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About The Future Of Airlines In LatinAmerica  
User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Posted (15 years 1 month 1 week 4 days 5 hours ago) and read 4639 times:

I'm just asking myself about the future of airlines in LatinAmerica... considerating that the biggest market is the USA and looking right now at the over-presence of the big airlines of the USA (American, Continental, Delta, United to name the biggest) and the weak economies in our countries.

Only LanChile (Oneworld), AeroMexico (Skyteam), Mexicana & Varig (Star) are members of a big airlines unions... & being something like the poor brothers of that unions (example: the troubles between Varig & United with transfer passengers in JFK - Airways, may 2001).

What do you thing about the future of the LatinAmerican airlines? ... I don't know what is going to happen down here but I think that some airlines can merge doing what Grupo Taca did... became a middle size airline system to be competitive against the biggest airlines in the world with some hubs in LatinAmerica... .

Perhaps I'm dreaming... what do you think about it?


19 replies: All unread, jump to last
User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Reply 1, posted (15 years 1 month 1 week 3 days 1 hour ago) and read 4528 times:

no one?...

User currently offlineRojo From Spain, joined Sep 2000, 2519 posts, RR: 8
Reply 2, posted (15 years 1 month 1 week 3 days ago) and read 4524 times:

I think that Grupo Taca is the best example of an alliance between airlines. They created a reputation and a brand recognition of very tiny airlines in Latin America. As a management strategy fan, I think that what Taca has done is what will happend with the big alliances in the world. Don´t be amazed that in some years, every airplane belonging to a StarAlliance partner will be painted with the Star logo and will be distinguished by the name of the airline in the front of the aircraft. AeroMexico tried to create a sort of TACA in Latin America with AeroPeru, but they couldn´t make it work because of the fraud made by the ex CEO De Prevoisan. Will see what happends, but Latin America is sure a place where air travel will grow and where airlines will go desapear because of competition and wrong management.


User currently offlineGuerosinfe From Brazil, joined Mar 2001, 316 posts, RR: 0
Reply 3, posted (15 years 1 month 1 week 2 days 23 hours ago) and read 4515 times:

The Latin America airlines will stay as they are right now, for example LanChile has grown a lot a few years ago, now they got an almost whole new fleet and new destinationns.
All the Latin American airlines have better fare than UA and AA, except of VARIG. CO and DL can be an option, but only for the U.S. that is not the only destination in the world, but people prefer to fly their national carrier, that for other places like Europe are much cheaper.
Of course some airlines will disapear, for example Brasil has four major airlines(VARIG, TAM, VASP, TransBrasil), and all are operating in the red since long time ago due to the bad managment and the financial problems of customers and the airline.
Other thing is that national airlines see the other airlines taking their market and do nothing, for example CO and AA have profitable flight from Belo Horizonte(CNF), to EWR and MIA, VARIG don't have international U.S./Europe flights there, if things goes like this we will be in trouble.
Brasil is a market to grow, but one thing that make us being in this bad situation is this: 35% of the price of the ticket go to the government, while in the U.S. this number is 7%!!


User currently offlineChepos From Puerto Rico, joined Dec 2000, 6383 posts, RR: 10
Reply 4, posted (15 years 1 month 1 week 2 days 23 hours ago) and read 4507 times:

I can see some profitables and well managed airlines in Latin America , like for example Copa Airlines. They are really doing a good job with their hub in Panama City and connecting North America with South America . Another Airline that with a good restructuring and getting rid of the VASP owning partof their share this airline can become very profitable - LAB. They should also sort of modernize their fleet and get a vibrant established and most important stable International Airline to Invest money in them and they can really saor high. And I also see very big problems with other Airlines for example Aerolineas Argentinas and VASP.
Puerto Rico

Fly the Flag!!!!
User currently offlineToxtethogrady From United States of America, joined Dec 2000, 1781 posts, RR: 0
Reply 5, posted (15 years 1 month 1 week 2 days 22 hours ago) and read 4498 times:

The only profitable flag carrier in the US, at the moment...

Grupo TACA made an error by linking up with OneWorld. Now they are bellyaching because Continental has commanded the lions' share of the Central America-US market, through their Houston gateway.

