JetSmart is an airline that started operations in Chile in 2017 with the aim of expanding to more countries in Latin America under the low cost model. They have already arrived in Argentina, in 2021 they will enter Peru and in 2022, after a brand positioning plan, they hope to enter Colombia.
By December, the airline will triple its operations between Chile and Colombia with routes to Santiago and Antofagasta. This was expressed by Estuardo Ortiz, CEO of the airline.
How did JetSmart start?
JetSmart is a member of a North American investment portfolio called Indigo Partners, which has been investing in low-cost airlines around the world for 20 years, they have eight airlines. In 2015, the project to establish a low cost airline began in all of South America, since in Europe 60% of air traffic is under this model, but aviation in the region has grown under the traditional model. The JetSmart project starts in Chile in 2017, in 2019 we open JetSmart Argentina and in 2021 we will open in Peru.
What is the expansion plan?
The JetSmart project is quite ambitious and seeks to cover all of Latin America. Indigo led the largest aircraft purchase in history in 2017, when it purchased 430 A320s. JetSmart’s order is for 104 aircraft, we now operate 17, the entire fleet is new. The ultra low cost concept arrived in Colombia with Viva in 2010, and our goal is always to sell 35% cheaper than a traditional airline. In Peru we expect to be certified by the end of the first quarter of 2021 and we will start operating in the second quarter.
When would they arrive in Colombia?
Colombia is a market that has a lot of potential. At the beginning of 2020, we started operations to Colombia with routes from Bogotá and Cali to Santiago de Chile. We have already resumed these routes after the pandemic and recently we announced the Bogotá and Cali routes to Antofagasta. We have been working with the authorities to request more authorization permits, we are going to triple the offer of flights in December compared to November to Colombia.
JetSmart may have operations in Colombia in the medium term, we are developing the brand presence with more flights from Chile and soon from Peru. We want to position the brand to eventually have a JetSmart Colombia in 2022 or close to those dates.
How do you see the competition in the country?
Crises also bring opportunities. JetSmart is very well positioned in its cost structure, fleet plan and capitalization. We can go to position ourselves in countries in such a way that when the market recovery begins to take place in 2022 and 2023 we can take advantage of demand.
Competition has had to undergo changes thanks to financial and operational restructuring, which allows room to grow.
Originally we would have developed our operation in Chile or Argentina further before opening Peru or Colombia, but what is happening is that the domestic market in the region is recovering faster than the international one. To take advantage of this, you have to have your own operation, therefore, changing the roadmap, to expand our operation in different countries will be more important than before.
Will the crisis enhance the low cost model?
I have no doubt that the ultra low cost model is more resilient. We all hope that the pandemic will pass, but the economic effect will last for years. In this sense, JetSmart is well positioned because there will be high sensitivity to price, both for individuals and companies. An airline with lower prices is going to have better market capture than a traditional one.
Should the governments of the region cooperate to encourage regional tourism?
The governments of the region need to be aware that the airline sector has a very high impact on employment and the economy. Air connectivity is essential. Planning tourist incentives such as the reduction of VAT as Colombia or Argentina did are important, the reduction of rates serves to promote the recovery of air traffic.
In his Linkedin account, Estuardo commented
At JetSMART we found opportunity in the midst of the crisis. This is the learning that leads us to relaunch our routes from Colombia to Chile and once again bring Colombian and Chilean families closer together; and contribute to the beginning of the recovery of tourism and the economy among the countries of South America. Fly SMART. Personally, I am very happy to contribute to Colombia, a country that welcomed me for several years and that we believe has enormous potential.Estuardo Ortiz Linkedin