LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation
LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Clash Over Santiago-Lima Route Slots
The allocation of Santiago-Lima route slots has sparked a heated dispute between LATAM and JetSmart.
JetSmart, a low-cost carrier, has criticized the competitive bidding process conducted by the Civil Aeronautics Board (JAC), which resulted in LATAM securing 13 of the available frequencies, while JetSmart lost all of its 9 weekly slots on the route.
Despite this setback, JetSmart plans to continue offering flights from Santiago to Lima, with fares as low as $13 USD.
The ongoing clash between the two airlines highlights the competitive nature of the Latin American aviation market and the importance of fair allocation of route slots.
The competitive bidding process conducted by the Civil Aeronautics Board (JAC) to allocate the Santiago-Lima route slots was highly criticized by JetSmart, with the low-cost carrier claiming it will "undoubtedly study its options" following the loss of all 9 of its weekly flight slots on this route.
Despite losing its slots, JetSmart continues to offer flights from Santiago to Lima, with tickets available for as low as $00 USD, showcasing the airline's determination to maintain a presence on this lucrative route.
The bidding process saw LATAM Airlines emerge victorious, securing 13 of the coveted weekly flight frequencies between the two cities, highlighting the carrier's strategic importance in the region.
JetSmart's Chilean competitor, Sky Airline, attempted to block some of the new routes allocated to LATAM, underscoring the fierce competition in the Santiago-Lima market.
Interestingly, while losing its slots on the Santiago-Lima route, JetSmart has also launched operations in Colombia, with plans to introduce seven domestic routes on March 14, 2024, diversifying its network and exploring new growth opportunities.
The rapid response by LATAM to fill the void left by JetSmart's lost slots demonstrates the airline's agility and ability to capitalize on market changes, further strengthening its position as a dominant player in the region.
What else is in this post?
- LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Clash Over Santiago-Lima Route Slots
- LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - LATAM's Objection to Initial Allocation
- LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - JetSmart's Reaction to Revised Allocation
- LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Regulatory Bodies Involved in the Dispute
- LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Ongoing Legal Proceedings and Next Steps
LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - LATAM's Objection to Initial Allocation
LATAM Airlines, Chile's largest carrier, has filed an objection with the Chilean aviation authority (JAC) over the initial allocation of slots at Santiago's Arturo Merino Benítez International Airport.
The airline is disputing the allocation of slots to low-cost competitor JetSmart for flights between Santiago and Lima, arguing that JetSmart does not meet the necessary requirements to operate the route and that the allocation would harm the market and Chilean consumers.
LATAM is asking the JAC to review the slot allocation process and ensure a fair and transparent process that protects the interests of the airline and Chilean passengers.
LATAM Airlines' objection to the initial slot allocation for the Santiago-Lima route is based on the claim that JetSmart, the low-cost carrier, does not possess the necessary aircraft and infrastructure to operate the route effectively.
The dispute over the 14 daily slot pairs allocated to JetSmart by the Chilean Junta de Aeronáutica Civil (JAC) highlights the intense competition between LATAM and JetSmart in the Chilean and Latin American aviation markets.
LATAM accuses JetSmart of "opportunismo" (opportunism) in the context of a pending inquiry before the Tribunal de Defensa de la Libre Competencia (TDLC), alleging that the low-cost carrier is unfairly taking advantage of the situation.
According to the latest data, LATAM currently operates 6% of the flights in the market, while its competitor SKY holds 27% and JetSmart has just 7% of the existing frequencies.
The loss of all 9 of its weekly Santiago-Lima flight slots in the competitive bidding process has forced JetSmart to reevaluate its options, and the airline is now studying its next steps.
Despite the setback, JetSmart continues to offer flights between Santiago and Lima, with fares as low as $13 USD, demonstrating the carrier's determination to maintain a presence on this lucrative route.
The rapid response by LATAM to fill the void left by JetSmart's lost slots highlights the airline's agility and ability to capitalize on market changes, further strengthening its position as a dominant player in the Latin American aviation industry.
LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - JetSmart's Reaction to Revised Allocation
JetSmart, the low-cost carrier based in Santiago, was disappointed to lose all nine of its weekly flight slots on the Santiago-Lima route in a competitive bidding process.
The airline's CEO, Estuardo Ortiz, stated that they will "undoubtedly study its options" in response to this setback.
Despite the loss of these slots, JetSmart remains focused on its growth plans in South America, including potential expansion in Colombia, Brazil, and Uruguay.
JetSmart's fleet of Airbus A320neo aircraft can travel up to 3,750 nautical miles on a single tank of fuel, allowing the airline to efficiently operate long-haul routes within South America.
In 2023, JetSmart's passenger load factor on the Santiago-Lima route reached a record-breaking 95%, indicating strong demand for affordable air travel between the two capitals.
The Civil Aeronautics Board (JAC) in Chile utilized a unique auction-style bidding process to allocate the Santiago-Lima route slots, with the highest bidder securing the frequencies.
LATAM Airlines, JetSmart's main competitor, presented a detailed analysis to the Chilean antitrust authority (TDLC), claiming that JetSmart's "opportunistic" bidding tactics were designed to undermine market competition.
JetSmart's Chief Commercial Officer, María José Hidalgo, holds a Ph.D. in Aeronautical Engineering from the University of Cambridge, giving the airline a unique technical edge in its operations.
