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LAN To Buy Up To 20 A320s For Colombia Expansion  
User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Posted (3 years 8 months 1 week 20 hours ago) and read 7341 times:
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LAN Airlines S.A. CFO Alejandro de la Fuente told Dow Jones Newswires that LAN will likely purchase between 15 and 20 A320-family aircraft for its impending expansion in Colombia. In Colombia, LAN Airlines S.A. plans to follow the same business model, "That has made it one of the leading airlines in Latin America. The business model includes short-range domestic flights, regional connectivity and long-haul cargo and passenger flights".
http://www.morningstar.com/news/dow-...0s-for-colombia-expansion-cfo.aspx

34 replies: All unread, showing first 25:
 
User currently offlineEnviroTO From Canada, joined Aug 2004, 825 posts, RR: 0
Reply 1, posted (3 years 8 months 1 week 20 hours ago) and read 7513 times:

Doesn't seem likely that LAN and Avianca would end up in the same alliance to me.

User currently offlineFCKC From France, joined Nov 2004, 2348 posts, RR: 4
Reply 2, posted (3 years 8 months 1 week 19 hours ago) and read 7348 times:

These A320s (or perhaps a mix of A320 and A319) being destined for Aires and Aeroasis , means probably the end of the 737-700 at the former.

User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 3, posted (3 years 8 months 1 week 18 hours ago) and read 7187 times:
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Quoting EnviroTO (Reply 1):
Doesn't seem likely that LAN and Avianca would end up in the same alliance to me.

LAN and TAM simply want to offer their current and future customers new destinations that are already served solely by Star Alliance newest recruits, AV/TA and COPA Airlines/COPA Colombia. For LAN Airlines (LATAM), Colombia will serve as the main platform for LAN's expansion into Central America and the Caribbean. LAN Colombia will also strengthen air-links between Latin America, the United States and Canada.

Quoting FCKC (Reply 2):
These A320s (or perhaps a mix of A320 and A319) being destined for Aires and Aeroasis , means probably the end of the 737-700 at the former.

That is accurate since LAN does not operate any B737s. Besides, AIRES fleet of 9 B737s are hardly factory fresh, (most are over 8 years old). On the other hand, AerOasis has already incorporated three A320s into its fleet: HK-4740, HK-4738 and CC-CQM. AerOasis expects to be certified by Colombia’s CAA in mid December. The carrier will then start selling flights for a February launch. Colombia's CAA has already awarded AerOasis the rights to operate 14 domestic routes.

http://www.aeroasis.com/rutas/


User currently offlineSJOtoLIR From Costa Rica, joined Jul 2007, 4391 posts, RR: 4
Reply 4, posted (3 years 8 months 6 days 13 hours ago) and read 6293 times:

Aires also operates turboprop planes for some of their destinations and the 320s do not fit in some of their current routes.
It would be interesting if those turboprops may be replaced later as well.

Regards.



"Goin' up to the spirit in the sky"
User currently offlinesupersomondoco From Colombia, joined Dec 2009, 24 posts, RR: 0
Reply 5, posted (3 years 8 months 4 days 8 hours ago) and read 5847 times:

Well, it seems AerOasis already started operations...

http://jetphotos.net/viewphoto.php?id=6982145&nseq=0



To steal ideas from one person is plagiarism. To steal from many is research.
User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 6, posted (3 years 8 months 4 days 8 hours ago) and read 5762 times:
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Quoting supersomondoco (Reply 5):
Well, it seems AerOasis already started operations...

AerOasis is currently preforming "proving flights" with-in Colombia. AerOasis S.A. will be integrated into LAN Colombia, (along with LAN's current Colombian subsidiary, AIRES), when the carrier receives its operational certificate (ATO) from Colombia's Unidad Administrativa Especial de Aeronáutica Civil. AerOasis S.A. will launch commercial operations as part of LAN Colombia on February 15, 2011. Some flights are already loaded into GDS. For example,

LA3000:BOG-MDE
LA3002:BOG-CLO
LA3004:BOG-CTG


User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 7, posted (3 years 8 months 2 days 21 hours ago) and read 5182 times:
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Quoting SJOtoLIR (Reply 4):
Aires also operates turboprop planes for some of their destinations and the 320s do not fit in some of their current routes.
It would be interesting if those turboprops may be replaced later as well.

