The Changing Skies of South America
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With minimal government assistance, South America’s airlines faced pandemic-era distress, arguably even more severe than in other regions. LATAM, a powerful international competitor for decades, and by far the continent’s largest airline, was forced to file for bankruptcy. Same for Avianca, which (as you can see below) slashed capacity within South America by nearly twice the rate of LATAM. Gol, which came close to filing for bankruptcy, shrank by a similar percentage as Avianca.
One airline in particular is seizing advantage of all the turmoil. Azul, based in Brazil, is larger now than it was pre-pandemic. More importantly, Azul is already back to earning strong profits, posting an impressive 14% operating margin during the fourth quarter of 2021.
Azul is not the only South American airline, however, that’s grown since the start of COVID-19. The same is true for several low-cost carriers likewise looking to take advantage of the big capacity cuts by LATAM, Gol and Avianca. Viva, Sky and JetSMART all fit into this category.
Next week: Head for the Beach: US Airline Capacity Trends
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