Chilean Carriers Release Projections for 2021 Operations

posted on 30th November 2020 by Eddie Saunders
Chilean Carriers Release Projections for 2021 Operations

The airline industry has been immersed in the worst crisis in history as a result of the COVID-19 pandemic. But in recent months, with the gradual borders reopening and fewer restrictions due to the lifting of quarantines, airlines have gradually resumed their operations, although still far from normal.

This Wednesday, the main executives of LATAM Airlines, SKY Airlines and JetSmart met at a conference at the Business Travel Expo, organized by Interexpo and Travel Security, where they talked about their perspectives and plans for 2021.

In the case of LATAM Airlines, it estimates that it will be operating close to 40% of its total capacity by the end of the year. In October, the airline operated 26.8% of its capacity. Sky Airlines, for its part, expects to close the year operating at 80% of its total capacity. While Jetsmart estimated to operate in December between 60% to 65% of its capacity in the domestic market and between 15% to 20% in the international market.

LATAM Airlines CEO Roberto Alvo estimated that 2021 will be a year of recovery, but with ups and downs. Regarding LATAM’s financial reorganization process under the protection of the U.S. Chapter 11 Bankruptcy Law, Alvo said that he sees it as an opportunity to turn LATAM into an extremely efficient and efficient company.

“The transformation we are embarking on is extremely important and we are going to emerge from Chapter 11, strengthened. We are going to have a very competitive cost structure, probably the same as yours (Sky and Jetsmart) and that will surely allow us to attend the opportunities”, he said. “We estimate that throughout the second half of next year we should be thinking about exiting Chapter 11,” he added.

JetSmart CEO, Estuardo Ortiz, agreed that despite the uncertain scenario, 2021 will be a year of recovery. He affirmed that the carrier will continue in the same direction in terms of growth and positioning in the region. However, the airline will adjust to the new demands: domestic markets are recovering faster than the international ones. In that sense, JetSmart has to adapt to the new reality.

“We have chosen rather to accelerate our opening of domestic operations and that is why we expect to operate in Peru in the second quarter of 2021,” Ortiz said. The original plan was to start domestic operations in Peru in 2022.

On the other hand, he commented that another important change is the creation of JetSmart Cargo. “We had planned it for later, but as a result of the COVID-19 pandemic, cargo operations had a greater impact on airline revenues. We are already finalizing the project to start in the first quarter of 2021,” he said. It would start operating simultaneously in both Chile and Argentina.

Finally, Sky Airlines CEO José Ignacio Dougnac explained that his airline is currently operating about 65% of its total capacity and that he expects to close the year at approximately 80%.

“As at Sky our strategy is very focused on the domestic market – 80% of our flights are domestic – we have a position that is relatively better than other operators where they have a lot of risk in international operations,” Dougnac told La Tercera. “Although the industry is super depressed, the entire industry is 85% down, we are flying at 65% of our total capacity because we are in markets that have been less affected by the pandemic and therefore we can deploy a little more.”

He projects that from the summer of next year, international traffic will begin to gradually recover. In this sense, he estimated that from the last quarter of 2021, Sky Airlines could recover passenger traffic (domestic and international) as before to the COVID-19 pandemic.