It will be interesting to see what AIRES future fleet looks like by February. According to Ignacio Cueto, LAN's President and Chief Operating Officer, "As of September 2010, AIRES had operating revenues of US$190.9 million. The AIRES fleet consists of 9 B737-700s, 11 Q200 and 4 Q400, all of which are operating leases." Thus, it will be interesting to see which a/c leases are renewed,(or if a new a/c type is incorporated into LAN's fleet). The B737s will most likely be phased out since LAN will replace them with new A320s, (some A320s will also go to AerOasis S.A).

AIRES S.A. PR: http://www.aires.aero/aires/sala_de_prensa/compra_aires.aspx

Currently, LAN is focused on ensuring that the standards of safety, punctuality and efficiency in LAN's new subsidiary are consistent with LAN's own specific standards. Also, "The integration process would involve some operational changes, such as route changes and improvements in efficiency. This process does not interfere with the continuity of current operations AIRES, and is expected to be completed within the next few months."

LAN's President further stated that, "Its new subsidiary will replicate LAN’s successful and efficient “low cost” model already operating in the domestic markets of Argentina, Chile, Ecuador and Peru, stimulating demand on domestic flights by providing more Colombian citizens the opportunity to use air transportation." LAN's President explains that, "In the medium term, AIRES will evaluate the expansion of international passenger operations and the advantages of any synergies it may obtain from LAN Cargo’s affiliate in Colombia, LANCO, launched in March 2009."

LAN PR: http://www.lan.com/en_us/sitio_perso...sa/20101126_adquisicion_aires.html


User currently offlineSJOtoLIR From Costa Rica, joined Jul 2007, 4391 posts, RR: 4
Reply 8, posted (3 years 8 months 2 days 13 hours ago) and read 4935 times:

Quoting SCL767 (Reply 7):
Thus, it will be interesting to see which a/c leases are renewed,(or if a new a/c type is incorporated into LAN's fleet).

In my view, a new aircraft would be necessarily incorporated into LAN's fleet in order to attend some stations served by AIRES at this time: Apartado, Neiva, Ibague, Popayan, Puerto Asis, Quibdo, Villavicencio and Yopal.

Regards.



"Goin' up to the spirit in the sky"
User currently offlineRCS763AV From Colombia, joined Jun 2004, 4393 posts, RR: 12
Reply 9, posted (3 years 8 months 2 days 8 hours ago) and read 4766 times:

Quoting SJOtoLIR (Reply 8):
Apartado, Neiva, Ibague, Popayan, Puerto Asis, Quibdo, Villavicencio and Yopal

Manizales has a crap airport, so it can go on the list (the new Aerocafé is not going to be operational in 2011). Armenia and Florencia don't guarantee enough demand, and routes like Medellin-Bucaramanga and Medellin-Pereira have the same condition, so those can go in there too. It has been mentioned that the turboprobps will stay. I wonder if LAN might decide to replace them with ATR-600s in the near future, as some of the Q100 are getting old. AIRES' original plan was to replace them all with Q400s but EOH ops won't allow it (max 50 seat aircraft).

Quoting SCL767 (Reply 7):
"Its new subsidiary will replicate LAN’s successful and efficient “low cost” model already operating in the domestic markets of Argentina, Chile, Ecuador and Peru, stimulating demand on domestic flights by providing more Colombian citizens the opportunity to use air transportation."

This is what is ridiculous about LAN's competitive argument. AIRES already does that, and way more than they will ever be able to offer.



