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CO And Latin America  
User currently offlineKlwright69 From Saudi Arabia, joined Jan 2000, 2015 posts, RR: 3
Posted (6 years 9 months 1 day 18 hours ago) and read 4581 times:

Just a question, CO has been growing aggressively across the North Atlantic. They have been growing to Asia with the recent awarding of EWR-PVG. With the arrival of the 787, CO plans to add more destinations in Asia and India, or so word has it here.

What is CO planning for Latin America? CO is already so huge in Mexico and Central America, which is already widely known. But it seems DL is surpassing them to South America. Which is too bad since CO landed in South America before DL (I remember their first South America services were Ecuador and Colombia). I would love to see CO bring back EWR-GIG. Do they want to add EWR-EZE, which they nearly started a few years back? I know it currently runs through IAH, but do they want a standalone nonstop from EWR? Any interest in the rest of South America? SCL did not work the first time, I am sure they will return at some point in the future, but nothing stated yet....

Again, I am just curious about CO's intentions since CO has shown much more interest in Europe and Asia as of late.

42 replies: All unread, showing first 25:
 
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Reply 1, posted (6 years 9 months 1 day 16 hours ago) and read 4524 times:

CO do not have sufficient long haul aircraft right now to add more flights to deep South America. With the arrival of the 787's look for CO to add EWR-EZE, IAH-GIG nonstop on a seasonal basis, and perhaps, IAH-SCL. I could also see CO adding a direct service into ASU.

CO is big...VERY big in Central America, but it is #3 in South America, behind AA and DL.


User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 2, posted (6 years 9 months 1 day 16 hours ago) and read 4504 times:

CO's lack of growth in South America has a lot to do with the airline's shortage of longhaul aircraft.....look for expansion in that part of the world after the 787 joins CO's fleet. While many 787s will be used to open new routes to Asia, India, etc....some will find their way to South America and/or 787s could take over certain routes now flown by the 767/777 will be operated by the 787 in the future, and the displaced 767/777 aircraft will be assigned to expand routes to Latin America. For example, many expect CO to launch IAH-SCL with a 762ER and many expect CO to upgrade IAH-EZE with a 772ER just as soon as CO has taken delivery of a number of 787s.

User currently offlineTpaewr From United States of America, joined May 2001, 450 posts, RR: 0
Reply 3, posted (6 years 9 months 1 day 16 hours ago) and read 4474 times:

'08 will see the start of a 3rd bank to Cen America @noon-ish, some cities are already loaded. Thus becoming 2X or 3X daily. The scdl varies by city and day but for example IAH-SJO will have an AM,midday,and a PM flight.

User currently offlineCV990 From , joined Dec 1969, posts, RR:
Reply 4, posted (6 years 9 months 1 day 16 hours ago) and read 4469 times:

Hi!

Maybe CO is not has big has other US airlines but in my case I flew EWR to BOG and they had two daily flights, one from EWR and another from IAH, both with the 737-700 and in both my flights the planes were almost full!!!
Regards


User currently offlineDesertAir From Mexico, joined Jan 2006, 1457 posts, RR: 0
Reply 5, posted (6 years 9 months 1 day 16 hours ago) and read 4445 times:

I was doing some research for future trips to South America. With CO's partnership with COPA of Panama, there are a number of South American cities served. If CO was to expand into South America, what would be their US city for these flights: Houston or Newark? AA's Miami Hub is perfect for their Central and South American network. Could CO use LAX as a South American Hub? I recognize their presence there is not strong.

User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 6, posted (6 years 9 months 1 day 15 hours ago) and read 4412 times:

Quoting DesertAir (Reply 5):
If CO was to expand into South America, what would be their US city for these flights: Houston or Newark? AA's Miami Hub is perfect for their Central and South American network. Could CO use LAX as a South American Hub? I recognize their presence there is not strong

IAH is a very good Latin American gateway.....look for most of CO's latin american expansion to be out of IAH with possibly a key route or two out of EWR. While MIA is the premier and most powerful Latin American hub/gateway, IAH is a strong Latin American gateway (especially for Central American destinations) due its geographic location and CO's powerful hub operation at that city. While it is possible that one or more airlines will launch LAX-South America services (its been discussed often here at a.net), it wont be CO that will do it......CO has no plans to expand its LAX domestic operations which would provide the necessary feed to support such flights. Some have suggested that DL or UA will launch LAX-South America services; time will tell. Note that, historically, yields on LAX-South America services are not very good, consider the long distances involved....its a very long way from LAX to GRU to EZE.


