JetSmart seeks to fill the void in Viva and Ultra

in Interview with Portfolio Estuardo Ortíz, President of JetSmart Announced the start of code sharing with American Airlines connecting various destinations from June 1st. In addition, he talked about the progress the country has made to start its work in the local network.

(See: The increase in value-added tax on tickets is overshadowed by the recovery of the aviation market.)

What is the probability of code sharing with American Airlines?
​
We have reached a historic milestone in regional aviation with the announcement, for the first time, of a codeshare agreement between a low-cost carrier, such as JetSmart, and a legacy area carrier, such as American Airlines.

This is the beginning of a program that will continue for the next several months. As of June 1st, four of our domestic network destinations in Chile are already sold out, and connect to American Airlines’ global network. And although this is the beginning, we will progress in other countries.

How will the process be in other countries?

Later, we will activate Peru and Argentina. We expect to be able to obtain the Operational Certificate from Civil Aviation in the last quarter of this year and also to start operating at the end of this year in Colombia and I hope to introduce this codeshare during the first quarter of 2024 for Colombians.

How is the process progressing with civil aviation?

very good. We agree with the work program that we are jointly developing.

As an operator, we have to provide operating documents, maintenance and safety manuals, etc. After that, there is a process where the aircraft is presented, and the registration is registered in Colombia. So all of this is progressing according to schedule.

We have so far applied for slots in the month of May. It is an essential matter to have a space at Bogota Airport.

What are your expectations for slot machines in Bogota?
The market in Colombia is in a phase of readjustment due to the movement that has occurred in recent months and that should end with a positive scenario for the traveler, it is the most important thing.

We require the time slots that we need to be able to operate the fleet plan that we’ve put in place, and there’s a technical evaluation and decision on that. Right now we’re doing a good job, but it’s something that makes us very attentive to be able to get the spaces that we’re looking for, that the consumer has more options, if they want to fly at 7:00 in the morning they have three or four options of airlines, Not just one or two options.

(See: When will airlines overcome the losses left by the pandemic?).

What are those lines you want?
Nothing different than usual, start trading early in the morning. The hours of greatest demand are early, when the airport is busiest, ie between 5:00am and 8:00am, so it is very important to run these balances.
In addition, if you do not offer the customer more supply at times of high demand, this can lead to higher prices.

The key to the low cost model is to be able to use the aircraft for more hours of the day, and this is an important principle. We operate a fleet of Airbus NEO A320 and A321 aircraft and what’s good about the new fleet is that it can be used with more reliability, which allows us to produce more seats per day, which translates to a lower price.

How many aircraft do you expect to integrate into the Colombian market?
​
We have a vision of reaching 100 aircraft and carrying 100 million passengers by 2028. Colombia is a market that will allow us to give it a big push to achieve this vision.

We have ordered 27 routes from civil aviation and we are monitoring the performance of these markets in order to determine the initial routes and aircraft needed.

How do you see the issue of taxes in the country?

Our plan and commitment are firm with the state. We know clearly the market, the tax terms of the taxes and the rates that are in Colombia, even considering it’s a market that JetSmart wants to be.

However, I think that in the region we have a very high tax scheme, because it was a service for people with high incomes or for companies, but this is not the reality today. Business models like ours allow us to sell $10 tickets but the taxes end up being more than the ticket, it’s very common for a passenger to end up paying 70% taxes, which doesn’t make sense.

(See: Take the airline alliance between JetSmart and American Airlines.)

Due to the nature of its model, two low-cost ones left the market. What do you think that?

I think the situation that happened between Ultra and Viva has nothing to do with their business model. The low cost model is the fastest growing in the world and allows you to sell low fares so more people can fly. We’ve been through these same fuel situations, from the pandemic, but we have Indico Partners and the way they overcame the situation has been a success. We don’t think about market participation, but conditionality, so the model is financially, operationally and commercially sustainable.

Are they going into the space left by Viva and Ultra?

There is space we want to take advantage of. We want it to end up being a competitive, open and transparent market where we can compete against airlines established in Colombia. We see this as a very good opportunity and continue to progress at a good pace.

(See: These are the tracks Wingo will hike between June and August.)

Paola Galano-Balaguera
Journalists portfolio

ÓMAR G. AHUMADA
Journalists portfolio