Before the COVID-19 pandemic, Argentina’s aviation sector was in transition, as young cheap airlines struggled to identify themselves in a market that was beginning to liberalize.
Now, with two ultra-low-cost airlines and one national airline in Argentina, there seems to be some rationality in the country’s market in a post-pandemic environment, as the country’s aviation sector continues at a steady pace. The country’s operators continue to maintain positive customers as they grow and rebuild their networks.
Although Argentina has remained closed longer than other Latin American countries due to the COVID-19 pandemic, consolidation has ultimately created opportunities for ultra-low-cost Argentine airlines. These airlines have also been largely successful in continuing their expansion trajectories.
It can be argued that Argentina may have an evolution of the aviation market towards Mexico, a country whose largest airlines are one full-service airline and two ULCCs.
Summary
The level set for cheap operators to enter the Argentine market in 2015, when the country’s then-president, Mauricio Macri, allowed airlines to expand into the domestic market and allowed foreign operators to provide services in Argentina’s secondary market. -Permanent ground of air tickets in the Argentine market in 2018.
Ultra-low carrier Flybondi debuted in July 2018, followed by Norwegian Air Argentina in October 2018.
JetSMART Argentina entered the market in April 2019.
When Alberto Fernández was president of Argentina in 2019, there were fears that the country’s government would return to protectionist practices. Fernández’s vice president is the country’s former president, Cristina Fernández de Kirchner, whose government has not adopted the liberalization of the aviation sector.
At the end of 2019, Norwegian Air Argentina went to market and sold its operations to JetSMART Argentina.
Norwegian exited the market just before the COVID-19 pandemic and crisis, LATAM Airlines Argentina, which at one point was the country’s second-largest domestic airline, also ceased operations.
Although Argentina has remained closed longer than other Latin American countries due to the COVID-19 pandemic, consolidation has ultimately created opportunities for ultra-low-cost Argentine airlines. These airlines have also been largely successful in continuing their expansion trajectories.
Data from ANAC Argentina show that the thirteen million domestic passengers carried by the country’s airlines in 2022 were about thirteen percent less than in 2019 in figures.
The percentage of Flybondi passengers in December 2022 jumped 6 ppts year-over-year, while Aerolineas Argentinas’ percentage fell by the same amount.
JetSMART Argentina maintained its 15% stake.
Flybondi recently took delivery of its 12th Boeing 737-800 and has five more aircraft. The company forecasts a profit of $500 million by 2023.
The airline is expanding its capacity at an immediate speed this year, either compared to 2022 and 2019.
Argentina’s other ultra-low-cost carrier, JetSMART Argentina, also expects expansion in 2023.
Most likely, these airlines have concluded that they can seize opportunities to take advantage of Argentina’s continued recovery and buoyant traffic as the cheap style gains traction.
Flybondi estimated that 20% of its consumers travel by air for the first time. The airline carried around 2. 3 million passengers (domestic and international) in 2022, up from 1. 5 million in 2019.
The Argentine national airline Aerolineas Argentinas spoke of a healthy recovery in the Argentine market.
The airline recently said it carried 11% more passengers in January 2023 to the same era in 2020.
The 11. 4 million passengers carried by the airline in 2022 are still lower than the 13. 3 million passengers that Aerolineas Argentinas carried in 2019. But the airline, Argentina’s intercontinental airline, had a larger presence overseas before the pandemic.
The 8 million passengers who traveled to Argentina in 2022 represent a drop of 44% compared to the 14. 3 million passengers transported in 2019, according to ANAC data.
Aerolineas Argentinas carried 2 million passengers in 2022, up from 3. 3 million in 2019.
Aerolineas Argentinas’ capacity trajectory is a bit slower, but Flybondi and JetSMART Argentina start from a much smaller base.
Aerolineas Argentinas remains the Argentine airline measured by departure frequencies, with a wide margin, as can be seen below.