User currently offlineG5ive From El Salvador, joined Oct 2007, 105 posts, RR: 0
Reply 7, posted (6 years 9 months 1 day 15 hours ago) and read 4406 times:

But my question is, why is it that CO and some other american carriers only have 1 daily flight to SDQ? American has more than 10 daily flights from 4 of their hubs.  wideeyed 


Do I sign here?
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32601 posts, RR: 72
Reply 8, posted (6 years 9 months 1 day 15 hours ago) and read 4406 times:

Quoting Dutchjet (Reply 6):
While MIA is the premier and most powerful Latin American hub/gateway, IAH is a strong Latin American gateway (especially for Central American destinations) due its geographic location and CO's powerful hub operation at that city.

In addition, Houston has strong business and cultural ties to Central America and Venezuela.

Quoting Dutchjet (Reply 6):
Note that, historically, yields on LAX-South America services are not very good, consider the long distances involved....its a very long way from LAX to GRU to EZE.

Not only that, but the market is not as large as people think it is. Outside of Bogotá and Lima, the Los Angeles-South America market is quite small.



a.
User currently offlineTACAA320 From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 9 months 1 day 15 hours ago) and read 4375 times:

Quoting Tpaewr (Reply 3):
The scdl varies by city and day but for example IAH-SJO will have an AM,midday,and a PM flight.

And also serve LIR.


User currently offlineKlwright69 From Saudi Arabia, joined Jan 2000, 2015 posts, RR: 3
Reply 10, posted (6 years 9 months 1 day 11 hours ago) and read 4184 times:

Maybe CO will apply for IAH-MDE. But I think MAH said CO doesn't even use all their Colombia frequencies in another thread.

I think I saw a CO timetable from MANY, MANY years ago, where they went from IAH to Maracaibo. Maybe that could return. But all I know about Maracaibo is that its in Venezuela.

Maybe CO can follow DL's route, and replace routes to Europe with 757's and start more new cities that can only be served with widebody equipment.


User currently offlineMAH4546 From Sweden, joined Jan 2001, 32601 posts, RR: 72
Reply 11, posted (6 years 9 months 1 day 11 hours ago) and read 4164 times:

Quoting Klwright69 (Reply 10):
Maybe CO will apply for IAH-MDE. But I think MAH said CO doesn't even use all their Colombia frequencies in another thread.

Correct. They can use their IAH-CLO frequencies to fly IAH-MDE. They might apply for new frequencies, but if they don't show a commitment to utilize all that they have right now year-round, they will not get any new ones.

Quoting Klwright69 (Reply 10):

I think I saw a CO timetable from MANY, MANY years ago, where they went from IAH to Maracaibo. Maybe that could return. But all I know about Maracaibo is that its in Venezuela.

Venezuela is not approving expanded USA-Venezuela flights. What you see is what you get for a while. Also, USA-Venezuela traffic has collapsed in the past few years outside of traffic to South Florida, which has exploded. The reason is a dramatic drop in U.S. investment in the country, but a dramatic increase in wealthy Venezuelans moving to Miami and Fort Lauderdale as their primary residence, but maintaining Venezuelan residency and possibly businesses, and flying home very often.



a.
User currently offlineCALMSP From United States of America, joined Aug 2003, 3923 posts, RR: 7
Reply 12, posted (6 years 9 months 1 day 10 hours ago) and read 4134 times:
Support Airliners.net - become a First Class Member!

Quoting G5ive (Reply 7):

we often fly 2x EWR-SDQ on saturday's!! If thats any consolation!!



okay, I'm waiting for the rich to spread the wealth around to me. Please mail your checks to my house.
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32601 posts, RR: 72
Reply 13, posted (6 years 9 months 1 day 10 hours ago) and read 4127 times:

Quoting G5ive (Reply 7):
American has more than 10 daily flights from 4 of their hubs.

