hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

AZ Flying High In South America

Tue Feb 08, 2005 8:26 pm

AZ currently serves in LatAm the destinations of GRU, EZE and CCS with daily nonstop services.

GRU and EZE receive the B777-200 and CCS the B767-200/400. All destinations are served 5 x week from MXP and 2 x week from FCO.

Apart from AZ, direct flights LatAm-Italy are operated by RG (daily GIG-GRU-MXP, MD-11) and AR (EZE-FCO 4 x week, B747/A340). Argentina and Brazil have a substantial Italian community.

South America was one of the best performing markets for AZ in 2004. Could we see a possible AZ+AF/KL merger meaning that AZ would withdraw from these profitable destinations?

At least in South America AZ is flying high:


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matt777
Posts: 476
Joined: Wed Oct 24, 2001 8:55 am

RE: AZ Flying High In South America

Tue Feb 08, 2005 9:05 pm

"Argentina ... an substantial Italian community."
~50% of the population... That's why there is a large quantity of Visiting Friends and Relatives pax to/from Buenos Aires.

I'm one of them that takes the 14 hour flight down south once every year. Absolutely nothing to complain about. Premium video-on-demand IFE systems, excellent italian food, warm F/A.

A nice feature one the EZE-Italy is that after take-off, hot dinner is served at 8pm italian time, then four hous later at 8pm argentine time a full cold dinner is served for the argentines or for the ones that want som'more.  Big thumbs up
Breakfast before the early arrival. At the back of the plane, there's the Open Bar with all kind of snacks and drinks. For sure the AZ 777 is an excellent product.

ITA-CCS is served with the 767-300ER.

AZ most profitable intercontinental routes are the MXP-JFK, NRT and EZE; flights are full all year long, with significant Magnifica loads also during low seasons. With the introduction of some new India routes, Alitalia has eaten a large piece of the USA-India market via the MXP hub.

Ciao
 
Avianca
Posts: 5274
Joined: Tue Jan 25, 2005 5:33 am

RE: AZ Flying High In South America

Tue Feb 08, 2005 9:41 pm

it is time that AZ reinstall the flights to BOG! they should install in first step a 3/7 operation from MXP. But who knows what the future will bring for AZ and there bad financial situation.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
hardiwv
Posts: 4341
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RE: AZ Flying High In South America

Tue Feb 08, 2005 9:54 pm

Matt777:

AZ now has its LatAm office in Sao Paulo. AZ's load factor to GRU in 2004 was 92%, which is extremely high. There were even rumours that AZ would increase flights to GRU from 7 to 10 x week, any information?

Also agree with you that AZ product to EZE and GRU is very good, and Magnifica (although not flat-seat) is of top quality.

However, with a possible merger AZ+AF/KL, the following destinations would overlap:

GRU: AF B777 and KL B777 and AZ B777
EZE: AF B747 and AZ B777
CCS: AF B747 and AZ B763

Any conditions they would split the market?

Rgs,
 
Avianca
Posts: 5274
Joined: Tue Jan 25, 2005 5:33 am

RE: AZ Flying High In South America

Tue Feb 08, 2005 10:28 pm

why should the split the market? all these destinations are performing very well for AF/AZ/KL.

KL pulled out from EZE and CCS market some time ago and left the terain to AF.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
Namaskar
Posts: 52
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RE: AZ Flying High In South America

Tue Feb 08, 2005 10:30 pm

Hardiwv,

Why would they have to split the market? I think the 3X daily into GRU solidifies their presence in the huge EU-Brazil market and helps them to seve the different regions of Europe/onward destinations effectively. Independent of an alliance, it seems AZ can sustain the GRU and EZE markets very well on its own.

Might be a bit of apples and pears, but *Alliance has SK, LH, OS and NH all serving NRT - no splitting there. The market can sustain all of them.
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:02 pm

Independent of an alliance, it seems AZ can sustain the GRU and EZE markets very well on its own.

Indeed, but I'm not speaking of an Alliance; I am referring to AF/KL/AZ as one merged airline. For example, it has been known that AF wanted KL to pull out of GRU so that AF could serve GRU with two daily flights. KL already pulled out of CCS, GIG and EZE leaving the market for AF.

And alliances can also split markets, about the same what IB and BA are doing in South America.

I think the 3X daily into GRU solidifies their presence in the huge EU-Brazil market

Indeed, it seems that GRU is consolidating its strong position in the market, receiving flight from almost all major European airlines. From what I can recall the last European carriers to pull out of GRU were Sabena (?) and SAS (in 1991/92, now codesharing with RG).