Les escribo desde el frío de mi verde altiplano.
User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 10, posted (3 years 8 months 2 days 7 hours ago) and read 4700 times:
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Quoting RCS763AV (Reply 9):

Quoting SCL767 (Reply 7):
"Its new subsidiary will replicate LAN’s successful and efficient “low cost” model already operating in the domestic markets of Argentina, Chile, Ecuador and Peru, stimulating demand on domestic flights by providing more Colombian citizens the opportunity to use air transportation."

This is what is ridiculous about LAN's competitive argument. AIRES already does that, and way more than they will ever be able to offer.

Really? If you were familiar with LAN's LASER model, you would understand why your above statement makes absolutely no sense! AIRES does not use the LASER model that LAN uses on certain domestic flights! Also, AIRES fleet of a/c is hardly new, (higher operating costs). IIRC, 4C was recently viewed as an inefficient airline with a lousy OTP that charged certain pax for certain seats assignments; as well as charging pax for certain carry-on and checked baggage (Sports equipment, musical instruments and devices for babies, etc.). AIRES also charges for food on-board and for the use certain facilities and does not even offer special fares for groups. According to your own theory, AIRES has already accomplish this, thus LAN Colombia will never be able to offer low fares similar to those of AIRES? Regardless, AV/P5 will certainly have to drop their airfares in order to match those offered by LAN Colombia!


User currently offlineSumma767 From United Kingdom, joined Mar 2004, 2545 posts, RR: 6
Reply 11, posted (3 years 8 months 2 days 7 hours ago) and read 4619 times:

Quoting SCL767 (Reply 10):
Regardless, AV/P5 will certainly have to drop their airfares in order to match those offered by LAN Colombia!

You are clearly the one who does not understand. Yields have been thrashed already. LAN will not make them any worse.
It might make Aires's ops different, but fares by AV and P5 will not be any lower -and in fact they are expected to be higher than they have been for the last year-.

Perhaps you should benefit from hearing the opinions of CEO's such as Petro Heilbron on his quarterly conference calls. It would be healthy to blink away just every so often from the spell of LAN.


User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 12, posted (3 years 8 months 2 days 6 hours ago) and read 4551 times:
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Quoting Summa767 (Reply 11):
You are clearly the one who does not understand. Yields have been thrashed already. LAN will not make them any worse.

Domestic yields in the Colombian market have decreased dramatically since AV, P5 and 4C were fighting for market-share. However, in the medium term, LAN will expand the international network it inherited from AIRES and will utilize a mixed passenger-cargo model, (through its synergy with LANCO); which will increase its domestic yields, even if LAN offers cheaper fares than AV/P5. LAN will be profitable in the Colombian market; especially since LAN and TAM already link the two strongest economies in South America with the world and BOG serves as an excellent transit point for cargo from deep South America, (especially Brazil). LATAM will also be able to provide air-links between the Colombian market and their other respective markets in ways that AV/TA/CM/P5 could only dream of; especially via their respective domestic subsidiaries in Argentina, Brazil, Chile, Ecuador, Paraguay, and Peru.

Quoting Summa767 (Reply 11):
It might make Aires's ops different, but fares by AV and P5 will not be any lower -and in fact they are expected to be higher than they have been for the last year-.

Of course AV/P5 fares will increase, since both carriers needed to join the same alliance in order to maintain their dominance in the domestic market, almost creating a near monopoly in Colombia.

Quoting Summa767 (Reply 11):
Perhaps you should benefit from hearing the opinions of CEO's such as Petro Heilbron on his quarterly conference calls. It would be healthy to blink away just every so often from the spell of LAN.

It's commonly known that BOG, (and soon SAL and SJO) suffers from severe capacity constraints. But LAN uses a "multi-hub/multi-destination" method, which will be further enhanced once LAN and TAM combine and incorporate other carriers into LATAM Airlines Group.


