This year was, without a doubt, one we will never forget. The airline industry worldwide suffered and will continue suffering from the COVID-19 crisis. Latin American airlines were not the exemption, as some entered Chapter 11 reorganizations in the US, others disappeared altogether, but some are already thriving. Let’s do a quick recap of this past 2020.
What it could have been
The International Air Transport Association (IATA) expected Latin American carriers to have a small profit in 2020. According to its 2019 results, airlines in the region were going to win, in total, US$100 million.
Last year, IATA said,
“In 2020, airlines will be helped by the rebound to 1.8% growth forecast by the IMF, led by stronger growth in Brazil and Mexico and less severe contractions in Argentina and Venezuela. This represents a US$500 million positive swing compared with an expected loss of US$400 million in 2019.”
Instead, the COVID-19 crisis started to hit the Latin American airlines during the last two weeks of March. First, they dropped long-haul flights, mainly to Europe. Shortly after that, South American governments shut down their airspaces in a failed attempt to prevent the pandemic from spreading into the region.
This left a financial burden extremely hard for many carriers to take.
Airlines that went into financial reorganization
On May 10, Avianca became the first airline worldwide to file for a Chapter 11 reorganization in the US due to the COVID crisis. The Colombian carrier had a rough 2019 that prepared it for its bankruptcy filing in the US.
A couple of weeks later, on May 26, LATAM Airlines Group filed for Chapter 11 as well. Every branch of the South American giant filed for bankruptcy except for Paraguay’s and Argentina’s. Eventually, LATAM exited the Argentinian market, leaving it for Aerolineas Argentinas to set a domestic monopoly.
In Mexico, Grupo Aeromexico also filed for Chapter 11 on January 30. Currently, three out of the four main Latin American carriers are in financial reorganization in the US.
In Colombia, the regional carrier EasyFly also filed for a domestic reorganization.
Those that disappeared, could disappear and will appear
Unfortunately, not every Latin American and Caribbean airline had the opportunity to file for a reorganization.
At least three airlines have disappeared. First, there was TAME in Ecuador. The local government ceased operations of its State carrier, paving the way for the rebirth of Ecuatoriana de Aviación.
In June, the Prime Minister of Antigua and Barbuda announced LIAT’s liquidation after years of unprofitability. Finally, in Chile, the regional carrier One Airlines ceased operations. It had a small fleet of two Boeing 737-300 and operated charter flights, and covering the mining industry needs, as reported by allplane.tv.
Other airlines are on the brink of collapse, though. The leading candidate for a full closure is Mexican low-cost Interjet. Currently, Interjet is not flying at all, having suspended its operations from December 11 to 31.
Other small regional carriers are also in jeopardy. For instance, low-cost airlines in Argentina have a tough road ahead.
Despite that, 2021 seems like a fertile year for new airlines in Latin America. So far, we expect up to six new carriers launching operations in the region.
In Brazil, there will be two new carriers: Ita Transportes Aereos and Nella Linhas Aereas. Mexico will have two new airlines in Zenith Aero and VLU. Next year, we will see the rebirth of Ecuatoriana Airlines and the launch of a new low-cost carrier in Colombia, Ultra Air.
The bounce back
To end the article on a good note, there is already a bounce back by some Latin American airlines from the COVID-19 crisis.
The low-cost carriers in Mexico and Brazil have recovered at a faster pace. Volaris and Viva Aerobus already have 100% of their pre-COVID capacity back. Azul and GOL Linhas Aereas are quickly doing the same in Brazil.
Other South American low costs like Viva Air and Sky Airline will recover in the first months of 2021.
Finally, the Boeing 737 MAX has returned to Latin America. GOL and Aeromexico are already using them on domestic flights. Copa Airlines will restart commercial flights with the MAX on January 4. Only Aerolíneas Argentinas hasn’t announced when it will resume its flights.
What do you think of Latin American aviation in 2020? Let us know in the comments.