American dominates the Dominican market. They carry more airline passengers from the Dominican Republic than any other airline, even domestic Dominican airlines. This winter they will have, IIRC, up to sixteen daily flights to SDQ - seven from San Juan, four from Miami, three from New York, one from Fort Lauderdale, and four weekly from Boston.



a.
User currently onlineSTT757 From United States of America, joined Mar 2000, 16812 posts, RR: 51
Reply 14, posted (6 years 9 months 23 hours ago) and read 3940 times:

Quoting Klwright69 (Reply 10):
Maybe CO can follow DL's route, and replace routes to Europe with 757's and start more new cities that can only be served with widebody equipment.

Not going to happen, CO will continue to grow in Latin America with 737-800s and new 737-900ERs until the 787s show up. CO has 25 firm and 35 options for 787s

Quoting MAH4546 (Reply 11):
Correct. They can use their IAH-CLO frequencies to fly IAH-MDE. They might apply for new frequencies, but if they don't show a commitment to utilize all that they have right now year-round, they will not get any new ones.

IAH-MDE and EWR-CLO/MDE are two addtional routes CO would well with to Colombia, Northern New Jersey has a very large Colombian population. Avianca used to fly EWR-CLO-MDE with a daily 757-200 until they partnered with DL and moved to JFK.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32601 posts, RR: 72
Reply 15, posted (6 years 9 months 19 hours ago) and read 3809 times:

Quoting STT757 (Reply 14):
Avianca used to fly EWR-CLO-MDE with a daily 757-200 until they partnered with DL and moved to JFK.

Avianca partnered with Delta only about 3-4 years ago. They were flying to JFK well before that. They've been flying to JFK, IIRC, since the 1950s or 1960s. They've been flying JFK-MDE-CLO for over a decade, if not more.



a.
User currently offlineLuisca From , joined Dec 1969, posts, RR:
Reply 16, posted (6 years 9 months 18 hours ago) and read 3763 times:

Quoting Klwright69 (Reply 10):
I think I saw a CO timetable from MANY, MANY years ago, where they went from IAH to Maracaibo. Maybe that could return. But all I know about Maracaibo is that its in Venezuela.

CM already flies PTY-MAR with ongoing connection to IAH provided by CO so no need for a CO dedicated flight.


User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5364 posts, RR: 7
Reply 17, posted (6 years 9 months 18 hours ago) and read 3728 times:

According the the DOT's P-12 data base AA, CO, and DL earned the following net income in Latin America:

CO Q1/07 $139.7 million
CO Q2/07 $120.1 million

CO first half total $259.8 million

AA Q1/07 $116.7 million
AA Q2/07 $47.5 million

AA first half total $$164.2 million

DL Q1/07 -$29.8 million (loss)
DL Q2/07 $83.3 million

DL first half total $54.0 million

I have to caution that the profit distribution shown by the P-12 database is subject to manipulation based on allocation of fixed expenses, depreciation of intangibles, etc. Often the airlines' goal is to put the profits where they will be taxed the least. So while it isn't fair to say that Delta flies for the fun of it (DL's numbers were also distorted by bankruptcy items), the profit differences are probably indicative of general results in the region.

[Edited 2007-10-28 13:27:01]


I love long German words like 'Freundschaftsbezeigungen'.
User currently onlineSTT757 From United States of America, joined Mar 2000, 16812 posts, RR: 51
Reply 18, posted (6 years 9 months 17 hours ago) and read 3704 times:

Quoting MAH4546 (Reply 15):
Avianca partnered with Delta only about 3-4 years ago. They were flying to JFK well before that. They've been flying to JFK, IIRC, since the 1950s or 1960s. They've been flying JFK-MDE-CLO for over a decade, if not more.

Prior to moving all flights to JFK Avianca flew EWR-MDE-CLO with a 757-200 daily, their Bogota flights always flew from JFK (for a very long time as you pointed out). I made no mention of any other Avianca flights from EWR other than the MDE-CLO daily flight, it left real early in the Morning.