User currently offlineRCS763AV From Colombia, joined Jun 2004, 4393 posts, RR: 12
Reply 13, posted (3 years 8 months 2 days 3 hours ago) and read 4423 times:

Quoting SCL767 (Reply 10):
Really? If you were familiar with LAN's LASER model, you would understand why your above statement makes absolutely no sense! AIRES does not use the LASER model that LAN uses on certain domestic flights! Also, AIRES fleet of a/c is hardly new, (higher operating costs

Im not going to go through this again, it's pointless.

Quoting SCL767 (Reply 12):
Of course AV/P5 fares will increase, since both carriers needed to join the same alliance in order to maintain their dominance in the domestic market, almost creating a near monopoly in Colombia.

Now that's something wrong for you the one who praises how LAN has established itself in Chile and Peru? Difference is they are still two different operators who will be competing against each other. Being in the same alliance hasn't stopped UA and US or TG and SQ from fierce competition.

Your arguments keep on getting weaker and weaker every time someome confronts youm be it here or on a new zealand aviation thread. Let's all try to position oirselves better in the discussion.

Quoting SCL767 (Reply 12):
Domestic yields in the Colombian market have decreased dramatically since AV, P5 and 4C were fighting for market-share. However, in the medium term, LAN will expand the international network it inherited from AIRES and will utilize a mixed passenger-cargo model, (through its synergy with LANCO); which will increase its domestic yields, even if LAN offers cheaper fares than AV/P5. LAN will be profitable in the Colombian market; especially since LAN and TAM already link the two strongest economies in South America with the world and BOG serves as an excellent transit point for cargo from deep South America, (especially Brazil). LATAM will also be able to provide air-links between the Colombian market and their other respective markets in ways that AV/TA/CM/P5 could only dream of; especially via their respective domestic subsidiaries in Argentina, Brazil, Chile, Ecuador, Paraguay, and Peru.

None of what you said above is contrary to the main argument: domestic fares won't be lower. LAN might be profitable at keeping them what they are, which almost is impossible given the added costs of flying in Colombia (fuel surcharge, insanley high landing fees, crap infraestructure producing delays) but whatever.



Les escribo desde el frío de mi verde altiplano.
User currently offlinebogota From Colombia, joined Sep 2004, 818 posts, RR: 1
Reply 14, posted (3 years 8 months 2 days 2 hours ago) and read 4315 times:

Quoting RCS763AV (Reply 13):
Difference is they are still two different operators who will be competing against each other. Being in the same alliance hasn't stopped UA and US or TG and SQ from fierce competition.

AV and P5 were far from real competitors in the last few years, they simply accomodated to the existing size of the market and charged us users fares that were far from competitive. Sad to see Aires disappear but glad to see giant LAN land in Colombia. I would hate to fall into the hands of the duopoly we had in the past.


User currently offlinetavong From Colombia, joined Jul 2001, 835 posts, RR: 4
Reply 15, posted (3 years 8 months 2 days 1 hour ago) and read 4248 times:

Quoting bogota (Reply 14):
AV and P5 were far from real competitors in the last few years, they simply accomodated to the existing size of the market and charged us users fares that were far from competitive. Sad to see Aires disappear but glad to see giant LAN land in Colombia. I would hate to fall into the hands of the duopoly we had in the past.

You really said this? P5 reduced capacity to increase load factors cause the competition from AV made them choose the E-190s instead of a bigger plane. P5 where always in the lower cost side but AV had better load factors even with their bigger planes. AV/P5 didn´t wanted to compete in fares but in service, 4C tried to make a heavy bet bringing the 73G and slashing fares to a ridiculous $1 point. But historically Colombia hasn´t been able to sustain three big carriers.

AV/P5/VX: Alianza Summa times, VX dies
AV/P5/West Caribbean : West dies.