User currently offlineLatinplane From United States of America, joined Dec 1999, 2807 posts, RR: 11
Reply 6, posted (15 years 1 month 1 week 2 days 20 hours ago) and read 4506 times:

Here's my personal imput.

I can't comment too much on Brazil because I don't have too much experience in that sector, but I can only say that the Brazilian airlines are the biggest airlines amongst them all. Varig (the star of South America) is up there because they developed their reputation and their route structure at a time when the Latin American countries' national airlines were sleeping. Except for maybe Viasa of Venezuela and Colombia's Avianca which were also big players once.

It depends on the situation for each country. If you notice the more stable countries such as Brazil, Mexico and Chile is were the action is.

With the recent news on the Avensa/Servivensa issue, I am wondering what will become of Venezuela's commercial aviation industry. It seems Avensa will not survive while the other Venezuelan airlines are very weak. The fact that it's category 2 country is one of the reasons but I believe another reason is the whole political situation in the country created by years of mismanagement and the current leader of state...
I don't know if any airline would want to come in and invest in an airline when the Category 2 is still in place because you cannot guarantee profits there.

Things won't change in Colombia any time soon. The country's entire infrastructure is weak due to war situation of the country... Quite a change of the good old days when Avianca was the first airline in Latin America to operate the 747.

I see Lan Chile gaining ground in the entire region. I would expect Lan Chile to purchase Vasp's stake in Ecuatoriana and turn into into another LAN franchise such as: Lan Ecuador. In the future, I wouldn't hesitate to think I would see them in Argentina as Lan Argentina. Argentina is the cream of the crop that goes to waist and I see Lan Chile being to hungry to not have it's cake and eat it too...

The Aerolineas Argentinas soap opera continues. The aircraft mechanics just went on strike because Spain's Sepi has just started to implement their job cutting measures.

My cristal ball sees TACA starting a franchise in Venezuela... TACA Venezuela? hmmm, maybe! TACA can create a loop hole to Venezuela's category 2 status. TACA may wet lease those A320's to TACA venezuela just like it does with TACA Peru.

There is a current story this week on Flight International, which is on the Mexican airline industry. According them, this market is the fastest growing among all of Latin American countries currently growing 7.3% per year for the past 5 years. It alone
compromises 25% of the growth in all of Latin America. Boeing will be opening their first regional office in Latin America on Mexican soil this coming june. It was also stated that Mexicana is interested in more 757's to add to the fleet and is even hinting at 757-300's to fly the longer routes such as Buenos Aires. Mexicana wants Airbus, while AeroMexico is only considering Boeing. AeroMexico wants more 757/767 family while the old DC-9's will be replaced with used MD-80' family aircraft. Both airlines are really interested in the 717. Mexicana wants to get rid of those pesky F-100's while AeroMexico's DC-9's are creating maintenance issues for the airline. Nevertheless, the Mexican airlines will become foreign owned. Delta will buy AeroMexico, Lufthansa or United will buy Mexicana, American may want to get AeroCalifornia, TACA might be interested in Aviacsa to add to their shopping list. Lan Chile already bought Mexican cargo carrier Mas Air.

My humble 2 cents worth...

A. Diaz

User currently offlineTrintocan From United Kingdom, joined Apr 2000, 3297 posts, RR: 4
Reply 7, posted (15 years 1 month 1 week 2 days 19 hours ago) and read 4497 times:

As Latinplane said, the picture varies considerably from country to country. Certainly AeroMexico, Mexicana, Grupo Taca, Varig and LanChile are the big players now. Venezuela is sadly in a big mess from which it could take many years to recover. The fact that 4 years after VIASA's collapse it still has not really reestablished a national airline speaks volumes.

Mexico and Brazil are the largest markets, both domestically and internationally, so it is no surprise that their airlines are best poised for future growth. Their booming tourist industries will continue to ensure a market for air services there.

All in all, a very mixed picture.


