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New LCC Announced In Colombia For 2H 2011  
User currently offlineSamuP From Colombia, joined Jul 2010, 52 posts, RR: 0
Posted (5 years 10 months 3 days 4 hours ago) and read 4147 times:

I came across an interesting article in a Colombian business magazine. According to the article a new LCC is in the plans for the end this year. The temporary name is La Nueva Aerolinea (The New Airline) which in my personal opinion reflects poor creativity and I hope it gets changed soon, but again that's just my opinion.

The most interesting thing is the team they have gathered, which includes:

Juan Emilio Posada: Former CEO of AV (Avianca) and VX (Aces)
Fred Jacobsen: Former CEO of QT (Tampa Cargo)
William Shaw: Former Regional Director of BA (British Airways of course  ) for the Andean region.

According to a second source, there is still debate over the family of aircraft to be chosen. Naturally they want to stick either to 737 or 32X only. I find it strange they haven't stated public interest in considering Embraer and Bombardier jets. The new company has applied to the Aerocivil (Colombia's FAA equivalent) to start a hub in El Dorado Intl Airport in Bogota (BOG/SKBO) and their intention is to fly from BOG to the core Colombian routes i.e. RNG CLO CTG BAQ BGA SMR. They will be notified of their approval/denial within 11 business days.

But the question is: Is there a market to support 7 carriers?
AV - Avianca
4C - Aires
EF - Easyfly
P5 - AeroRepublica (Copa)
9N - Satena
LA - LAN Colombia / AerOasis. Set to start operations in 2011(I know this is not the correct IATA code but I don't think they have one yet)

I know this has already been discussed in SCL767's LAN Colombia Set To Fly In 2011 but in light of this news I think it would be great to hear what you all have to say.

Link to LAN Colombia's discussion: LAN Colombia Set To Fly In 2011 (by SCL767 Jun 8 2010 in Civil Aviation)
Link to News Source (Spanish): http://www.dinero.com/edicion-impres...egocios/nueva-aerolinea_74551.aspx
Link to News Source (Spanish): http://www.laopinion.com.co/noticias...tent&task=view&id=355737&Itemid=32

3 replies: All unread, jump to last
User currently offlinejfk777 From United States of America, joined Aug 2006, 9776 posts, RR: 6
Reply 1, posted (5 years 10 months 3 days 3 hours ago) and read 4083 times:
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IS it 1978 in Colombia and deregulation just got enacted ? Let the red ink flow. The airlines part of a greater multi-country group should be fine with their greater capacity to withstand a fare war. But are Aires and other new airlines financially capable of an extended fare war ?

User currently onlineSumma767 From United Kingdom, joined Mar 2004, 2691 posts, RR: 5
Reply 2, posted (5 years 10 months 3 days 2 hours ago) and read 4032 times:

Quoting SamuP (Thread starter):
Juan Emilio Posada: Former CEO of AV (Avianca) and VX (Aces)
Fred Jacobsen: Former CEO of QT (Tampa Cargo)
William Shaw: Former Regional Director of BA (British Airways of course ) for the Andean region.

Certainly heavyweight names behind this venture. Good luck, but it does look as if the field is very crowded, and the infrastructre of BOG, already under strain, would be even more so..

Fares are low. Aires has already brought a low fare revolution, that has allowed people to jump from buses to planes, plus more leisure trips to places such as San Andres.
AeroRepublica is losing money, which is in sharp contrast to its mother airline Copa, that has one ofthe higest margins in the industry.
I don't see how there is room for 2 new airlines at the moment (yes in the long term). Economic growth in Colombia is looking better than a few months ago (mainly to do with mining and oil exports), but it does not seem to be tricklig down to employment that remains highest in LatAm and sub-employment (this one is actually increasing).

So there is significant potential for new flyers in the medium term, but I don't see real economic empowerment at the moment, just a market response to very low fares that already have the colombian domestic market making losses.

User currently offlineRCS763AV From Colombia, joined Jun 2004, 4445 posts, RR: 11
Reply 3, posted (5 years 10 months 2 days 22 hours ago) and read 3945 times:

I don't see it happening. In reality, even though the domestic market has expanded almost 100% in three years, there is so much capacity that airlines are flying at 70% load factors at most, with trash yields. I can't see anyone who would put their money on a carrier that also wants to start operating in BOG which will be absolutely crowded until 2012-14 when the new infraestructure is finished. Colombian business people should learnrlines are not as profitable as other business ventures geez...

Plus, Mr. Posada doesn't have a good reputation in the country, he was responsible for ACES' debalce and the pathetic try to hide it called Alianza Summa.

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