Thursday, March 16, 2017

NEW AIRLINE PLANS: ANAC authorizes routes to Flybondi, Avianca Argentina, Alas del Sur, Andes & American Jet - SUMMARY

The ANAC Argentine aviation authority issued five route rights decisions on 13Feb17, one for each applicant; Flybondi, Avianca Argentina, Alas del Sur, Andes Lineas Aereas and American Jet.

Andes has operated regularly scheduled and charter flights in Argentina since 2006 and American Jet has operated charter flights for the oil and mining industries from the carrier's Neuquen (NQN) base and in the north of Argentina for a number of years, but the other carriers would be new start-ups with business plans that call for them to be Low-Cost Carriers (LCC) with Flybondi's management team probably having the strongest backgrounds to launch a true low cost carrier.  Flybondi's principals include CEO Julian Cook (founder and ex-CEO of Swiss carrier FlyBaboo), Ryanair board member and ex-COO Michael Cawley, ex-Air Canada CEO Montie Brewer, and British Airways City Flyer Express founder and ex-chairman Robert Wright.

135 out of the carriers' combined 156 route requests were approved, with four of the five airlines having all of their requests ok'd, with the exception being Flybondi, which wanted more routes than all of the other carriers combined.  It had 78 out of 99 routes approved. 

Now the carriers will have 180 days to demonstrate their technical capacity to start service, including an indication of what types of aircraft they will operate and how many. 

They do not have to start all of the routes immediately.  With the route rights being in effect for 15 years, they can start most of them sometime in the future. Also, international routes will require the approval of the destination countries' aviation authorities for service to start.

The routes were mostly approved on the basis of the following criteria, many of which were determined to protect existing service by Aerolineas Argentinas and LATAM Argentina and avoid overcapacity.

* Routes with No Current Service

For example, Flybondi was approved to fly to Santiago (SCL) and Sao Paulo Guarulhos (GRU) from both Salta (SLA) and Iguazu (IGR), neither of which currently has service to the Chilean and Brazilian airports.  

* Intermediate Stops

The airlines were usually authorized to fly routes with existing service only if at least one intermediate stop is included to avoid competing directly with existing Aerolineas Argentinas' non-stop flights. 

For example, Andes was approved to fly from Buenos Aires to both Lima (LIM) and Sao Paulo Guarulhos (GRU) but only with a stop in Cordoba (COR) in both cases.

Multiple Legs

Closely related to the principle of intermediate stops, routes with several stops were also favored, again to protect Aerolineas. 

Using another example from Andes:  The carrier was approved to fly Buenos Aires - Rosario (ROS) - Resistencia (RES) - Posadas (PSS) - Iguazu (IGR) instead of the popular non-stop Buenos Aires - Iguazu (IGR) route already flown by Aerolineas and LATAM Argentina. 

* Multiple Legs - At least 50% must be Operated       

The route approvals involving multiple legs may only be operated with at least 50% of the stops being made.  The carriers do not have the option of dropping most of the intermediate points between the end cities. 

* Buenos Aires Airport to be Determined

In all routes including Buenos Aires, the ANAC reserved the right to determine which airport each carrier would use; Aeroparque (AEP), Ezeiza (EZE) or El Palomar (EPA). 


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