Hop to it, fly for life!
User currently offlineAlvaro From Mexico, joined Feb 2001, 239 posts, RR: 1
Reply 8, posted (15 years 1 month 1 week 2 days 2 hours ago) and read 4471 times:


I do agree with you. However, mexican airlines won´t be fully foreign owned. You have to remember that in case (wich is pretty much sure) that a foreign airline buys AeroMexico or Mexicana would only be able to buy a 25% stake. Now, for example, a wealthy mexican man of company could also buy either AM or MX if they wanted to. So it doesn´t have to be a foreign airline. Another thing, what makes you think AA may buy AeroCalifornia and Taca might get Aviacsa? Those airlines had nothing to do with Cintra and, as far as I know, they not for sale. So if they were on sale, I don´t think foreign carriers would buy a stake of them.
On the other hand, anything can happen now, aviation is fastly growing not only in Mexico but in Latinamerica as well and the only thing we can do is wait and see...

En Mexicana cumplimos 85 años de hacerte sentir el placer de volar sin limites
User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Reply 9, posted (15 years 1 month 1 week 2 days 2 hours ago) and read 4468 times:

I think the only way that the brazilian airlines can compete in a good way is if the brazilian gov. try to understand that with the kind of competition you can see between airlines can be done without that kind of taxes... as Guerosinfe said, those taxes are struggling their profiles!!!!!!!!.

For example, in Venezuela we use to enjoy the cheaper gas in the whole world... but that's just for cars, because taxes for airplanes gas is so big... for example: when Viasa was fliying, they used to full with gas their planes outside Venezuela (it was cheaper in MIA than in CCS for example).

The situation here in Mexico es really exciting about the capacity of growing of the airlines (Mexicana & AeroMexico to be most clear)... but their trobles are always about the airports, all of them so small for growing.

... about TACA Venezuela?... well, my father told me that he had a flight when he was a child between Coro & Caracas using a DC3 of TACA de Venezuela... it was in the 40's I guess... so the history can be written again!!!!.

(by the way LatinPlane... tell me what else you can see in your crystal hahahahahahahahahahahahaha... I like to read your posts so much!!!!).


User currently offlineLatinplane From United States of America, joined Dec 1999, 2807 posts, RR: 11
Reply 10, posted (15 years 1 month 1 week 1 day 18 hours ago) and read 4456 times:

Hi Alvaro,
How's the temp.in GDL? My sister is there visitng.

I know that both AeroCalifornia and Aviacsa are not part of Cintra. But remember that AA claimed it was ready to do whatever it takes to purchase either AM or MX.

If American doesn't get AM or MX, they might want to consider AeroCalifornia. Why not? They said they would be willing to do anything to get into the Mexican market. Besides, in order for JR to better compete in the new Mexican market, it will have to do something about updating it's services to 2000 standards. The airline cannot expand unless it gets enough new capital to finance the purchase of new jets and new infrastructure. What better way, than to sell a 25% stake. It cannot go at it alone by just being a family owned business. It's time for globalization.

Don't think TACA doesn't think about getting into the Mexican airline market. Aviacsa and TACA have worked closely. TACA isn't affraid to expand it's horizons and they are probably just waiting to make the right move.
A Mexican affilate would mean the jewels on their crown in their network. But I'm not sure of this, it's all speculation.

WildmanVzla, I'm going to take out my crystal ball.

Let's see... hmmm, I also see Lan Chile looking closely at Venezuela... Could there be a possible: Lan Venezuela? Don't know, but I see Lan very interested as they already have 5th freedom rights on the CCS-MIA route. All that Lan Chile would need to do is transfer some of their 737's paint Venezuela's name on them and run them on the most popular domestic routes wet lease some of their upcoming spare 767's. Another loop hole to the Category 2 situation. Lan Chile can apply for more CCS-MIA and CCS-JFK routes and fly them with their own 767's. Not a bad idea...

Best regards,
A. Diaz

User currently offlineAlvaro From Mexico, joined Feb 2001, 239 posts, RR: 1
Reply 11, posted (15 years 1 month 1 week 1 day 4 hours ago) and read 4439 times:

Hey, the temperature is nice but it gets very hot in the afternoon. By the way, I have a mexican-aviation new: Azteca will start schedule service within the next two weeks, I saw it the other night on TV. And GDL International Airport is being renewed (sp), they are already done with the domestic terminal and they´re now working on the international t. They are also improving the exterior, it´s starting to look completely different, you should come down here. So we´ll see what happends, it should be ready by the end of the year.

