Aerolineas Argentinas growing by 30%; new domestic routes spearhead this year’s surge

TAME inaugurated services on the 4,400-kilometre route from Quito to Buenos Aires Ezeiza on 7 June, becoming only the second new airline to start services to Argentina in the last 12 months, along with Turkish Airlines. A daily schedule is operated on the new route using A319s in competition with LAN Airlines’ five weekly departures.

With a population in excess of 40 million, making it the third largest on the continent behind Brazil and Colombia, Argentina has witnessed a period of sustained air traffic increases, fuelled by GDP growth which is currently outstripping its bigger South American cousins – 0.75% in the last year (ending Q1 2013), versus 0.48% in Brazil and 0.7% in Colombia (Source: Tradingeconomics.com). Much of the recent traffic improvements have come from the resurgent state-owned and SkyTeam alliance member Aerolíneas Argentineas, which has grown its capacity by nearly 30% in the last year.

Robust domestic growth expected this year

The annual number of seats available in the Argentinian market is planned to increase by 8.2% this year, according to data reported by the airlines as of 5 August 2013. Since 2005, the total market has grown by over one-third, up from 14 million to an anticipated figure of nearly 19 million for 2013.

2005-2013* Argentina capacity Annual one-way seats (millions)

Source: Innovata / Diio Mi *2013: As reported on 5 August 2013.

Over the period in question, international capacity growth has just outpaced that of domestic, with the former increasing by 36%, whereas domestic managed a 32% hike in seats. However, when reflecting on annual data from 2013 versus 2012, the roles are reversed, with domestic growing by close to 15% year-on-year, and with international capacity expected to marginally decline by less than 1%.

Nearly nine in ten flights operated by top five

The five top airlines in Argentina command 83% of seats and 88% of frequencies, with the market as a whole adding a further 13% of capacity over the past 12 months. Market leader Aerolíneas Argentinas has increased its share in terms of weekly frequencies from 51.1% to 55.3%, whereas its weekly seats have developed even more markedly, growing 6.6% to 52.4%, probably as a result of SOL, GOL and TAM all reducing their respective share of the market.

Top five airlines WF Aug 13 % Change Market Share WS Aug 13 % Change Market Share
Aerolíneas Argentinas 1,562 +18.4% 55.3% 191,899 +29.7% 52.4%
LAN Airlines 604 +8.1% 21.4% 84,640 +7.9% 23.1%
SOL 197 -5.7% 7.0% 6,698 -5.7% 1.8%
GOL 72 -20.0% 2.5% 12,786 -23.6% 3.5%
TAM 56 -11.1% 2.0% 9,345 -19.8% 2.6%
Source: Innovata / Diio Mi 10-16 August 2013 vs same week in 2012. WF = weekly frequencies; WS = weekly seats.

Over the period in question, international capacity growth has just outpaced that of domestic, with the former increasing by 36%, whereas domestic managed a 32% hike in seats. However, when reflecting on annual data from 2013 versus 2012, the roles are reversed, with domestic growing by close to 15% year-on-year, and with international capacity expected to marginally decline by less than 1%.

Nearly nine in ten flights operated by top five

The five top airlines in Argentina command 83% of seats and 88% of frequencies, with the market as a whole adding a further 13% of capacity over the past 12 months. Market leader Aerolíneas Argentinas has increased its share in terms of weekly frequencies from 51.1% to 55.3%, whereas its weekly seats have developed even more markedly, growing 6.6% to 52.4%, probably as a result of SOL, GOL and TAM all reducing their respective share of the market.

Argentina - top 12 domestic airports Weekly frequency and capacity share

Source: Innovata / Diio Mi for 10-16 August 2013

There are two airports which have posted year-on-year growth in excess of 30%, with Rio Gallegos, the capital and largest settlement in the Patagonian province of Santa Cruz in the extreme south of the country, leading the way with a 33.3% increase. It narrowly beat the #8 airport, Comodoro Rivadavia, also in Patagonia, but this time in the Chubut province, which recorded an impressive frequency hike of 32.7%.

Santiago closes gap on market leader

The top 12 international routes represent over 77% of all seats, which is down 2% from 2012 figures. Recording a near 5% growth in the last 12 months, Santiago in Chile has narrowed the gap on the #1 international destination of Sao Paulo Guarulhos in Brazil. While GOL has withdrawn its daily Ezeiza to Santiago operation, Chile’s second largest carrier (behind LAN Airlines), Sky Airline, has added a further seven frequencies, to take its weekly flights up to 20 on the city pair. Aerolíneas Argentinas has also increased its weekly capacity from Aeroparque to the Chilean capital by an extra nine flights.

Argentina - top 12 international destinations Weekly one-way capacity

Source: Innovata / Diio Mi 10-16 August

The fastest growing international destination in Argentina is the Uruguayan capital of Montevideo, which has seen a 36% increase since August 2012. Much of this growth has been delivered as a result of new Uruguayan entrant BQB Líneas Aéreas, which has begun double-daily operations to Aeroparque, as well as five weekly services to Ezeiza, both routes flown by its ATR-72s. SOL has withdrawn its 12 weekly operation from Aeroparque, but has added a weekly rotation from Rosario. Meanwhile from April this year, Air France has extended its existing four weekly service from Paris CDG to Ezeiza onto Montevideo.


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