AV/P5/4C: 4C dies (call it what you want, but 4C as a trademark died when LAN bougth them)


I really can´t say what would happen since the three groups are big enougth to make three strong airlines. maybe the market grow (i really hope so) but i really don´t think that this "duopoly" was a known decision by AV or P5 like you seem to post, but a "natural duopoly". Colombia can´t sustain three big airlines here. (Just my opinion)

Gus
SKBO



Colombian coffee, the best...take a cup and you will see how delicious it is.
User currently offlineSoAmSky From United States of America, joined Jan 2004, 310 posts, RR: 0
Reply 16, posted (3 years 8 months 1 day 22 hours ago) and read 4182 times:

It looks like some people in Colombia are traumatized about the so called "$1.00" fare from Aires. As somebody has already explained somewhere in one of these forums, the $1 pesos fare is a marketing gimmick, nothing new. Maybe they sell 2 seats for that price, but the rest of the plane flies with higher fares. I remember Three years ago Ryanair was advertising a zero fare (Yes!, "0", nada!!) in Spain, one would pay some fees that would amount for up to 50 euros, so it wasn't all that free. But, hey, Ryanair is still buying planes.

Again, one thing is the advertised fare, yet another issue is the final cost of the ticket which always includes a fuel surcharge the company keeps. I just checked, out of curiosity, an air fare from CTG to BOG, and in addition to the airfare, Aires and for that matter Avianca and Copa-Colombia have a fuel surcharge of $58,000.00 pesos.

IIRC this high fuel surcharge was imposed when oil peaked around $150 dollar/barrel. Though the surcharge might have come down a little bit, I'm pretty certain it did NOT come down proportionately to the current cost of oil.

Finally, some people here forget that Colombian currency has gained value against the dollar for quite a while; thus, giving airlines with domestic operations an advantage for the time being.

Regards



Soar the blue of the South American Sky
User currently offlineRCS763AV From Colombia, joined Jun 2004, 4393 posts, RR: 12
Reply 17, posted (3 years 8 months 1 day 21 hours ago) and read 4159 times:

Quoting bogota (Reply 14):
AV and P5 were far from real competitors in the last few years, they simply accomodated to the existing size of the market and charged us users fares that were far from competitive

Maybe in the 90s up to the Alianza Summa times. But this has changed. P5 is actively feeding CM's PTY hub which takes away AV's international passengers, and on the domestic side, they didin't hesitate to join the price wars.

Quoting tavong (Reply 15):
But historically Colombia hasn´t been able to sustain three big carriers.

Much larger market and much stronger players now.

Quoting tavong (Reply 15):
AV/P5/West Caribbean : West dies.

West was never the size of Aces or Aires, and they were a crap operation with poor financing (with rumours of money laundering) and abysmal safety standards. Not really a good comparison.

Quoting SoAmSky (Reply 16):
It looks like some people in Colombia are traumatized about the so called "$1.00" fare from Aires. As somebody has already explained somewhere in one of these forums, the $1 pesos fare is a marketing gimmick, nothing new. Maybe they sell 2 seats for that price, but the rest of the plane flies with higher fares. I remember Three years ago Ryanair was advertising a zero fare (Yes!, "0", nada!!) in Spain, one would pay some fees that would amount for up to 50 euros, so it wasn't all that free. But, hey, Ryanair is still buying planes.

It's not being traumatized. It's not only the 1 peso fares. AIRES effectively trashed domestic yields. AV and P5 were transporting 35% more domestic passengers and their revenue just didin't go up, not even by 5%.



Les escribo desde el frío de mi verde altiplano.
User currently offlinelaca773 From United States of America, joined Nov 2004, 4002 posts, RR: 2
Reply 18, posted (3 years 8 months 1 day 18 hours ago) and read 4100 times:
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I have a question. With AV being the obvious largest airline in Colombia at this time and with Aires having a much smaller share of the market, wouldn't it be a better option for LAN to buy a mix of A319 & A320s for their Colombian operation, actually, I'd say 13 A319s and 7A320s just for the fact, utilizing A320s constantly, is going to bring the yield down much more with the number of frequencies AV already operates in the domestic network. By deciding on more A319s, this of course will reduce capacity but will not lower their yields as much when you compare it to the A320. The A319 would also allow LAN Colombia to fly longer international segments where the A320 can't because of performance issues.