Quoting MAH4546 (Reply 15):
They've been flying JFK-MDE-CLO for over a decade, if not more.

Not a decade, perhaps 5-6 years. Here's a photo from 1999, Avianca did not fly from both JFK and EWR to CLO and MDE. BOG flights went from JFK and the CLO and MDE flights left from EWR, this was the case until about 5-6 years ago.


View Large View Medium
Click here for bigger photo!

Photo © Vasco Garcia



http://www.cruisinaltitude.com/images/b757/avb757gewrl.jpg

http://www.prnewswire.com/cgi-bin/st...story/07-23-1999/0000988447&EDATE=



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 19, posted (6 years 9 months 17 hours ago) and read 3688 times:

Quoting MasseyBrown (Reply 17):
So while it isn't fair to say that Delta flies for the fun of it (DL's numbers were also distorted by bankruptcy items), the profit differences are probably indicative of general results in the region.

While it is true that CO is very profitable in Latin America with the highest operating profit margin of any US airline, neither CO or AA are growing their Latin America network much - of late no more than 5%. In contrast, DL is growing Latin America on a 30% or more rate per year. Growth is costly and DL is clearly taking a hit on its profit margins in order to gain a larger share of the market.

However, it also is true that DL's network operating profit margin is 30-50% better than AA or CO because DL's domestic system is much more profitable - in fact, CO's domestic system loses money and has for a number of years. DL is subsidizing its international system from its domestic system while CO is doing just the opposite.


User currently offlineMAH4546 From Sweden, joined Jan 2001, 32601 posts, RR: 72
Reply 20, posted (6 years 9 months 17 hours ago) and read 3681 times:

Quoting STT757 (Reply 18):
Not a decade, perhaps 5-6 years. Here's a photo from 1999, Avianca did not fly from both JFK and EWR to CLO and MDE. BOG flights went from JFK and the CLO and MDE flights left from EWR, this was the case until about 5-6 years ago.

Thanks for the correction, I didn't know that. Though I know for certain that Avianca was operating JFK-MDE-CLO as far back as the end of 2000.



a.
User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5364 posts, RR: 7
Reply 21, posted (6 years 9 months 17 hours ago) and read 3662 times:

Quoting WorldTraveler (Reply 19):
CO's domestic system loses money and has for a number of years. DL is subsidizing its international system from its domestic system while CO is doing just the opposite.

No disagreement. That is why I added the comment about airlines deliberately distorting regional results. That's also why , for overall comparisons, I like to rely on bottom-line net income, which is less subject to distortion than most other measures. It seems fair, however, to rank relative regional profitability as the P-12 shows it.

It's also very fair to say that DL is planning for the long term.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 22, posted (6 years 9 months 16 hours ago) and read 3611 times:

Agree, Massey, other than costs and revenues really can't be easily moved around. There are accounting standards and all of the big six US airlines are publicly traded and thus subject to the same accounting and reporting requirements. I think CO and DL's differences in results are due to their strategies and their ability to be profitabe to varying degrees in spite of losses in one region or the other. DL and CO are the most interesting of the US airlines in that CO has apparently been unable to make its domestic system profitable while DL has been willing for several years to be barely breakeven on its int'l system while allowing its domestic system to make money (note that even during DL's worst days its domestic system was break even on an operating basis while its international losses were much larger). CO does appear to be narrowing their domestic losses and DL is cutting int'l capacity that doesn't appear to be profitable and redeploying it where it apparently can make money so there is hope that both will be profitable throughout their systems. Other carriers have had varying degrees of profiability in different regions but seem to be more aggressive in fixing the problems, including pulling down capacity. CO is adding capacity to its domestic system despite being one of the few carriers that lose money in the region while DL is adding capacity on its international system while its biggest regions - transatlantic and Latin America have yet to be acceptably profitable on a year round basis.

User currently offlineLuisca From , joined Dec 1969, posts, RR:
Reply 23, posted (6 years 9 months 16 hours ago) and read 3599 times:

Quoting WorldTraveler (Reply 22):
CO is adding capacity to its domestic system despite being one of the few carriers that lose money in the region while DL is adding capacity on its international system while its biggest regions - transatlantic and Latin America have yet to be acceptably profitable on a year round basis.