En Mexicana cumplimos 85 años de hacerte sentir el placer de volar sin limites
User currently offlineRayChuang From United States of America, joined Jun 2000, 8364 posts, RR: 4
Reply 12, posted (15 years 1 month 1 week 1 day ago) and read 4428 times:

I think because of the fast-growing Hispanic community in the USA, I won't be surprised that both AM and MX will likely place fairly large orders for new planes over the next 4-5 years.

They could make a ton of money serving the Mexican Riviera for US tourists, and definitely could make money on flights from US cities with large Hispanic populations into most of the major cities in Mexico.

My guess is that both Airbus and Boeing are going to fairly busy building A330's and 767-300/400ER planes for AM and MX as the demand increases.

User currently offlineRojo From Spain, joined Sep 2000, 2519 posts, RR: 8
Reply 13, posted (15 years 1 month 1 week 11 hours ago) and read 4420 times:

It is time for Azteca to start passenger revenue service. They have been ready since february but both Mexiana and AeroMexico CEO´s forced the ministry of communications to stop the start of Azteca. We hope they start soon, but a new fare war will come??

Another braking news: the mexican congress decided yesterday that both AeroMexico and Mexicana will be sold together as CINTRA, and they want to make the mexican airline industry a priority for the country, so the mexican ministry of communications can rule the fare structure of the airlines. Alfonso Pasquel already stated that this will make us go back in time to the years of flag carriers and will make our airline industry sink. Unfortunately our congress people are too stupid and will take decisions to benefit the government and not the many people traveling in Mexico. What can we expect if some congress people do not know how to read and write.

We will see what happends???????????


User currently offlineRawch From Switzerland, joined Feb 2006, 17 posts, RR: 0
Reply 14, posted (15 years 1 month 1 week 6 hours ago) and read 4409 times:

I read in a Panamanian newspaper a couple of months ago that Aeroperlas (regional airline in PTY member of Grupo Taca) was given permission to open 14 new international routes. Actually the routes that Copa has to Buenos Aires, Rio & others were meant for Aeroperlas, but the DAC (PTY equivalent to FAA) took the permissions away due to the many "accidents" that Perlas had last year.

Perlas appealed & they apparently have received permission again. The article also stated that starting this July they would use 4 A319/A320 to start international service. They apparently want to set up a hub similar to Copa's in Tocumen (PTY). This would mean a fierce battle between Taca & Copa.

Has anyone else heard anything about this?


User currently offlineChepos From Puerto Rico, joined Dec 2000, 6383 posts, RR: 10
Reply 15, posted (15 years 1 month 6 days 22 hours ago) and read 4391 times:

It had been reported a couple of months ago in the media here in Puerto Rico that Aeroperlas had been granted permission to fly to Luis Munoz Marin in San Juan but nothing more has been said.
Puerto Rico

Fly the Flag!!!!
User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Reply 16, posted (15 years 1 month 6 days 7 hours ago) and read 4377 times:

very nice reflexions... thank you so much by the way... but anyone can tell me what's going to happen with airlines in Argentina?


User currently offlineRojo From Spain, joined Sep 2000, 2519 posts, RR: 8
Reply 17, posted (15 years 1 month 6 days 1 hour ago) and read 4373 times:

Southern Winds and LAPA will get the whole market, Aerolineas Argentinas will be bankrupt soon and Dinar will be in a lot of trouble.

Argentina has serious econimic problems and the government will not be able to save AR. Many jobs have been lost and more will come if Argentina decides to devaluate the Peso. Hope the Tango effect don´t hurt the other latin american econimies.


User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Reply 18, posted (15 years 1 month 5 days 18 hours ago) and read 4356 times:

Rojo... that's why I'm always dreaming about a alliance like Grupo Taca of some airlines of LatinAmerica... look what's happening in Venezuela & what's going to happen in Argentina!!!!


User currently offlineWiLdmanVzla From Mexico, joined Sep 2000, 616 posts, RR: 1
Reply 19, posted (15 years 1 month 4 days 5 hours ago) and read 4348 times:

Any other opinions?????

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