Argentina’s domestic ASK will surpass pre-pandemic grades in the first half of 2023, but opportunities for airline operators to justify this growth.
During 2H2022, Flybondi and Aerolineas Argentinas concluded that the domestic call for oversupply.
See similar CAPA report: Argentine airlines positive, while the call remains solid
In fact, in January 2023, Aerolíneas Argentinas noted that in January 2023, approximately 2. 5 million passengers were transported to, from and within Argentina, which exceeded pre-pandemic figures.
For now, it turns out that the country’s airlines are behaving rationally.
There have also been a number of announcements related to long distance service to Argentina; however, the country’s foreign ASK through the end of July 2023 remains below pre-pandemic levels.
This will most likely be replaced over the course of the year, as more airlines load more intra-regional flights in South America, as well as long-haul services.
For example, Delta Air Lines, a member of Aerolineas Argentinas’ SkyTeam, will launch flights from New York JFK to Buenos Aires in the fourth quarter of 2023, and the Argentine flag carrier will expand frequencies from Buenos Aires to Madrid and Rome in July 2023.
Other airlines are also rushing to resume service or are comparing the launch of a service to Argentina.
There is no doubt that Argentina is very promising for ultra-low operators that have set up shop in the country.
In some respects, the trajectory of the Argentine market may simply reflect the evolution of the aviation market in Mexico.
Mexico’s 3 airlines are full-service operator Aeromexico and ULCC Volaris and Viva Aerobus; Volaris is the national airline of Mexico in terms of passengers carried.
Whether this will be the case remains to be seen. But for now, Argentina’s full-service airline and ULCC’s startups appear to have a nonviolent coexistence.
Before the COVID-19 pandemic, Argentina’s aviation sector was in transition, as young cheap airlines struggled to identify themselves in a market that was beginning to liberalize.
Now, with two ultra-low-cost airlines and one national airline in Argentina, there seems to be some rationality in the country’s market in a post-pandemic environment, as the country’s aviation sector continues at a steady pace. The country’s operators continue to maintain positive customers as they grow and rebuild their networks.
Although Argentina has remained closed longer than other Latin American countries due to the COVID-19 pandemic, consolidation has ultimately created opportunities for ultra-low-cost Argentine airlines. These airlines have also been largely successful in continuing their expansion trajectories.
It can be argued that Argentina may have an evolution of the aviation market towards Mexico, a country whose largest airlines are one full-service airline and two ULCCs.
Summary
The level set for cheap operators to enter the Argentine market in 2015, when the country’s then-president, Mauricio Macri, allowed airlines to expand into the domestic market and allowed foreign operators to provide services in Argentina’s secondary market. -Permanent ground of air tickets in the Argentine market in 2018.
Ultra-low carrier Flybondi debuted in July 2018, followed by Norwegian Air Argentina in October 2018.
JetSMART Argentina entered the market in April 2019.
When Alberto Fernández was president of Argentina in 2019, there were fears that the country’s government would return to protectionist practices. Fernández’s vice president is the country’s former president, Cristina Fernández de Kirchner, whose government has not adopted the liberalization of the aviation sector.
At the end of 2019, Norwegian Air Argentina went to market and sold its operations to JetSMART Argentina.
Norwegian exited the market just before the COVID-19 pandemic and crisis, LATAM Airlines Argentina, which at one point was the country’s second-largest domestic airline, also ceased operations.
Although Argentina has remained closed longer than other Latin American countries due to the COVID-19 pandemic, consolidation has ultimately created opportunities for ultra-low-cost Argentine airlines. These airlines have also been largely successful in continuing their expansion trajectories.
Data from ANAC Argentina show that the thirteen million domestic passengers carried by the country’s airlines in 2022 were about thirteen percent less than in 2019 in figures.
The percentage of Flybondi passengers in December 2022 jumped 6 ppts year-over-year, while Aerolineas Argentinas’ percentage fell by the same amount.
JetSMART Argentina maintained its 15% stake.
