade core in the area (with strong links with Bolivia) and touristic destination. It's the city with the largest development in Chile for the last 15 years... so why not?
BTW: LAN is adding a new destination in Argentina in December: Ushuaia, via Puerto Montt and Punta Arenas.
TDG: I don't see LA paying brand values they won't need. Look what happened with Avianca, so I don't think they would be truly interested in PU.
BTW, I heard a coupleof month ago that Uair was about to land in SCL. Any news?
in order: 721,146,732,763,722,343,733,320,772,319,752,321,88,83,744,332,100,738, 333, 318, 77W, 78, 773 and 380
LVZXV From Gabon, joined Mar 2004, 2041 posts, RR: 38 Reply 24, posted (9 years 2 months 2 weeks 2 days 15 hours ago) and read 4043 times:
IQQ really doesn't strike me as a good base for an LCC. I recognise the merits you put forth, but would they really attract consumers more than say Salta, Córdoba or Mendoza?
Re Ushuaia, are you sure it's a new destination for LAN? Back in January and February at least, LAN were stopping at USH enroute to the Malvinas (once a month) instead of the usual RGL (Rio Gallegos), and I'm sure LAN fly at least occasionally with an A320 or a 767, or are those just charter flights (check the database)? Either way, I welcome any more cross border services between Argentina and Chile, especially in Patagonia. Hopefully in return AR can start flying to the quaint city of PUQ (Punta Arenas).
Re Uair, SCL has been on their list of "future destinations" for at least 3 months, together with ASU and BUE. MVD-GRU was launched last week and EZE has been added to their current destinations (you can even book, somehow), but as I've said before, Uair mustn't lose the opportunity to silence their critics by opening up PDP-AEP and MVD-EZE in time for summer. If TAM lease them their promised 3rd and 4th Fokker 100s in time, again, it improves their chances. Remember PU will be operating 1 ATR-42, 3 B737-200, 1 B737-300 and 1 B757-200 across the River Plate all summer for as little as US$78 return--talk about "Low Cost"...
It's still early days for Uair (only 9 months old) and their low-profile has meant that few people know about them and fewer still know if their finances are healthy or precarious. I see no reason as to why the operation should have been botched--TAM was in charge--but whoever conducted the market research on initial routes (MVD-COR, MDZ, ROS) doesn't seem to have done a good job, to put it mildly. Traffic between MVD and BUE is high year-round for business purposes, so why oh why has it taken so long to inaugurate the service when the Argentine Government granted Uair the necessary traffic rights as far back as April?
How do you say "12 months" in Estonian?
25 Arcano: About Ushuaia: yes, or so LAN announced yesterday in "El Mercurio" with a full page add: "Next destination: Ushuaia Argentina", with pictures and ever
26 LVZXV: Arcano: About LAN's Malvinas flights: They are operated 1 x weekly (Saturdays) as flight LA991 (outbound) and LA990 (return) with A320s. I don't know
27 Hardiwv: Just some update: RG is still in talks with IB about PU. IB is very interested in PU, and started to operate direct flights MAD-MVD (report realeased
28 LVZXV: If IB acquire PU, I can only hope that they don't to them what they did to AR, AU and Viasa... ZXV
29 Arcano: If IB acquire PU, I can only hope that they don't to them what they did to AR, AU and Viasa... And LADECO, the biggest lost in Latin American Aviation
30 Arcano: Actually, after a closer look I just realized that this photo is wrongly labelled; it's not SCL. Maybe GIG??? Regards, )(
31 LVZXV: Que tal Arcano, looks like GIG to me, judging bythe towers. ZXV
32 Derico: MDZ pros for a LCC: Seen as one of the most stable provinces in Argentina according to Newsweek Magazine, CNN Travel, EU TV, etc. Fiscally responsible
33 Tavong: Well in Fact GOL is the only "true" LCC in Southamerica (and that's mainly cuase the brazil market is quite different from the other cutries), the oth
34 Hardiwv: Arcano: I also think the photo is actually in GIG! Tavong: Also agree. I think that Brazil is the only country in South America with the size and mark
35 Arcano: Derico: How could Chileans not like Mendoza??? It was founded by Chileans ad was Chilean till the creation of the Virreinato de la Plata!!! Now serous
36 Hardiwv: Derico: So now try to imagine a real LCC (GOL 737) approaching the MDZ International HUB Does it feel good?
37 LVZXV: Arcano: How could Chileans not like Mendoza??? It was founded by Chileans ad was Chilean till the creation of the Virreinato de la Plata!!! ...and Chi
38 Arcano: Excuse me, we are talking about the Capitania General de Chile Semi-Independent colonial territory, with some dependence of LIMA, since we decided the