I think that 5 to 10 years from now we will all be talking about how DL and CO were brilliant in establishing themselves as dominant carrier in Latin America. DL is not as profitable in this market mainly because of the constant expansion, but it will pay off IMO.


User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5364 posts, RR: 7
Reply 24, posted (6 years 9 months 9 hours ago) and read 3447 times:

Quoting WorldTraveler (Reply 22):
There are accounting standards and all of the big six US airlines are publicly traded and thus subject to the same accounting and reporting requirements.

True, but within GAAP and DOT rules, there is still room to swing a pretty big cat. Take for example the recent terminal improvement costs DL incurred at JFK and CO incurred in IAH. One airline could decide to allocate the cost to regional operations by the percentage of domestic and international revenues generated while the other could say the expansion was intended solely to increase international flying and therefore all costs will be allocated to international. Either choice would be within the rules but could drastically affect the profits reported in the different regional segments.

Other examples: The airlines legitimately depreciate their planes (even identical models) over different numbers of years and also charge-off intangibles in differing ways. There are lots of perfectly legal differences among airlines' accounting methods, which is why financial analysts earn serious money.

Speaking of intangibles, we ought to see UA and AA writing their LHR routes down to zero.  Wink



I love long German words like 'Freundschaftsbezeigungen'.
25 2travel2know : IMHO, CO isn't taking full advantage of its relation with CM. Onlly 2 northbound and 1 southbound CO flights fit CM hub hours. If CO wants to quickly
26 STT757 : I worked in Downtown Newark on Halsey Street in 2002, I would drive past Newark Airport M-F during my Morning commute on the Turnpike. As folks who h
27 WA707atMSP : Continental was awarded this route after Braniff collapsed in May, 1982. The route was actually IAH-Maracaibo-Caracas. CO suspended it within a year
28 Yellowtail : Didn't know this.....will they be adding a 3rd daily IAH-BZE?....it is already 2X and 3X on Sat....and those flights are usually pretty full
29 MAH4546 : I have old Avianca timetables and OAG timetables from that time. Avianca was not flying to Newark in 2002. After 9.11 they cut their inter-continenta
30 MasseyBrown : I once heard the story that Eastern hired Braniff's Latin Division accountants when they bought the S.A. routes. If this is true, EA knew how to mana
31 LipeGIG : CO will try as soon as Brazil increases it's bilateral with United States to run not a seasonal, but a year-round IAH-GIG flight. Oil could explain t
32 Adriaticus : Whereas most of the foregoing posts show knowledge and savvy opinions, only Worldtraveler (Reply 19) seemed to tangentially address one aspect which m
33 Lear777 : The end of this year and the beginning of next year will see growth to SJO, GUA, MGA, PTY, LIR, CUN, etc. Brian
34 Yellowtail : Maybe their price is higher becasue their yield management is working well and their planes are fuller. If I tried to book a CO BZE-IAH for next marc
35 MAH4546 : No they wouldn't. Delta has been taking losses at Latin stations, including Belize, for years. They haven't bailed.
36 Yellowtail : They bailed on MID. and your statement is not true..by their own admission, they were doing great at BZE till they went daily with the 738 and the lo
37 Hardiwv : I think everybody is already tired about CO plans iregarding GIG. The airline seems to be satisfied with the one-stop operation via GRU. To be honest
38 2travel2know : CO has 2 daily flights to GRU, CO's associated airline CM has 2 more, so why there's no President Club in GRU? But if DL opened a Crown Lounge, I wou
39 B752OS : Are you saying that in 5-10 years both CO and DL will surpass AA in the region? Or are you saying that combined, the 2 will surpass AA to the region.
40 Toxtethogrady : I think it's a combination of too few aircraft and too much focus on Newark. LatAm is the most profitable segment of CAL's operations, and they make
41 CO787EWR : I always "heard" EWR-Asia were huge hits for CO in terms of profit am I wrong? If South America is their most profitable system it would be imperativ
42 MAH4546 : No, it wouldn't. It's their most profitable system because of smart growth. Just because you do well in a region doesn't mean you just keep on expand
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