Rgs,
 
luisde8cd
Posts: 2444
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RE: AZ Flying High In South America

Tue Feb 08, 2005 11:34 pm

No way AZ would drop CCS. There's such a HUGE italian community here in Venezuela. Around 30% of my friends hold dual Italian-Venezuelan citizenship, that a huge example of the amount of Italians in this country.
 
Avianca
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RE: AZ Flying High In South America

Tue Feb 08, 2005 11:38 pm

also Venezuela is very common touristic destination for Italians.
I think in long terme AZ will increase the flight to a B.777
Colombia es el Mundo Y el Mundo es Colombia
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:42 pm

no way AZ would drop CCS. There's such a HUGE italian community here in Venezuela

Not so sure. This type of traffic is very low-yield, exactly what airlines are running away.
 
Pe@rson
Posts: 16015
Joined: Sat Jan 13, 2001 6:29 pm

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:45 pm

But on a website I just looked on a return fare to CCS - in the low-season - non-stop with AZ from MXP was over £500. In the high-season, it showed as, again non-stop with AZ from MXP, as over £650. Hardly "low-yield" !!!

On AZ's website, the low-season one was 766 EUR and the high-season was 1438 EUR, both including tax and based on a week's stay.

[Edited 2005-02-08 15:48:19]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
Alitalia744
Posts: 3777
Joined: Thu Mar 30, 2000 8:22 am

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:46 pm

even with the tie-up, AZ won't pull from GRU especially. its one of their top markets along with EZE, NRT and JFK as someone pointed out. Plus, there's enough traffic to sustain daily flights from CDG and MXP if needed.

-g
Some see lines, others see between the lines.
 
Avianca
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RE: AZ Flying High In South America

Tue Feb 08, 2005 11:47 pm

there is no one destination in south america that is really low-yield.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:54 pm

there is no one destination in south america that is really low-yield.

WHAT?????????

There are many low-yield destinations in South America, depending on markets and airlines serving the specific markets.

If all markets in South America were high-yield they would have the traffic that GRU and EZE have. Look at the pull out of BA from CCS and BOG, or KL in CCS. If yields are high, the destination can sustain various airlines, e.g. GRU and EZE, with their top product, e.g. B777.

 
AA767400
Posts: 1892
Joined: Tue Jan 23, 2001 2:04 am

RE: AZ Flying High In South America

Tue Feb 08, 2005 11:55 pm

AZ does not have a 762, or 764. They only have the 763, along with their 772,M11,S80, and A319,320,321.

AZ, will not drop GRU, or EZE, because most people are terminating in Italy. Making them take AF, to CDG will not make any sense, unless it is low-yield.

CCS, if anything would be the one to go if any would go. CCS, has a good amount of not just Italians, but Portuguese, and Spanish as well.
"The low fares airline."
 
Avianca
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RE: AZ Flying High In South America

Wed Feb 09, 2005 12:02 am

Ticket prices to CCS and BOG started from Europe beginning with 500 Euro for some very cheap tickets in very low season. Normal the cheaper Eco tickets beginn with 700 Euro return, is this really low-yield? you receive tickets from europe to the US-West coast what is a similar range to north southamerica beginning with 400 Euro.

For sure CCS and BOG are not the biggist markets for First-Class but this routes have good loadfactors in BuisnessClass on all carriers.

KL pulled out from CCS, but owner AF increased the service too daily B747-400!

And EZE loosed carriers in the last years, (LX, KL) Price nivel is little bit higher than to North Southamerica, ok but the way to Argentina is some thousend kilometers more than to Colombia or Venezuela.

regards
Avianca
regards
Avianca

[Edited 2005-02-08 16:10:52]

[Edited 2005-02-08 16:11:47]
Colombia es el Mundo Y el Mundo es Colombia
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Wed Feb 09, 2005 12:41 am

KL pulled out from CCS, but owner AF increased the service too daily B747-400!

But this still represents a reduction in total capacity of about 30-40%.

And add to that the pull out of BA.

And EZE loosed carriers in the last years, (LX, KL) Price nivel is little bit higher than to North Southamerica, ok but the way to Argentina is some thousend kilometers more than to Colombia or Venezuela

You cannot compare EZE and CCS. EZE is way more attractive and high-yield market. Indeed, LX and KL pulled out of EZE, but KL still operates there with partner JJ.

LH flies daily to EZE, CCS does not get daily fligihts;
AZ operates the B777 in EZE, CCS only gets the B767;
IB has two daily flights to EZE, CCS only one;
BA still remains strong in EZE; and pulled out of CCS;

And you have to add the flights of AR to Europe: MAD, FCO and LGW and MUC.