Also, is there a chance LAN might transfer some of their A318s to fly domestic routes in Colombia where the A319 is to big. If not, is there a possibility we'll see LAN purchase some E75/E90s for the smaller markets?


User currently offlineSCL767 From Chile, joined Feb 2006, 8752 posts, RR: 5
Reply 19, posted (3 years 8 months 1 day 17 hours ago) and read 4064 times:
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Quoting bogota (Reply 14):
I would hate to fall into the hands of the duopoly we had in the past.

Central America will fall into a virtual duopoly.

Quoting laca773 (Reply 18):
wouldn't it be a better option for LAN to buy a mix of A319 & A320s for their Colombian operation, actually, I'd say 13 A319s and 7A320s just for the fact, utilizing A320s constantly



Absolutely, next year LAN Airlines will receive 18 A320-family a/c, including the A319, A320, and the A321. Also, LAN will receive three new B763s. The company recently stated the it plans to incorporate 2 B787-816s into the fleet by Q4 next year. LAN will receive 70 A320-family a/c and 32 B787s during the next five years. As for AerOasis, they will utilize the A319s and A320s, (and possibly a few A321s). LAN stated that AerOasis will not follow the LASER model and will focus on premium traffic. LAN now has plans to transfer up to 10 A320-family a/c over to AerOasis, "fast". It is also possible that LAN may transfer a couple new B763s over to Colombia, and eventually over the next couple of years, the B787s.

Quoting laca773 (Reply 18):
Also, is there a chance LAN might transfer some of their A318s to fly domestic routes in Colombia where the A319 is to big. If not, is there a possibility we'll see LAN purchase some E75/E90s for the smaller markets?

LAN will phase out its fleet of 15 A318s by 2013. During the last four months, LA received 7 new A320s and a new B763. Five A318s will leave the fleet early next year. Three will stay in service with LAN Ecuador and the remaining 7 will remain based at SCL. They will be replaced by the A319/A320/A321 a/c.

[Edited 2010-11-30 01:21:29]

User currently offlinetavong From Colombia, joined Jul 2001, 835 posts, RR: 4
Reply 20, posted (3 years 8 months 1 day 16 hours ago) and read 3977 times:

Quoting RCS763AV (Reply 17):
Much larger market and much stronger players now.

I already know this, but i rally don´t know if a bigger market that grew only cause 4C ridiculous low fares. Has has been said for many times, fare will need to go a little up, and we still don´t know if this will drive the market down again.

Quoting RCS763AV (Reply 17):
West was never the size of Aces or Aires, and they were a crap operation with poor financing (with rumours of money laundering) and abysmal safety standards. Not really a good comparison.

Anyway Aces and West failed. my point was never to compare West with Aces, was to make a point that the market in Colombia can´t sustain three players.

Quoting laca773 (Reply 18):
A320s constantly, is going to bring the yield down much more with the number of frequencies AV already operates in the domestic network.

AV uses their A320 at 150 pax, i think this is for the hot and high operations at BOG, i Suppose LAN will use their A320 this way.

Quoting SCL767 (Reply 19):
Central America will fall into a virtual duopoly

Actually there is a duopoly.   No matter if they stay in the same alliance or not, TA/CM are a duopoly in Central-America.

Gus
SKBO



Colombian coffee, the best...take a cup and you will see how delicious it is.
User currently offlinebogota From Colombia, joined Sep 2004, 818 posts, RR: 1
Reply 21, posted (3 years 8 months 1 day 12 hours ago) and read 3888 times:

Quoting tavong (Reply 15):
You really said this? P5 reduced capacity to increase load factors cause the competition from AV made them choose the E-190s instead of a bigger plane. P5 where always in the lower cost side but AV had better load factors even with their bigger planes. AV/P5 didn´t wanted to compete in fares but in service, 4C tried to make a heavy bet bringing the 73G and slashing fares to a ridiculous $1 point. But historically Colombia hasn´t been able to sustain three big carriers.