Flybondi recently took delivery of its 12th Boeing 737-800 and has five more aircraft. The company forecasts a profit of $500 million by 2023.
The airline is expanding its capacity at an immediate speed this year, either compared to 2022 and 2019.
Flybondi: weekly ASK systems, from 2019 to March 2023
Source: CAPA – Aviation Center and OAG
Argentina’s other ultra-low-cost carrier, JetSMART Argentina, also expects expansion in 2023.
JetSMART Argentina: weekly ASK systems, 2019 to March 2023
Source: CAPA – Aviation Center and OAG
Most likely, these airlines have concluded that they can seize opportunities to take advantage of Argentina’s continued recovery and buoyant traffic as the cheap style gains traction.
Flybondi estimated that 20% of its consumers travel by air for the first time. The airline carried around 2. 3 million passengers (domestic and international) in 2022, up from 1. 5 million in 2019.
The Argentine national airline Aerolineas Argentinas spoke of a healthy recovery in the Argentine market.
The airline recently said it carried 11% more passengers in January 2023 to the same era in 2020.
The 11. 4 million passengers carried by the airline in 2022 are still lower than the 13. 3 million passengers that Aerolineas Argentinas carried in 2019. But the airline, Argentina’s intercontinental airline, had a larger overseas presence before the pandemic.
The 8 million passengers who traveled to Argentina in 2022 represent a drop of 44% compared to the 14. 3 million passengers transported in 2019, according to ANAC data.
Aerolineas Argentinas carried 2 million passengers in 2022, up from 3. 3 million in 2019.
Aerolineas Argentinas’ capacity trajectory is a bit slower, but Flybondi and JetSMART Argentina start from a much smaller base.
Aerolineas Argentinas: weekly ASK system, from 2019 to March 2023
Source: CAPA – Aviation Center and OAG
Aerolineas Argentinas remains the Argentine airline measured by departure frequencies, with a wide margin, as can be seen below.
Argentina: formulates departure frequencies by airline, end of February 2023
Source: CAPA – Aviation Center and OAG
Argentina’s domestic ASK will surpass pre-pandemic grades in the first half of 2023, but opportunities for airline operators to justify this growth.
During 2H2022, Flybondi and Aerolineas Argentinas concluded that the domestic call for oversupply.
Argentina national ASK, 2019 at the end of July 2023* (forecast for the next six months)
Source: CAPA – Aviation Center and OAG
See similar CAPA report: Argentine airlines positive, while the call remains solid
In fact, in January 2023, Aerolíneas Argentinas noted that in January 2023, approximately 2. 5 million passengers were transported to, from and within Argentina, which exceeded pre-pandemic figures.
For now, it turns out that the country’s airlines are behaving rationally.
There have also been a number of announcements related to long distance service to Argentina; however, the country’s foreign ASK through the end of July 2023 remains below pre-pandemic levels.
Argentina: International ASK from 2019 to the end of July 2023* (forecast for the next six months)
Source: CAPA – Aviation Center and OAG
This will most likely be replaced over the course of the year, as more airlines load more intra-regional flights in South America, as well as long-haul services.
For example, Delta Air Lines, a member of Aerolineas Argentinas’ SkyTeam, will launch flights from New York JFK to Buenos Aires in the fourth quarter of 2023, and the Argentine flag carrier will expand frequencies from Buenos Aires to Madrid and Rome in July 2023.
Other airlines are also rushing to resume service or are comparing the launch of a service to Argentina.
There is no doubt that Argentina is very promising for ultra-low operators that have set up shop in the country.
In some respects, the trajectory of the Argentine market may simply reflect the evolution of the aviation market in Mexico.
Mexico’s 3 airlines are full-service operator Aeromexico and ULCC Volaris and Viva Aerobus; Volaris is the national airline of Mexico in terms of passengers carried.
Whether this will be the case remains to be seen. But for now, Argentina’s full-service airline and ULCC’s startups appear to have a nonviolent coexistence.