Ticket prices to CCS and BOG started from Europe beginning with 500 Euro for some very cheap tickets in very low season. Normal the cheaper Eco tickets beginn with 700 Euro return

In high yield and intensity market you get extremelly cheap economy tickets, e.g. to MEX, GRU and EZE; simply because airlies have their business/first class full. Again, instead of comparing a EUR500 x EUR700 economy ticket, compare the fares and number of seats available on Business/First + cargo movement. E.g. KL's charges about EUR1,000 on economy for LIM (no competition = higher prices).

Rgs,
edit: typos

[Edited 2005-02-08 16:43:50]
 
luisde8cd
Posts: 2444
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RE: AZ Flying High In South America

Wed Feb 09, 2005 12:50 am

You cannot compare EZE and CCS. EZE is way more attractive and high-yield market. Indeed, LX and KL pulled out of EZE, but KL still operates there with partner JJ.

Of course... Buenos Aires has a population of 13.5 million and Caracas only has 4.7 million.

If you consider that Buenos Aires is 3 times larger than CCS, Buenos Aires is completely underserved compared to CCS. Or CCS is overserved compared to Buenos Aires  Smile.

I think CCS is extremely well served considering that it is a small city compared to other Latin American cities like MEX, GRU and BUE.
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Wed Feb 09, 2005 12:58 am

Of course... Buenos Aires has a population of 13.5 million and Caracas only has 4.7 million

Nothing to do with population, but with BUSINESS, high-yielding, traffic. I'm sure you're aware that in the past CCS had more flights than now; it relates somehow to the business environment.

CCS still attracts more Europen flights than other bigger destinations in LatAm (e.g. BOG, LIM, GIG) because it has a strong oil-business, which generates a high-yielding demand.

EZE, MEX and GRU are all important business center, and it happens that they have a big population as well. Otherwise airlines would not be flying to AMS, SIA or DXB. And look how many flights LOS gets?

Rgs,
 
Avianca
Posts: 5274
Joined: Tue Jan 25, 2005 5:33 am

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:00 am

there is no matter that EZE is a stronger market than CCS or BOG, but these two destinations are not generally low yield.

EZE, CCS does not get daily fligihts;>

yes but CCS is a nonstop and single destination, and eze is linked in the moment with SCL and will get in future a 1stop flight via GRU.


EZE, CCS only gets the B767;>

Argentina is very strong market for Italy, as so much Argentinias has Italian blood, and I don´t think a B767-300 can operate MXP or FCO to EZE nonstop without weight restrictions


AR to Europe: MAD, FCO and LGW and MUC.>

they fly only direct to MAD, all other destinations are flown with Air Plus metall from MAD, it seems that AR can not fill up the B.747 only with spanish-argentinian market.


EZE, CCS only one;>
but CCS receive flights from a second spanish carrier AirEurope.


And for Brazil, it is totally normal that the biggist City of South America and the industrial capital of Brazil with 1000ends of company headquarter can support more flights than BOG or CCS. Please compare these markets regarding the population and you will see that Colombia and Venzuela support a lot of flights for relativ small countries.

regards
Avianca




Colombia es el Mundo Y el Mundo es Colombia
 
BestWestern
Posts: 7068
Joined: Fri Sep 08, 2000 8:46 pm

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:01 am

Not one AZ intercontinental route makes money.
You are 100 times more likely to catch a cold on a flight than an average person!
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:02 am

AR fly only direct to MAD, all other destinations are flown with Air Plus metall from MAD

AR flies direct nostop to FCO (B747/A340).

Rgs,
 
luisde8cd
Posts: 2444
Joined: Thu Aug 12, 2004 12:02 am

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:13 am

Nothing to do with population, but with BUSINESS, high-yielding, traffic. I'm sure you're aware that in the past CCS had more flights than now; it relates somehow to the business environment.

Come on Hardi, you are a great contributor to this forum. You are smart, you know population is a key element. You'll have more businesses in a 13 million city than in a 4.5 million city. If it were for the oil, then Maracaibo would be getting all Venezuelan international flights. Maracaibo is Venezuela's oil capital. It's a mix of both business and population, and it's nonsense to say that population has nothing to do.

And for Brazil, it is totally normal that the biggist City of South America and the industrial capital of Brazil with 1000ends of company headquarter can support more flights than BOG or CCS. Please compare these markets regarding the population and you will see that Colombia and Venzuela support a lot of flights for relativ small countries.

Couldn't agree more with you. I also believe that if it wasn't for BOG's high altitude, they would be getting more long haul flights.
 
