How COVID Will Impact The Colombian Aviation Market

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Yesterday, EasyFly, a Colombian carrier, filed for a reorganization after four months of economic inactivity. Currently, three airlines that have hubs in Colombia (Avianca, LATAM, and EasyFly) are in reorganization processes due to the coronavirus pandemic worldwide. What does this mean for the South American country? Let’s investigate further.

Avianca Getty
Three Colombian carriers are under reorganization processes: Avianca, LATAM, and EasyFly. Photo: Getty Images

When will Colombia reopen its airspace?

Colombia and Argentina are the two countries that have gathered the most headlines in South America. The Governments of both States have closed their airspaces. According to them, the international air traffic will begin on 31 August for Colombia and 1 September for Argentina. Meanwhile, the domestic markets are still shut down and have no reopening date so far.

Currently, Colombia has over 345 thousand coronavirus cases, and Argentina has over 220 thousand. Both countries shut their airspaces back when the coronavirus pandemic was starting in South America. With that in mind, we can’t be sure that the governments will reopen by the end of this month.

The International Air Transport Association (IATA) has criticized this lack of information. Yesterday, Peter Cerda, regional vice-president for the Americas, asked the Bogota city to reopen the air industry. According to the international organization, the airline’s income in the country will fall 55%, and over 38 thousand direct jobs are on the line.

It won’t be a surprise to hear Colombia push back the opening dates for the air transport unless there is an update in the next few days. Perhaps, by October, Colombia will start allowing at least domestic flights.

Easyfly
EasyFly is a Colombian regional carrier. Photo: Harold2030 via Wikimedia Commons.

Who’s EasyFly, and what will happen with the airline?

EasyFly is an airline that started flying in 2007. In 2019, EasyFly had a 5% domestic market share. It flies to 27 Colombian cities, according to its website. From Bogota’s International Airport El Dorado, the regional carrier connects to nine cities. The company has a fleet of 19 ATR airplanes.

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In terms of market share, EasyFly is the fourth competitor in the country, after Avianca (58%), LATAM Colombia (18%), and Viva Air Colombia (14%).

Yesterday, Alfonso Ávila Velandia, EasyFly’s CEO, talked about the future of the carrier. He said,

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“There have been four months of inactivity, which have caused a toll on our finances. Our fix costs continue to accumulate, and although we’ve managed to create incomes (via charter flights), these have been insufficient to cover our debts.”

So, with benefit from the Colombian law, EasyFly started a reorganization process. “If we don’t straight our path […], we’re exposed to the same destiny of many airlines that have filed for bankruptcy in the last few months,” Ávila said.

Avianca Getty
Currently, Colombia is set to open up its international airspace by September. Photo: Getty Images.

What’s the future for Colombia?

Meanwhile, Avianca and LATAM Airlines Group continue their filings under Chapter 11 in the US. Both companies are expected to shrink as a consequence of the current pandemic. The future of Colombian low-cost Wingo (that belongs to Copa Airlines) is very much in doubt. With the carrier operating at 2% of its capacity and getting rid of part of its fleet, we don’t see a viable future for Wingo.

Instead, Viva Air Colombia could benefit the most from the current pandemic. The company is currently expecting to restart operations in September. It was also the first carrier to obtain a biosafety certificate from the Colombian Government.

In May, Viva Air’s CEO, Felix Antelo, said that the carrier had the most efficient aircraft in the country, the Airbus A320. Like other low-cost carriers, if Viva Air pulls through the crisis, it will have the most to gain as legacy airlines crumble.

Nevertheless, Colombia’s airline industry will be one of the most hit in Latin America. It will be the case because of the inactivity and lack of financial help.

Are you expecting to travel to Colombia any time soon? Let us know in the comments.

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