LAN, TAM and Avianca: dominating South American aviation, but room for intra-regional growth

Recent CAPA reports have examined the South American market and its main airlines. Several features emerged consistently: despite the economic downturn, the market has been growing and sometimes strongly, albeit from a low base; the continent is dominated by three major network brands, each with cross-border presence, LAN, TAM and Avianca; these airlines and their goals will characterise the continent's growth for the foreseeable future; their focus is primarily on domestic or intercontinental networks, while intra-South American services remain limited; and geographically, economically and in almost every other category, Brazil is the key player. [3167 words]

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This report contains the following subheadings:

• A region that needs aviation
• LAN: the cross-border innovator
• TAM: Brazil's powerful network airline
• AVIANCA: now joined by TACA, dominant in Central and Northern South America
• A region still developing, with limited wealth distribution
• Why ability to pay is not a good price indicator; Colombia is most expensive
• High fares invite new entry in Colombia
• SWOT for 2010?
• Links and alliances: oneworld on top, but Star twinkling
• A healthy outlook for the major incumbents - and lots of opportunities

This report contains the following charts and tables:

• LAN Airlines– current fleet in service and on order
• LAN Argentina current fleet
• LAN Ecuador current fleet
• TAM Linhas Aereas – current fleet in service and on order
• Avianca – current fleet in service and on order
• TACA International Airlines – current fleet in service and on order
• Average GDP per capita: CIA World Factbook 2008. Average USD 10,500
• Colombia total capacity share by carrier
• Colombia: Domestic market share: December 2009
• Shares of US market, by carrier
• Avianca operating margin vs net margin: 2005 to 2009