Avianca
Posts: 5274
Joined: Tue Jan 25, 2005 5:33 am

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:13 am

Hardiwv, you are right.

AR flies to FCO


Vuelo Salida Llegada Escalas /
Tipo de avión Duración Días operativos
Aerolineas Argentinas
AR 1140 Ministro Pistarini (EZE), Buenos Aires, Buenos Aires, Argentina 23:30
Fiumicino (FCO), Roma, Italia
Terminal C 16:00+1 día(s)
Sin escalas
744 12'30 Domingo

Aerolineas Argentinas
AR 1140 Ministro Pistarini (EZE), Buenos Aires, Buenos Aires, Argentina 23:30
Fiumicino (FCO), Roma, Italia
Terminal C 16:40+1 día(s)
Sin escalas
340 13'10 Lunes
Miércoles
Sábado

once per week with B744 and 3 times per week with A342

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
donder10
Posts: 6944
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RE: AZ Flying High In South America

Wed Feb 09, 2005 1:24 am

AZ most profitable intercontinental routes are the MXP-JFK, NRT and EZE; flights are full all year long, with significant Magnifica loads also during low seasons

Alitalita said a while back that no areas of their flights operations were making money!I'm sure they could be profitable on some long-haul routes if they could take an axe to costs but right now they are not making money on any!
 
Avianca
Posts: 5274
Joined: Tue Jan 25, 2005 5:33 am

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:37 am

BOG's high altitude, they would be getting more long haul flights.>

BOG has a high altitude but is not so dramatic. AV supported nonstops with full loaded B767, LH with full loaded A340 and B744 to FRA, also the rest of the flights to Europe are nonstop, and they are normally not weightrestricted.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
Marambio
Posts: 1145
Joined: Wed Oct 13, 2004 9:41 am

RE: AZ Flying High In South America

Wed Feb 09, 2005 1:37 am

Avianca,

they fly only direct to MAD, all other destinations are flown with Air Plus metall from MAD, it seems that AR can not fill up the B.747 only with spanish-argentinian market.

Exactly, AR can't fill one but TWO daily B747-400s to Madrid.

What AR clearly knows is that a whole 747 would be way too much for markets such as Paris, London, Munich or Zurich. That's why they created this mini-hub at Madrid. Through it, Aerolíneas serves a bunch of destinations that would be impossible to serve should they fly with their big aircraft.

Regarding the Air Plus agreement, as mentioned in another thread, whether the aircraft is A7's or not, it has nothing to do. It is somewhat a wet-lease from Aerolíneas - AR crew, AR flight number and AR is the only one to sell tickets for those flights. Air Plus has absolutely nothing to do with the flight, except that they are the owners of the aircraft and that they put the pilots (Argentinian pilots cannot fly a Spain-registered aircraft). It is just like Avianca right now, that has leased a 757 from Icelandair - would you say it is FI that operates those flights? Of course not, it is Avianca! Icelandair simply is the owner of the aircraft, which has been leased to Avianca.

It really makes me angry when people talk without knowing anything about the topic...

You cannot compare EZE and CCS. EZE is way more attractive and high-yield market. Indeed, LX and KL pulled out of EZE, but KL still operates there with partner JJ.

LH flies daily to EZE, CCS does not get daily flights;
AZ operates the B777 in EZE, CCS only gets the B767;
IB has two daily flights to EZE, CCS only one;
BA still remains strong in EZE; and pulled out of CCS;

And you have to add the flights of AR to Europe: MAD, FCO and LGW and MUC.


With the LH 744 switch, EZE will be getting more daily seats that it currently gets with the A346, as a big percentage of tickets will be reserved for EZE sales only.

AR flies in Europe to:
  • Madrid

  • Rome Fiumicino

  • London Gatwick via MAD

  • Paris Charles de Gaulle via MAD

  • Zurich via MAD

  • Munich via MAD


  • They also offer a respectable amount of destinations through codeshares with Air Plus Comet and ticket-selling agreements Spanair, BMI and Air One Italy.

    A4 also flies to Madrid with their "brand new" 742. Other destinations in Europe are served through a codeshare agreement with Air Europa.

    Saludos,
    Marambio

    Edit- Typos

    [Edited 2005-02-08 17:44:10]
    Aerolíneas Argentinas - La Argentina que levanta vuelo
     
    Avianca
    Posts: 5274
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 1:58 am

    >It really makes me angry when people talk without knowing anything about the topic<

    with all respect to you, but I don´t think you can rate my knowledge about aviation in south america.

