May is over, and the Latin American airlines in the region had ups and downs. There is some excellent news, as the launch of a new carrier in Brazil, but others are bad and will have a long-lasting impact on the region’s industry.
Latin American airlines’ ups
We will start with the good news during this period. Mexico and Colombia continue their recovery trends. According to OAG, Mexico is starting June with a 20% decrease in its pre-COVID domestic capacity levels. This country has had the best recovery in Latin America, and the second in the whole continent, behind the United States.
Meanwhile, Colombia is at -28.5.%, according to OAG, leading the recovery in South America.
Both countries have in common the low-cost boom. Volaris and Viva Aerobus have been gaining domestic market share in Mexico since Interjet’s demise. Viva Air is doing the same in Colombia.
LATAM Airlines Group was also a big up during May. The South American company announced it will expand its cargo fleet to 21 aircraft.
Following Aeromexico’s reduced MAX order, the airline received its first Boeing 737 MAX 9 on Saturday, May 29.
Meanwhile, Brazil received a new airline in May, after the AOC approval of Itapemirim Transportes Aéreos. This A320 family-based airline will launch its flights on June 29.
Finally, two additional ups during May: Iberia expanded its IATA Travel Pass trial to flights in Panama; also, Copa Airlines and Avianca announced they will try this app in the following weeks.
Latin American airlines’ downs
Unfortunately, the region continues with a difficult road towards recovery. Many countries still have complex travel restrictions like Chile and Argentina. Therefore, we can expect many more ups and downs for Latin American airlines in the next weeks.
According to OAG, there are three different recovery trends in Latin America. Northern Latin America and Central America are only 25.2% below their pre-pandemic capacity. Meanwhile, Upper South America is 36.3% below, while Lower South America is -62.8%, and the Caribbean is 40.5% down.
In Brazil, there was news that could be up or down, depending on how the story progresses. LATAM Airlines canceled its domestic codeshare agreement with Azul Linhas Aereas. Both carriers said there’s no longer a need for this agreement since there’s a recovery on the horizon.
But, following the announcement, rumors picked up regarding Azul’s interest in acquiring LATAM Brazil. Since, LATAM has rejected the idea, while Azul has been quiet about it.
Nevertheless, the biggest Latin American down of May was Mexico’s degrade to Category 2 by the Federal Aviation Administration (FAA).
Mexico being in Category 2 will have a deeper impact on this country. Mexican airlines can’t add frequencies or routes to the United States, and it couldn’t have happened at the worst time.
What can we expect in June?
There are reasons for optimism for the following months. For example, LATAM expects to end the year with a 90% capacity.
As the vaccine campaigns progress across Latin America, the local governments should open their borders more.
According to Cirium, the Latin American region will see an increase of 11.3% in flights during June, compared to May. There will be an 11.9% up in the number of seats available as well. If we compare this to 2019’s June schedule, the region is still 36.1% below in the number of flights, 33.8% below in the number of seats, and 40.9% down in the available seats per mile (ASMs).