Avianca sees the proliferation of discount carriers as its main competitive threat as it emerges from its Covid-19 pandemic induced restructuring. And for good reason, JetSmart, Viva Aerobus, Viva Air Colombia and Volaris have all used the crisis to expand deeper into Avianca’s territory from Colombia to Costa Rica and El Salvador.
In the reorganization plan Bogotá-based Avianca filed with a U.S. Chapter 11 bankruptcy court in August, the airline said competition from low-cost carriers has “compelled [it] to further adapt its business model” to meet the growing threat. One way it is doing this is adding seats on its narrowbody jets where Airbus A320s will have up to roughly 186 seats — the same number as on many of its budget rivals.
Avianca also is hitting back against the new competition by diversifying its route map. The airline is adding a slew of point-to-point routes that offer nonstop options to travelers that bypass its Bogotá — long the center of Avianca’s hub-and-spoke operation — and San Salvador hubs. Most recently, Avianca unveiled plans to connect Cali and Medellin with Buenos Aires, as well as Bogotá with Cordoba, Argentina, with either Airbus A319s or A320neos, in a request to Colombian authorities. The new routes would quadruple the size of its network to Argentina where it only flies Bogotá-Buenos Aires today.
And earlier in August, Avianca unveiled plans for 22 new international routes that largely bypass its hubs. Bucaramanga, Cali and Medellin, Colombia; Guayaquil and Quito, Ecuador; and San José, Costa Rica, will all see new service to points in the Caribbean, northern Latin America and the U.S.
Point-to-point service has long been the hallmark of ultra low-cost carriers. The airlines fly to meet demand and not through a set hub. For example, while in Chile JetSmart offers many routes to Santiago, it also offers the most nonstops — five to Latam Airlines’ two — from the coastal college town of Concepcion in September, according to Cirium schedule data. And closer to home for Avianca, El Salvadoran authorities recently signed off on Volaris’ new local subsidiary that will fly nonstop routes from the country — likely from San Salvador — to places other than Mexico. Volaris management has indicated that new service to the U.S. is likely.
“Avianca expects to build on its core strengths, including its … brand recognition [and] its market leadership position in the vibrant Latin American airline market … in order to emerge from these Chapter 11 cases as an elite competitor for years to come,” the airline said in its reorganization plan. These are assets that will undoubtedly benefit it as it goes up against the raft of new budget competitors.
- The Lufthansa Group is expanding its presence in Kiev. Budget arm Eurowings has begun flights connecting the Ukrainian capital with Dusseldorf. The group now flies up to 70 times a week to Kiev to its hubs in Austria, Germany and Switzerland.
- Italy’s new national carrier Italia Transporto Aereo (ITA) has outlined its service plans for the U.S. following its October 15 launch. Initially, the carrier that replaces Alitalia will serve Boston, Miami and New York JFK from Rome Fiumicino; as well as JFK from Milan Malpensa, according to its application for a foreign air carrier permit with the U.S. DOT. ITA plans to add service to Los Angeles and Washington Dulles from Rome in 2022; and Chicago O’Hare and San Francisco from Rome in 2023. ITA will initially fly former Alitalia Airbus A330s on its U.S. routes.
- Amid continued questions over the future status of Latam Airlines Brasil, the carrier is adding new service between São Luís and Teresina in northeastern Brazil. The carrier will go up against its main domestic rivals Azul and Gol, the former also being an unwanted suitor in parent Latam Airlines Group‘s U.S. Chapter 11 restructuring.
- Touting the European traffic recovery, Ryanair will add 14 new routes from London this October. The discounter will connect Gatwick to Malaga; Luton to Fuerteventura, Gran Canaria, Grenoble, Naples, Shannon and Turin; and Stansted to Helsinki, Oragea (Romania), Stockholm, Tampere, Trapani, Treviso and Zagreb.
But it’s not all growth for Ryanair. The additions come less than a week after the carrier disclosed that it will end all service to Northern Ireland by October. This includes ending service to Belfast City that resumed in June after an 11-year hiatus. Ryanair blamed the UK’s air passenger duty for the move but many in the industry have also cited the intense competition with EasyJet in the market.
- And the European discount war is on: Wizz Air is also on the move strengthening its presence in North Macedonia. The airline will connect Ohrid with Friedrichshafen, Germany, and the capital Skopje with Billund, Bologna and Turin from December. Wizz, like Ryanair, has double digit growth plans for the recovery.
- WestJet will return to Scotland next spring. The Canadian carrier will add new routes connecting Toronto and Glasgow from May 20, and Toronto and Edinburgh from June 2. The additions will complement WestJet’s seasonal Halifax-Glasgow route that is also due to resume next spring after three-year hiatus. WestJet has previously flown Boeing 737 aircraft on routes to Scotland.