    I never mentioned that Air PLUS sells tickets for the MUC, LGW flights, I just posted that the flights are operated with AIR PLUS metall and not more.

    I confirmed before that EZE is not a small market, but please also accept that Venezuela and Colombia is not this low-yield market what was mentioned before in this topic.

    regards
    Avianca

    [Edited 2005-02-08 18:06:54]
    Colombia es el Mundo Y el Mundo es Colombia
     
    baw716
    Posts: 1460
    Joined: Thu Nov 20, 2003 7:02 pm

    RE: AZ Flying High In South America

    Wed Feb 09, 2005 2:35 am

    As an ex Alitalia manager (Northern California 1998-2002), I may be able to offer some perspective on this matter.

    In South America, there is a disproportionately high percentage of Italians living there, especially in the deep south, Brazil and Argentina to be specific. Venezuela also has a strong local Italian home market. However, this is not the sole reason that Alitalia flies between these markets. There is a good amount of commerce that is done between South America and Italy (again predominantly from the deep south) and so those two factors, as well as the fact that for the wealthier Italians, Brazil is a particularly interesting tourist destination, as is Argentina. Even though Venezuela is a solid tourist destination, Venezuela is more VFR traffic (visit friends and relatives) traffic than pure "vacation" traffic. However, no matter, the fares are still quite high.

    Now with regard to the fares, there is this "low fare, high fare" argument going back and forth on this thread. I have not examined the fares, but if what Pe@arson is saying is correct, these fares are hardly low yield. I have not looked at them closely to comment on the yield. However, I will say this. The fares to the deep south in Magnifica are quite high and if the loads are quite high in both cabins, then the flights will make money. Also remember, the 777 can lift quite a lot of cargo as well and if there is a good cargo market between the two points, then there is no reason to believe that the flights are not doing well.

    Caracas is another matter. While Caracas does have relatively high fares and high loads, it is impaired by the fact that the 767 cannot carry large cargo. Therefore, its revenue base must come principally from passenger revenue. The economics of the 767 are good enough, but if the Caracas market is seasonal (and since I don't know enough about it I can't comment on it), then there might be problems with its profitability.

    So a couple of questions about Caracas if anyone can answer them:
    1. Is Caracas traffic seasonal, e,g. are the flights consistenly full year round, or are there periods when the flights go empty and if there are, what periods and what directions?
    2. If there are low fare periods, do they match up with the periods when the flights are empty as in question number 1?
    3. What percentage of traffic originates in Italy, what percentage of traffic originates in Caracas and potentially other points around Caracas that would connect to the AZ flight?

    Give me these three answers and I can give you an educated answer as to the situation regarding the profitability of the flight. How can I do this? Simple. I had an AZ operation in SFO and I faced the same problem that I think Caracas faces now. Large home Italian market, long haul (over 10 hours) with 767, restricted cargo, no beyond traffic to carry (local beyond SFO), not enough beyond MXP traffic originating SFO, etc. etc. and a problem with seat allocation during certain times of the year.

    If the flight is full all year to Caracas and AZ is rejecting demand, there may be an argument made to upgauge the aircraft to a 777. The 777 doesn't burn that much more gas for the distance than a 767 and can carry almost 50% more payload. The seat costs would be lower and there would be an opportunity to grow the market....IF the market could support it. However, that is something I am not sure I can say right now....I would need the answers to my questions. If someone could answer them, I'd be able to give at least an educated guess.

    Lastly, a question for Best Western: You said that not one AZ intercontinental market makes money: This is a very sweeping statement. How do you know this? Please explain, because I have information that may contradict your statement...so I would appreciate knowing the source for your statement.

    AZs financial situation stems years of confrontational labor relations and a poor management orientation toward the changes in the airline industry in the last 30 years. The Italians are getting their arms around the problems at AZ and are making an honest effort at changing them.

    For the record, AF and KL are operating as separate brands although they are one company. I believe should AZ join that group that it will retain its own branding and the three units, operating as one will retain their unique brands. This would be the one true example of what Europe was trying to achieve: A common economic unity without losing the identities of its members.
    Let's hope that AZ can put its house in order so that it can join AF/KL and become a part of this much larger force.

    baw716
    David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
     
    Marambio
    Posts: 1145
    Joined: Wed Oct 13, 2004 9:41 am

    RE: AZ Flying High In South America

    Wed Feb 09, 2005 2:55 am

    Avianca,

    with all respect to you, but I don´t think you can rate my knowledge about aviation in south america.

    I cannot rate your knowledge about South American aviation, but I believe you are not very much into the Aerolíneas Argentinas network. The thing that annoyed me was that you talked about it as if you were an AR insider, which I bet you are not.

