Airlines in Latin America Finally Getting a Lift

Air carriers in Latin America have been having a shaky few years. What 9/11 did for U.S. carriers, COVID-19 did for airlines in Latin America by exposing alignment weaknesses in the models, fleet sizes, passenger appeals and prices with some serious fallout just now clearing.

By some counts, at least 64 airlines worldwide have ceased operations since 2020. And Latin America’s piece of that pie may be as high as 20 percent. The most notable of Chapter 11-seeking carriers from the southern reaches are easily Aeromexico, LATAM and Avianca.

Whether due to worldwide shutdowns during the pandemic, inability to compete commercially, high taxes, complex regulations, or political instability, the undressing these airlines experienced during the past few years will undoubtedly have lasting effects.

The process of restructuring is not unfamiliar to American carriers. The list includes Delta, America West, US Airways, Continental, Northwest, Eastern, and American; the list is hefty. Some reorganized and restructured, others merged, and others ceased operations completely.

In Latin America, the shake-out has allowed LATAM, Aeromexico and Avianca to re-emerge stronger and more resilient. Aeromexico, which owes a 49% stake to Delta, has been busy adding flights and routes over the past few weeks following its lift from Category 1 status imposed by the Federal Aviation Administration (FAA).

Over the last two years Mexican carriers were given Category 2 status by the U.S. agency when it was determined that Mexico flight regulations did not meet International Civil Aviation Organization (ICAO) safety standards.

LATAM also took a blow from Covid. The Chile-based Star Alliance member became the largest airline in the world to be driven to bankruptcy during the pandemic when it filed for Chapter 11 Bankruptcy protection in the U.S. in May 2020. But the airline structured its debt and officially exited that protection status in July with a modernized fleet, a strengthened financial position and 35% less debt.

Earlier this month, it took possession of its first A321neo and plans to receive more than 100 new aircraft from Airbus by the end of the decade through direct orders and lease agreements. With no less fanfare, Avianca, which was founded in 1919 and has maintained its position as the third-largest airline in Latin America based on market share, filed for Chapter 11 bankruptcy in the US in May 2020. The Bogota-based airline and Star Alliance member hoped the move would help “protect and preserve operations.”

The airline emerged from Chapter 11 in December 2021 as a stronger and more efficient air carrier and, earlier this month, celebrated that strength with a new tagline, brand concept and fleet redesign. “The Sky Belongs to Everyone” is Avianca’s new clarion call as it looks at 104 years of operations – and its name now requires a lowercase “a.”

“This is perhaps the greatest reinvention of an airline in the history of aviation. That’s why today we say hello to avianca in lowercase and goodbye to the uppercase ‘A’ of the past. This is a brand that honors our history and at the same time represents what we are today, a renewed avianca: friendly, agile, accessible, attentive and cheerful. An avianca that looks you in the eye and calls you by your name. An avianca where everyone is welcome and where the sky belongs to all,” said Adrian Neuhauser, CEO of Avianca.

New avianca plane. (Photo Credit: Reyna Figueroa)

Neuhauser announced the new spelling and cabin changes at a press conference in mid-October. And the new avianca will be flying to 146 routes, 74 destinations, and 24 countries in operation by the end of 2023. These include 26 new routes and eight new destinations: Ipiales, Cusco, Belo Horizonte, Manaus, Boston, Chicago, Las Vegas and Oakland.

And the changes also include a whole new plane concept – with only economy seats on offer. It turns out that switching to an all-economy model on its A320 aircraft allows for 20% more passenger capacity. The airline is taking in 16 more A320 aircraft starting this month, plus an additional 100 A320neo planes beginning in 2025. But the all-economy class flights will bring a set of choices – three types of economy seats are ready to be booked.

Premium seats, arranged in 2 x 2 configurations, take up the first three rows of the cabin and feature a center console for drinks, elbows and personal items. The seats have personal electronic device holders, USB ports, and recline.

Plus, seats run through rows 4 to 14 and feature reclining backs, headrests, personal electronic device holders, and USB outlets. Behind them, Economy seats extend from row 15 to row 32. These seats do not recline, but they will offer personal electronic device holders and ports. The new seat designs are still in motion and will not be completed until next year.

Business class flatbed seats are still available for international flights on avianca’s Boeing 787 aircraft.

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