Lima now fifth-largest in Latin America; LCCs have 14% and growing fast

Lima now fifth-largest in Latin America; LCCs have 14% share and growing fast

LATAM has grown strongly from Lima. It added the most seats in 2019 despite already having by far the highest base. This was aided by Avianca’s capacity cuts and the end of both LC Peru and Peruvian Airlines.

Lima’s Jorge Chávez International Airport is now Latin America’s fifth-largest, having moved from seventh in 2015 and tenth in 2010.  Its rise since 2015 is partly from overtaking two Brazilian airports – Brasilia and São Paulo Congonhas – which have suffered from the problems that have affected that country.  But it’s also from Lima’s fast growth, with seats totalling 31.5 million in 2019 – up 134% and 18 million over 2010 and 45% and 9.7 million versus 2015.  And because of the airport’s overcapacity – its throughput is now two-to-three times what it was built for – airlines have said they would have grown even faster.

Lima now fifth-largest in Latin America; LCCs have 14% and growing fast

Lima exceeded 30 million seats in 2019 on the back of fast growth by both LATAM and LCCs. This was despite the end of LC Peru and Peruvian Airlines and capacity reductions by Avianca. Source: OAG Schedules Analyser.

Lima benefits from both LATAM and LCC growth

There are two main reasons for Lima’s fast growth.  Firstly, the growth of the LATAM Group, whose seats have grown to 16.5 million, up nine million over 2010.  But LATAM’s domination has reduced from 56% to 52% from the growth of other operators.  Secondly, from the rise of domestic LCCs, Viva Air Peru and Sky Airline Peru, with these seeing Lima’s share of LCC seats rise from 2.5% in 2017 to 14.3% last year.

While 2020 seats aren’t yet finalised, LCC capacity in 2020 is already up from 4.5 million seats last year to 5.4 million. It’s thus likely that Lima’s penetration by LCCs will reach 18-20% this year.  Peru is well suited to LCCs, with slow, overland transport, a reasonably big population, and relatively short sectors (the longest is just over 600 miles) that enable high utilisation.  Until 2015, Lima had more international seats than domestic. As often happens when LCCs penetrate, domestic growth has overtaken international.  Since 2015, international has seen 3.5 million added; domestic, 6.2 million.

LATAM grows most on an absolute basis and from highest base

The top-10 list shows the dramatic shifts that have taken place. In all, LATAM added 1.6 million seats, the most of all operators despite its exceptionally higher base.  This was partly from cuts at Avianca, whose seats fell by 804,000 YOY, and the end of LC Peru in March 2019 and Peruvian Airlines in October. The majority of LATAM’s growth was domestic, together with various new international routes in 2019, including Cali (January), Montego Bay (December), and Porto Alegre (December).

Lima now fifth-largest in Latin America; LCCs have 14% and growing fast

LC Peru and Peruvian Airlines ended in 2019. Source: OAG Schedules Analyser.

Viva Air Peru and Sky Airlines push ahead, but Star Peru exposed

The end of LC Peru and Peruvian Airlines helped give rise to Viva Air Peru and Sky Airlines.  The two LCCs added almost identical seat volumes YOY.  Viva Air Peru, now the largest LCC, with 1.3 million extra seats, currently serves 10 domestic cities together with Bogota, Colombia. Sky Airline Peru, meanwhile, presently serves 11 domestic destinations and Santiago, Chile. For both operators, Cuzco is by far their most-served destination followed by Arequipa.  The most surprising, and worrying, operator is Star Peru, which added almost half-a-million seats YOY.  It has a small domestic network encompassing six airports,  which it serves using Boeing 737-300s.  While it is now the sole operator from Lima to Huanuco and Andahuaylas, it faces stiff competition to the others.

The domestic route map of Viva Air Peru, Sky Airline Peru, and Star Peru, in the current week, is below.  It highlights the degree to which these three operators compete directly and potential future domestic routes. 

Lima now fifth-largest in Latin America; LCCs have 14% and growing fast

Yellow = one operator of the three for now. White = more than one. Source: OAG Mapper.



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