    I never mentioned that Air PLUS sells tickets for the MUC, LGW flights, I just posted that the flights are operated with AIR PLUS metall and not more.

    Indeed they are, but I see no problem on that. The aircraft is somewhat wet-leased from Air Plus, so it is up to AR to arrange everything from the schedule to the ticket prices and the meals to be served. The agreement with Air Plus only includes the pilots for self-explained reasons (Argentine pilots cannot fly Spain-registered aircraft).

    By this, AR can offer to its passengers service to destinations that are not enough for a full Jumbo or A342, but still some people fly there. "The broader network, the better", I believe we could say from a passenger point of view. And that is exactly what Aerolíneas Argentinas is trying to do.

    I confirmed before that EZE is not a small market, but please also accept that Venezuela and Colombia is not this low-yield market what was mentioned before in this topic.

    I lack of information regarding yields in Colombia and Venezuela, therefore I will remain aside from that part of the topic until somebody posts some real figures.

    Saludos,
    Marambio
    Aerolíneas Argentinas - La Argentina que levanta vuelo
     
    hardiwv
    Posts: 4341
    Joined: Sat Oct 09, 2004 11:30 pm

    RE: AZ Flying High In South America

    Wed Feb 09, 2005 4:19 am

    BAW716:

    Thank you very much for your very interesting insights on AZ. It was a pleasure reading your comments on AZ.

    I dont have information on AZ performance in CCS, therefore, I cannot answer you question. Maybe one of our Venezuelan friends.

    I also think that if AZ replaces the B777 with the B767 on the route to CCS, some destination would have to get downgraded. So the analysis would have to be seen in perspective. Which destination, at the present moment, could be downgraded in AZ's network? Would CCS generate more yields if compared to this destination? Or is AZ getting more B777s on its fleet soon?

    What you mentioned about the high-yield tourist traffic Italy-Brazil is correct and reflected on weekly Lauda Air A330 flight to Northeast Brazil: MXP-REC-MCZ. Your point about trade is also right, look at FIAT and Telecom Italia, for example. As for the population, it is enough to say that there are 25 million Italians and descendents in Brazil alone, and I'm sure the number is as significant or more in Argentina.

    Another unrelated question: I am curious to know how is AZ performing on its daily flight MXP-BOM with the 767?

    Rgs,
    edit: typos

    [Edited 2005-02-08 20:25:39]
     
    Southamerica
    Posts: 2302
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:06 am

    EZE: AF B747

    Hardi, EZE has yet to see an AF 747 in the near future. It's an all-777 operation.



    There is no one destination in south america that is really low-yield.

    This has to be one of the most baseless/senseless statements I've ever read here. Many markets, many airlines, many different situations, it is impossible to generalize in such ways.



    SOUTHAMERICA
     
    Avianca
    Posts: 5274
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:10 am

    Southamerica, ok please let me know what destination is really low-yield.
    compared to the average salary and costs ticket prices all over the continent high priced for all routes.

    There is no low-yield destination from europe!

    waiting your suggestions.

    [Edited 2005-02-08 22:15:30]

    [Edited 2005-02-08 22:27:24]
    Colombia es el Mundo Y el Mundo es Colombia
     
    Southamerica
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:29 am

    Please let me know what destination is really low-yield.

    Again, so many different situations, different operative costs for each market, diverse types of passenger traffic, and not the dual categorization scheme you might have in mind.

    Among them, evident comparisons clearly stand out and might give you a general idea. GRU and EZE have been reported as high-yielding destinations by several airlines, upon which SCL and GIG, for example, stand as weaker passenger yield-wise. Hence you see different airlines using their top-notch product to these cities [GRU/EZE], being the best known case AA, who send their three-class configured 777s only to EZE and GRU, in South America. SCL and GIG, on the other hand, receive the two-class 763s, oriented better towards lower-yielding/low-premium-passenger-generating routes. However, SCL has had traditionally stronger cargo-yields.

    BOG is more leisure-oriented in AF's case, another example; hence the use of the two-class A343 [configured in Business and Economy only] given the airline's configuration to extract yields; while the 777s, aimed towards better performer destinations, are the ones used, again, to EZE and GRU. BA is limited now to higher-yielding destinations, so the markets they've got left in South America might give you an idea of cities capable of generating high-yielding premium traffic.

    Colombia is not particularly known by generating high amounts of high-yielding premium traffic, but, for example, the Colombia-United States traffic, although being fully-VFR, is extremely high-yielding, and not low-yielding as VFR traffic tends to be.