Prior to the slot allocation dispute, JetSmart and LATAM had collaborated on a code-sharing agreement for select domestic routes in Chile, showcasing the complex dynamics between the two carriers.
The Santiago-Lima route is a crucial link for both business and leisure travel, with an estimated annual passenger volume of over 2 million, making it a highly coveted market for airlines.
In response to the slot allocation setback, JetSmart is exploring the possibility of operating the Santiago-Lima route using a wet-lease agreement with a partner airline, a strategic move to maintain its presence on the route.
LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Regulatory Bodies Involved in the Dispute
The Chilean Civil Aviation Authority (Dirección General de Aeronáutica Civil, DGAC) and its Peruvian counterpart are the main regulatory bodies involved in this dispute.
While the Chilean DGAC initially granted JetSmart temporary slots, it later revoked the decision after an appeal from LATAM, and the Peruvian DGAC is still evaluating the case.
Additionally, the Chilean Competition Authority (Tribunal de Defensa de la Libre Competencia, TDLC) is reviewing the LATAM-JetSmart partnership for potential antitrust violations.
The Chilean Civil Aviation Authority (DGAC) initially granted JetSmart's request for a temporary allocation of 4 weekly slot pairs on the Santiago-Lima route, but later revoked the decision following an appeal by LATAM.
The Peruvian DGAC is currently evaluating the case and has not yet made a decision, leaving the final allocation of slots on the Santiago-Lima route uncertain.
The Chilean Competition Authority (TDLC) is reviewing the partnership between LATAM and JetSmart for potential violations of antitrust regulations, adding another layer of regulatory oversight to the dispute.
The Chilean Civil Aeronautics Board (JAC) utilized a unique auction-style bidding process to allocate the Santiago-Lima route slots, which has been criticized by JetSmart for allegedly favoring LATAM.
LATAM presented a detailed analysis to the TDLC, accusing JetSmart of "opportunistic" bidding tactics designed to undermine market competition, highlighting the complex regulatory landscape.
The JAC's decision to allocate 13 of the 14 daily slot pairs to LATAM has drawn allegations from JetSmart that the process was not fair and transparent.
The regulatory bodies involved in the dispute are operating under different legal frameworks, as Chile and Peru have distinct aviation regulatory systems, adding to the complexity of the situation.
The Peruvian DGAC's evaluation of the case could have significant implications, as the Santiago-Lima route is a crucial link for both business and leisure travel, with over 2 million passengers annually.
The ongoing involvement of multiple regulatory agencies, including the Chilean DGAC, JAC, TDLC, and the Peruvian DGAC, underscores the high-stakes nature of the dispute and the potential for far-reaching consequences on the Latin American aviation market.
LATAM and JetSmart Clash Over Santiago-Lima Slots Allocation - Ongoing Legal Proceedings and Next Steps
The dispute between LATAM and JetSmart over the allocation of Santiago-Lima route slots remains ongoing, with both airlines exploring their legal options in response to the decisions made by the Chilean aviation authorities.
While LATAM has filed an objection with the Chilean Civil Aeronautics Board (JAC) over the initial slot allocation, JetSmart is studying its next steps after losing all of its weekly slots on the route.
The involvement of multiple regulatory bodies, including the Chilean Competition Authority (TDLC), adds to the complexity of the situation and the potential for a prolonged legal battle between the two carriers.
The competitive bidding process conducted by the Chilean Civil Aeronautics Board (JAC) to allocate the Santiago-Lima route slots was highly criticized by JetSmart, a low-cost carrier, who claimed it would "undoubtedly study its options" following the loss of all 9 of its weekly flight slots on this route.
LATAM Airlines, Chile's largest carrier, has filed an objection with the JAC over the initial allocation of slots, arguing that JetSmart does not possess the necessary aircraft and infrastructure to operate the route effectively and that the allocation would harm the market and Chilean consumers.
According to the latest data, LATAM currently operates only 6% of the flights in the market, while its competitor SKY holds 27% and JetSmart has just 7% of the existing frequencies on the Santiago-Lima route.
JetSmart's fleet of Airbus A320neo aircraft can travel up to 3,750 nautical miles on a single tank of fuel, allowing the airline to efficiently operate long-haul routes within South America.
In 2023, JetSmart's passenger load factor on the Santiago-Lima route reached a record-breaking 95%, indicating strong demand for affordable air travel between the two capitals.
LATAM presented a detailed analysis to the Chilean antitrust authority (TDLC), claiming that JetSmart's "opportunistic" bidding tactics were designed to undermine market competition, highlighting the complex dynamics between the two carriers.
Prior to the slot allocation dispute, JetSmart and LATAM had collaborated on a code-sharing agreement for select domestic routes in Chile, showcasing the intricate relationship between the two airlines.
The Chilean Competition Authority (TDLC) is reviewing the partnership between LATAM and JetSmart for potential violations of antitrust regulations, adding another layer of regulatory oversight to the dispute.
The Peruvian Civil Aviation Authority (DGAC) is currently evaluating the case and has not yet made a decision, leaving the final allocation of slots on the Santiago-Lima route uncertain.
The ongoing involvement of multiple regulatory agencies, including the Chilean DGAC, JAC, TDLC, and the Peruvian DGAC, underscores the high-stakes nature of the dispute and the potential for far-reaching consequences on the Latin American aviation market.