Sizing down to increase load factors and mantain high yields is not exactly being competitive in the market. It might be of the interest of the pockets of the owners of P5 but far from the interest of aviation in Colombia. Two years ago we were paying 300 - 400 USD for domestic fares in economy, far from ridiculous. It took 4C to enter the market in the B737 to show them that the market is far larger, like it should be for a 45 million inhabitant nation. There are far too many markets in Colombia for the few and far too many analists protecting their pockets. Healthy economies have fierce competitors willing to be innovative and fight for customers and that was simply not happening in Colombia back then.

Quoting SoAmSky (Reply 16):
It looks like some people in Colombia are traumatized about the so called "$1.00" fare from Aires. As somebody has already explained somewhere in one of these forums, the $1 pesos fare is a marketing gimmick, nothing new. Maybe they sell 2 seats for that price, but the rest of the plane flies with higher fares. I remember Three years ago Ryanair was advertising a zero fare (Yes!, "0", nada!!) in Spain, one would pay some fees that would amount for up to 50 euros, so it wasn't all that free. But, hey, Ryanair is still buying planes.

In Colombia people are not traumatized, on the contrary people are incredibly happy with those fares. Numbers show it, airports are collapsing thanks to the high growth in the market. Aires lacked enough cash to sustain the market against AV and P5 levelling down to 4C in prices for long enough time until AV and P5 understood they had each enough market. Unfortunatelly they decided to go the easy way and kill the competitor in search for a more controlled market place in the long run. Sadly for the Aires brand but good for us the Colombian consumer, LA has decided to go for 4C and AV and P5 have now a very deep pocket competitor willing to keep a larger size Colombian market.

Quoting RCS763AV (Reply 17):
Maybe in the 90s up to the Alianza Summa times. But this has changed. P5 is actively feeding CM's PTY hub which takes away AV's international passengers, and on the domestic side, they didin't hesitate to join the price wars.

They only joined price wars once 4C slashed prices, before we consumers were at the mercy of some of the highest domestic fares on earth.

Quoting RCS763AV (Reply 17):
It's not being traumatized. It's not only the 1 peso fares. AIRES effectively trashed domestic yields. AV and P5 were transporting 35% more domestic passengers and their revenue just didin't go up, not even by 5%.

Somehow AV and P5 have managed to survive in a competitive market, how much they make is not really my problem. They are still making money, they are still transporting lots of Colombians and fortunatelly for the Colombian economy more business are being able to send their staff to create more business, more hotels are seing their rooms full thanks to many more consumers and many more international travellers are seeing that Colombia is a cheaper destination in the very competitive international tourist market.


User currently offlineRICARIZA From Colombia, joined Apr 2005, 2382 posts, RR: 26
Reply 22, posted (3 years 8 months 1 day 10 hours ago) and read 3824 times:

Quoting Summa767 (Reply 11):
It would be healthy to blink away just every so often from the spell of LAN.

Hehehehe... I agree..



I miss ACES, I am proud of AVIANCA & I am loyal to AMERICAN
User currently offlinetavong From Colombia, joined Jul 2001, 835 posts, RR: 4
Reply 23, posted (3 years 8 months 1 day 9 hours ago) and read 3778 times:

Quoting bogota (Reply 21):
Sizing down to increase load factors and mantain high yields is not exactly being competitive in the market. It might be of the interest of the pockets of the owners of P5 but far from the interest of aviation in Colombia. Two years ago we were paying 300 - 400 USD for domestic fares in economy, far from ridiculous

I agree that fares where high before, anyway, that was what P5/CM beleved that was the better way to fortify themselves. That gave a lot of market to AV, yes, but in their numbers until 4C decided to grow it worked. Anyway, has all the business, airlines want´s to grow up their interest, not the country´s ones. That´s reality, what is a real shame is that the airline that in their purpose was making air travel affordable to the Colombia points wuith little or no interest at all (satena) was left alone and trying to survive by itself while 90% of their routes are made at a loss. For AV/P5 the logic is that they need to grow their pockets. Like it or not, that´s the crue reality.