    Once again, just too many cases, situations, airlines and markets to classify under two big groupes without further specifications much less pretending to generalize as you did.




    SOUTHAMERICA
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:44 am

    SOUTHAMERICA, thank you for the detailed reply.
    And for sure it is not possible to generalize all, but it is fact and not a pretending from my side that the continent South America is not a low yield market.

    The situation is not as for example in some destination in asia, where you will find allot destinations with very low-yield economic and premimum class fares.

    Cargo Rates and ticket prices let all airlines achieving high yields on your mentioned routes.

    Avianca
    Colombia es el Mundo Y el Mundo es Colombia
     
    Southamerica
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:51 am

    The situation is not as for example in some destination in asia, where you will find allot destinations with very low-yield economic and premimum class fares.


    But in contrast, you find among the highest-yielding/premium-traffic-generator cities, precisely, in Asia, and also Africa.



    -----------------------


    Just for the record and before someone quotes me, I forgot to mention that AA also uses the 777 regularly to GIG, but with a stop-over in GRU and not from MIA as in GRU and EZE's cases, but from JFK. Still my point remains valid.



    SOUTHAMERICA




     
    Noise
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:54 am

    How many people of Italian origin are there in South America?
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 6:58 am

    >But in contrast, you find among the highest-yielding/premium-traffic-generator cities, precisely, in Asia, and also Africa<

    yes you are totally correct with this. because this I never posted that South America has the highest yielding routes in the world, but still high yielding what in totally is a fact.

    regards
    Avianca
    Colombia es el Mundo Y el Mundo es Colombia
     
    hardiwv
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 7:25 am

    How many people of Italian origin are there in South America?

    In Brazil there are 25 millions. In Argentina about 50% of the population is of Italian origin, around 15 millions. Uruguay and Venezuela also have Italian population.

    Here is a basic link in Spanish:

    http://www.italy-news.net/Editoriali/los_italolatinoamericanos.htm

    Again, so many different situations, different operative costs for each market, diverse types of passenger traffic, and not the dual categorization scheme you might have in mind.

    I completely second your opinion. The comparision GRU x GIG is classical. One represents a higher-yielding market, the other a lower-yielding tourist-oriented market.

    As you also mentioned, the Europe-LatAm market has one profile, and the US-LatAm a different one. BOG is one example, with stronger performance and yielding in the US routes as compared to the European routes.

    Rgs,
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 7:41 am

    >I completely second your opinion. The comparision GRU x GIG is classical. One represents a higher-yielding market, the other a lower-yielding tourist-oriented market.<

    please compare the fares, fares are from europe allmost the same for both destinations.

    Best example is AF, they are happy with the Jumbo flight from CDG to GIG.
    There is a big demand for premimum cabin, allone the Oil industry has the damand too fill up these seats (for sure not if all eurepeans would beginn flights to GIG). Also the economic section is not really low-yield, Rio (Brazil) is not the pleace for a cheap vacations for europeans.

    The south america routes have a healty yieldmix.

    The cheap vacation you will find maybe in parts of the domenican rebublic, and of course these routes operated by the european charter carriers are low-yield.

    regards
    Avianca

    [Edited 2005-02-08 23:46:11]
    Colombia es el Mundo Y el Mundo es Colombia
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 8:04 am

    checked for following destinations (CCS, BOG, EZE, GRU, GIG) business class fares for the random date 23.03.2005 to 30.03.2005 from FRA. (fares on travel-jungle.de)

    cheapest:

    CCS: IB for 2268,77 Euro
    BOG: IB for 2820,72 Euro
    EZE: AZ for 1752,00 Euro
    GRU: AZ for 1775.00 Euro
    GIG: TP for 2700,77 Euro

    If we calculate the average for these destinations with all puplished fares and all transfer pax with all airlines you will get for all destinations (for sure less all the costs) nearly the same yield.

    regards
    Avianca




    [Edited 2005-02-09 00:12:53]
    Colombia es el Mundo Y el Mundo es Colombia
     
    hardiwv
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 8:20 am

    with all airlines you will get for all destinations (for sure less all the costs) nearly the same yield.

    This is exactly how someone should not calculate yields...did you take into account the total number of seats available on business? Is first class available? what's the loads of cargo? etc, etc, etc...why you selected IB for BOG and CCS and not for GRU, GIG and EZE?

    For example, if you fly AMS-GRU with KL on business you pay EUR4,000, however, if you fly FCO-AMS-GRU with KL you pay EUR2,900....it's not so simple....

    Yields are NOT calculated this way....




     
    Chiguire
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 8:23 am

    LH flies daily to EZE, CCS does not get daily fligihts
    CCS does very well get daily flights from LH: starting March 30 !

