Argentina–Chile is South America’s fastest-growing intra-country market; Brazil’s domestic sector leads despite 0.3% capacity cut in 2017
In 2017 there are over 230.4 million seats on offer on intra-South American services, an increase of 1.5% (net increase of 3.34 million seats) when compared to 2016. A few new carriers entered commercial service in South America this year, with the most notable ones being JetSMART (Chile) and Latin American Airlines (Peru). JetSMART, Chile’s first ULCC, is the leading new airline in the region. It commenced operations from Santiago in July on a number of domestic services. The introduction of JetSMART services in Chile has seen the domestic sector in the western South America nation become the fastest-growing of all domestic markets in the region this year, with capacity up 16%. The intra-Chilean market is, however, dwarfed when compared to South America’s leading country market.
Brazil’s domestic sector is region’s leading market
A total of 115.39 million seats are on offer in Brazil’s domestic market in 2017. However, the capacity on non-international services from Brazil is down 0.3% when compared to 2016. The top nine intra-South American markets in 2017 are all domestic, with Venezuela, Ecuador and Bolivia, also experiencing capacity cuts compared to 2016. The three remaining markets in the top 12 all link to Chile, with that country’s connection with Argentina being the biggest growing market, showing a rise in seat capacity for this year of just under 34%. One carrier which has advanced greatly in the latter market recently is LATAM Airlines, which only last week introduced new services from Santiago to San Juan and Neuquen.
While the Brazilian domestic sector is still by far the region’s largest market, the dominance of its operation has decreased in recent years as other intra-country pairings have developed, and the Brazlian market has faced many external factors affecting its performance. In 2011, the Brazilian domestic market accounted for 61% of all seats on intra-South America services. This year it accounts for just over 50%. Nonetheless, it still shows that domestic services in Brazil clearly dominate the intra-South American market.
The cuts being seen in the Brazilian domestic market are clearly evident in the overall growth of intra-South American seats. While overall capacity in 2017 grew 1.5%, the outcome is still 3.5% (8.46 million seats) down on the overall market size in 2015, the peak year for intra-South American seats in recent times. If Brazil is excluded from the analysis, the remaining intra-South America capacity actually encountered a 3.4% upswing in seats this year when compared to 2016, growing faster than the 2.7% year-on-year increase between 2015 and 2016. Excluding Brazil, the best year in recent times for seat capacity growth on intra-South American services was 2013, with the number of seats on offer increasing by 10% from the total of 88.2 million in 2012.