What about airlines in Colombia?

Today we analyze whaté This is what happens with Aerols.ídaughters of Colombia that in the period from one toñO, there are three that have ceased their operations.

GCA – Greater Colombia by Aviación was the first the first quarter of 2022, be itó Viva Air in February of this toñor and finally Ultra Air becameó in the úlast airíColombian line to collapse and suspend its operations.

But, ¿thaté Eastá passing with the aerosolsídaughters of Colombia? It is a great question that has been asked on social networks and múMultiple opinions have been generated regarding the reasons that have led to these closures.. From political factorsítics to instability generated by some airíThese are among the reasons thatás se repiten, ¿thaté it really happens?

¿Becauseé the airlines closeíNeas in Colombia?

Although there is no single correct answer, Today I am going to share my opinion with youón staff based on previous experience covering the industryéworld area by 16 años. This is what I think isá going:

1. Competition: The industry toéarea is highly competitive, and the aerosolsíBusinesses that cannot compete with low prices and an attractive service offering risk losing customers and, possibly, have to close.
2. High operating costs: The aerosolsílines have high operating costs, which include fuel, Aircraft Maintenance, employee salaries, airport taxes and fees. If these costs exceed the revenue generated by the airlineínea, can go bankrupt.
3. lack of demand: If an aerosolínea can't attract enough passengers to fill its planes, tenderá difficulties in generating income and covering operating costs.
4. Financial problems: The aerosolsícompanies may face financial difficulties due to external factors, like a recessionón econónot a pandemic, or due to poor managementón internal financial, like the accumulationón excessive debt or investmentón in expensive but unprofitable projects.
5. Fuel price increase: The aerosolsíLow-cost lines often rely on ffuelsósiles like petróleo to operate your flights. When oil pricesóleo increase, airline operating costsínot too oldén increase. If you spray themícompanies cannot increase their rates enough to cover the increase in costs, can experience péfinancial losses.
6. Problemas macroeconómonkeys: The aerosolsínot too oldén can be affected by economic problemsómonkeys at national or global level. For instance, during a recessionón económica, travelers can reduce their spending on travel and leisure, which reduces the demand for low-cost flights. The aerosolsínot too oldén can be affected by issues such as changes in exchange rates and increased taxes.
7. operational problems: The aerosolsíLow-cost airlines typically operate with a limited fleet of aircraft and personnel., making them vulnerable to operational problems such as flight delays and cancellations. If operational problems become frequent, can negatively affect the reputationón of the aerolínea and its ability to attract and retain customers.
8. Usually, the industry toéarea is highly volátil and the aerosolíit is a sinán exposed to many risks, both internal and external. Those who cannot adaptádue to changes in the market or that do not have the capacity to generate enough income to cover their costs, they run the risk of bankruptcy and stopping flying.

HIGH is pronounced

La Associationón Latin American and Caribbean Transport Aéreo – HIGH expresó your concernón about what happens in Colombia, where the following challenges stand outíyou for the aerosolsínational lines, coinciding largely with what was said in the previous points:

• Rising fuel costs, which represents the 50% of operating costs.
• Rising sun costséstatic due to inflationón of 13,28% to February 2023.
• Strong devaluationón that approximately impacts the 65% of airline operating costsídenies.
• Different rates and contributions that are updated with inflationón, How is the airport tax? (payment made by passengers to the airport for the passenger's use of the terminals atéareas that are collected by the airlinesídenies), Stamp duty, navigation servicesón aérea, among others.
• increase of almost 4 times sales tax (IVA), which is in 19% of the ticket value after a reductionón temporary during the pandemic that lowered itó al 5%.

¿Whaté do you think? I additionally share another text where I expandíor is this informationón:

¿Becauseé an airline goes bankruptínea?