    And I don't consider CCS as a low-yield market for AZ. The difference to LH is, that most of their passengers travel to Venezuela and not to the countries "beyond" e.g. Ecuador and Peru. This is the "problem" LH and also BA were facing. In order to remain competitive towards IB and AF they both have to absorb the prorate from AV, VH or TA - at least parcially.
    This causes problems in the point-to-point yield to CCS.

    In the past we have seen some positive developments in CCS, such as AF going first daily then changing to 744. LH now finally going daily as well. We lost three weekly BA shared with BOG and four KL frequencies.
    In future I see, apart of maybe Conviasa starting their Europe services, AZ upgrade to T7 and LH starting MUC (just to be faster than Conviasa). TP might increase the number of frequencies as well.
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 8:37 am

    for sure I am not calculate all exactly what is also not so easy, you mentioned all necessary information Hardivw.

    I took for every destination the cheapest offer, and I didn´t used the homemarket carrier because they are always the most expensive carriers for the nonstop service. (It seems that CCS is so gook booked on AZ that they don´t need to offer these cheap fares in premium cabin)

    If you compare the full fare tickets, they have different prices of about 1000 Euros between North and South SouthAmerica, but flights are longer what means more fuel and less cargo.

    I am very well informed about the cargoloads and the cargo rate situation on the south america routes.

    I am also aware what was befor mentioned from my side that the Brazil and Argentinia market is more high yielding than Colombia and Venezuela, but it is totally wrong that Colombia and Venezuela are low-yielding markets.

    regards
    Avianca



    Colombia es el Mundo Y el Mundo es Colombia
     
    RCS763AV
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 8:59 am

    BOG is not a high-yielder, but neither a touristic city. The yields are decent b/c Y fares are kinda expensive, planes go decently full, and SOME seats in biz get filled (maybe 40-50%). But the yields sometimes are not enough good to justify an operation. Of course BOG and CCS are not CUN and NAS, but neither are ZRH and NRT. As AZ is in such a situation, maybe they dont wanna risk anything, as this kinds of markets are very unpredictable.

    [Edited 2005-02-09 01:11:18]
     
    luisde8cd
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 9:14 am

    Just to give you an idea. AZ used to send the B742 to CCS, then it was replaced by a MD-11 and then came the B763.But the MD11 and 742 flights weren't daily.

    LH operated the B744 to CCS during the December high season. So maybe in the near future the CCS flight might get upgraded to B744. During August 2004, CCS was LH's highest loaded flight. Loads reached an average of 98.5% during the whole month. I know loads alone don't make the flight profitable, but it's a good sign.
     
    Noise
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 10:06 am

    Sweet Jesus...why are there so many Italians in Latin America? When did they immigrate there...and why? Do they still speak the language?
     
    Avianca
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 10:12 am

    same reason why english, german, chinese or italiens immigrated to the United States or Canada. Just a better life.

    I know from a friend that in Venezuela are still colones of Italiens who speaks eatch other still Italien. The Argentianian spanish remind often too the Italien language...

    regards
    Avianca
    Colombia es el Mundo Y el Mundo es Colombia
     
    luisde8cd
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 10:17 am

    I know from a friend that in Venezuela are still colones of Italiens who speaks eatch other still Italien.

    That's true. Also, whenever the Italian national football team wins, crowds flood some streets to celebrate as it were Milan or Rome.
     
    Derico
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    RE: AZ Flying High In South America

    Wed Feb 09, 2005 10:20 am

    Quote by Luisde8cd #17:

    "...I think CCS is extremely well served considering that it is a small city compared to other Latin American cities like MEX, GRU and BUE..."



    Can someone please tell me how to get to BUE airport from EZE or AEP?????

    Quote by Noise #46:

    "...Sweet Jesus...why are there so many Italians in Latin America? When did they immigrate there...and why? Do they still speak the language?..."



    This must qualify as the most retarded question I've ever read here. No offense, but it's true. Daughter of Magdalene!

    Why are there so many French-Canadians in Canada? Or so many Ukranians in Canada??

    For the same reasons there are tons of Italians, Catalonians, Basques, Galicians, Germans, Portuguese, Irish, Poles, Jews, Turks, Armenians, English, French, Welsh/Scotts, Paraguayans, Chileans, Bolivians, Peruvians... in Argentina.

    In fact, by the ratio of immigrant : native born, Argentina received more immigrants per capita than any other country in the history of the world. At one point 38% of Argentina's population was foreign born.

    My internet was not shut down, the internet has shut me down