Business travel is bouncing back in Latin America. In the past few weeks, we have seen the terrific financial results of GOL Linhas Aéreas and Azul Linhas Aéreas, and now an increase in business capacity by LATAM Airlines Group. Let’s take a look at the bounce-back of Latin America’s business travel.
The first hint at the recovery of the business travel, the corporate segment, came from Brazil’s GOL Linhas Aéreas during its investors’ call earlier this month.
In January and February, sales levels for the Brazilian carrier increased by 10% and 30%, respectively, compared to the same periods in 2019. In March, the growth was even more significant, surpassing by 60% its pre-pandemic traffic level.
Most of this growth came from a strong recovery by the corporate segment. Overall, GOL has not yet fully rebounded to its pre-pandemic levels in terms of passengers carried, but it now has more revenue despite the challenging environment.
Paulo Kakinoff, the airline’s CEO, explained the rebound of corporate travel. The Brazilian government eased the travel restrictions in February, which became “the final piece” to allow for the return of the “very large corporate demand for our business.”
The recovery was so strong, that Kakinoff said “we have been positively surprised by the large corporate demands overcoming the most optimistic forecast.”
Azul’s interesting results
Brazil’s Azul Linhas Aéreas also recorded an increase in corporate bookings.
Compared to 2019, corporate revenue recovered more than 120%, while corporate traffic is still at 71% of pre-pandemic, indicating further room for improvement. The increase in corporate bookings has allowed Azul to raise fares, offsetting rising fuel prices.
LATAM Airlines Group is boosting its corporate segment with more capacity and more itineraries on domestic routes in Chile.
The local subsidiary of the airline group plans to increase capacity by an average of 5% (measured in ASK) on flights to and from Iquique, Antofagasta, Calama, Copiapó, and Concepción, all departing from Santiago.
LATAM is increasing its capacity on selected routes in Chile in response to an incipient recovery in demand, especially in the corporate or business segment.
“This increase in capacity is an indicator of a gradual recovery of the corporate segment, where more and more business travelers need to reconnect face-to-face with their customers and suppliers, in addition to the interest in the carbon footprint offset program “Vuela Neutral,” where LATAM doubles the compensation of companies in a 1+1 scheme,” said Andreas Schek, Vice President of Sales of LATAM Airlines Group.
LATAM is increasing by 13% its capacity to Concepción; by 11% its capacity on the route to Iquique; by 3% to Copiapó; by 2% to Calama, and by 1% to Antofagasta.
Despite this announcement, LATAM maintains its forecast of cautious optimism, expecting passenger operations and demand to continue to improve progressively, but without losing sight of the risks generated by the external environment and the global scenario.
Daniel Martínez Garbuno is a Mexican journalist. He has specialized in the air industry working mainly for A21, a Mexican media outlet focused entirely on the aviation world. He has also published on other sites like Simple Flying, Roads & Kingdoms, Proceso, El Economista, Buzos de la Noticia, Contenido, and Notimex.