The booming Mexican domestic market is helping to grow additional capacity in Latin America, where some of the world’s fastest growing country markets are located, according to OAG, a market leader in aviation intelligence. OAG’s September FACTS (Frequency and Capacity Trend Statistics) report shows that capacity within Central America and Upper South America is growing at a very strong pace.
According to report, capacity within Central America is expected to see growth of 15 per cent this September, with carriers adding an extra 520,000 seats compared to September 2012, when the market had seen capacity fall by two per cent. Almost all of the additional capacity in Central America comes from Mexico.
“The domestic market in Mexico has recovered well from the demise of Mexicana and is undergoing a battle for domestic market share between Aeromexico and Mexico’s three low cost carriers (LCCs) – Interjet, Volaris and VivaAerobus,” said John Grant, executive vice president, OAG. According to the data provider, much of the capacity growth is at Mexico’s main hub, Benito Juárez International Airport in Mexico City, which will see domestic seats grow by 315,000 in September 2013 versus September 2012.
OAG’s report demonstrates that LCCs have a significant share of the overall Mexican domestic market, reaching 59 per cent of all capacity in September 2013. This has almost doubled from 34 per cent in September 2009 as the LCCs replaced the previous Mexicana capacity. Aeromexico and Interjet dominate at Benito Juarez Airport (MEX) in September 2013 with 44 per cent and 32 per cent of domestic capacity respectively. Interjet alone accounts for 53 per cent of the additional September domestic capacity at the airport.
Within Latin America, OAG reports that the region’s two largest carriers the LATAM group and the Avianca-TACA group dominate the region. “With the merger of the Chilean flag carrier LAN and Brazil’s biggest airline TAM a year ago into LATAM, and their decision to be part of the Oneworld alliance, Oneworld now dominates as the largest or second largest alliance at eight of the top ten airports in Latin America. Consolidation is occurring at the ten largest airports with most airports reporting fewer operators than two years ago,” explained Grant.
In Columbia, TACA has 71 per cent of all domestic capacity and in Peru, 62 per cent of seats are operated by LATAM. There are three Brazilian airports where Oneworld is the second biggest carrier – Congonhas International (CGH), Antonio Carlos Jobim International (GIG) and Santos Dumont (SDU). At all three, Brazil’s largest LCC, GOL, dominates as the biggest carrier.
The two major Latin American airports which do not have a significant Oneworld presence are Bogota, Columbia (BOG) and Panama City, Panama (PTY), where Star has the dominant position. Star benefits from Panama’s flag carrier, Copa Airlines, and its strength in the region, particularly in Panama City where Copa represents 87 per cent of all capacity.
Brazil has the largest domestic market in Latin America and the second largest international market. However, Brazil has seen its fast paced economic growth slow and carriers have trimmed air capacity as a result. OAG reports that Brazil will see domestic seats fall by one per cent in September 2013 versus last year. The scale of Brazil’s sluggish domestic capacity masks strong growth taking place by its neighbours. Argentina and Chile are expected to see domestic capacity grow by 33 per cent and eight per cent respectively versus September 2012.
“While LCC penetration is significant in Brazil and Mexico, there is undoubtedly more scope for LCCs to enter other countries in Latin America,” said Grant. “Given that Argentina is the region’s second largest county, it would be interesting to see if LCCs would stimulate more traffic growth there, but the current protectionist approach taken by the government makes it difficult for foreign carriers to enter the market. The presence and strength of LAN in Chile’s domestic market makes it an unattractive option for new entrants.”
An executive summary of OAG’s September FACTS report is available below:
https://www.slideshare.net/richardmaslen/oag-facts-september-facts-info…
Related Content