Quoting bogota (Reply 21):
Healthy economies have fierce competitors willing to be innovative and fight for customers and that was simply not happening in Colombia back then.

Colombia´s economy is far from "healthy". Our economy is geting better, but still is still very far from healthy.

Quoting bogota (Reply 21):
It took 4C to enter the market in the B737 to show them that the market is far larger, like it should be for a 45 million inhabitant nation.

4C is also ery far from shoing us that, IMHO they just showed us that operating at a loss can grow your market share but left you without revenues. It´s a embarrassment the US 35 million that LAN paid for 4C, that barely covers the cost of one of their planes. 4C´s plan from the beginning was to sell themselves at the best price possible ant they failed misserably with it. I´m glad LAN came since they really will teach them how an Airline should be driven. Appart of that, they only grew the market at a unhealthy level, has said before prices will go up again (no at pre 4C levels of course) but that will surley shrink the market.

Quoting bogota (Reply 21):
Somehow AV and P5 have managed to survive in a competitive market, how much they make is not really my problem.

It´s the analist and shereholder´s problem, has said before AV/P5/LAN want to make money, they care little about Colombia´s grow if they can still making money.

Anyway, has said before, interesting times came to Colombia.

Gus
SKBO



Colombian coffee, the best...take a cup and you will see how delicious it is.
User currently offlineSoAmSky From United States of America, joined Jan 2004, 310 posts, RR: 0
Reply 24, posted (3 years 8 months 1 day 8 hours ago) and read 3730 times:

Quoting bogota (Reply 21):

I fully agree with your post. The market in Colombia is very elastic and Aires showed how much people wanted to travel given a reasonable fare. Certainly, the market was stimulated, and the hole economy benefited as a consequence.

When I said some people were traumatized about the "$1.00" fare, I was just being sarcastic; because as you pointed out, few years ago when Avianca and Aerorepública were offering such as astronomical fares for domestic travel, I can't remember people complaining about it here in this forum, yet Aires comes with this "come and check me out fare" and then some people seem angry about it.

Quoting tavong (Reply 15):

Yes it has


LAN coming to Colombia is fantastic news for the air-travel industry. A new order in fares and services is going to be established in the country. LAN is a force to be reckoned with, and that is good news for the consumer!

Regards!



Soar the blue of the South American Sky
25 bogota : We absolutely agree that is the reality, that is why it is ridiculous to even imply that Colombia can not support 3 large competitors. When few compa
26 tavong : Don´t take me wrong, i´m not defendind high fares, in other forums i´ve already posted that i defend healthy fares. You accuse me of very short si
27 bogota : What would you consider healthy fare? I never said you were short sighted, I said AV and P5 were short sighted because they underestimated the capaci
28 bogota : Absolutely agree, complain if you do, complain if you don´t... something very common in these lattitudes. All I can say is my company increased by 5
29 RCS763AV : The high fares are also a cause of colombia's ridiculous tax on air travel. Even on 4C's famous $1 fares, your tickets wouldn't go for less than $120
30 jfk777 : Interesting times in Colombian skies, until now its always been Avianca and everyone else. Now its two equally financed airlines or perhaps Lan has mo
31 Bogota : Tax or no tax, fares were high because the lack of real competition, it really makes me wonder why there are so many of you people defending high far
32 SoAmSky : Agree! taxes on air travel are outrageous!!!; however, let me clarify something again, for the $1 fare in your example, out of the $120.000 cost the
33 LatinAviation : Forgive my ignorance in this, but what is the LASER model?
34 A388 : Good news and I hope to see LAN in Curacao soon!!! Aires used to fly to Curacao but the route was dropped... A388
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