How JetSMART Capitalized On The Pandemic To Expand In South America

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Summary

  • JetSMART thrived during the pandemic while other airlines in South America struggled to survive.
  • The airline successfully expanded into Peru and Colombia, filling a gap left by collapsed carriers.
  • JetSMART plans to focus on future growth in Colombia, Argentina, Peru, and Chile after overcoming pandemic challenges.

JetSMART is much like any other ultra-low-cost carrier in the South American market, one of many that has emerged in the past two decades and has thrived off of serving high-demand leisure routes across the continent. When the COVID-19 pandemic struck, however, JetSMART, much like other budget airlines, was in dire financial straits created by the lack of passenger volume.

As a result, many carriers were forced to shut down or went bankrupt as a result of the adverse market that was especially damaging to private low-cost operations. JetSMART, however, not only survived but also thrived in this environment and has grown rapidly since the onset of COVID, entering markets across the continent.

Photo: oscargutzo | Shutterstock

Just this past week, JetSMART launched its new operational base in Bogotá and began operating ultra-low-cost flights in Colombia for the first time in over a year. With such impressive success in the face of immense adversity, it is challenging to understand exactly how the carrier was able to achieve these results.

Fortunately, the carrier’s founder and CEO, Estuardo Ortiz Porras, took the time to share how he, alongside the airline’s parent company Indigo Partners, was able to overcome the pandemic’s challenges in an exclusive interview with Simple Flying. The airline executive was also able to provide some insight regarding the airline’s long-term growth strategy.

A challenging environment

Throughout 2020 and 2021, airline after airline went under in South America, a pattern of dissolution that has still continued in the years following. Prior to the pandemic, there were seven different carriers operating in the Peruvian market, after which time that number had dwindled down to just two survivors.

A JetSMART Airbus A320 at Lima Airport

Photo: Markus Mainka | Shutterstock

In Colombia, the story was similar, with the collapse of two major carriers, Ultra Air and Viva Air, leaving a massive void in the market. Ultra Air ceased operations in March 2023 after just over a year of flying, and Viva Air filed for bankruptcy in the same month after having been in business since 2012.

The nature of the South American aviation market had drastically changed in a way that worked to JetSMART’s advantage. In comparison to the years before the pandemic, there were 12 fewer airlines operating on the continent, many of which were ultra-low-cost carriers.

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A period of rapid growth has cemented the airline’s position as a major player in South America.

JetSMART’s moves

JetSMART, which had already been operating well-established networks in both Argentina and Chile at the time, set its sights on expansion into the Peruvian market in the years following the pandemic. In 2022, upon noticing the lack of competition in the market, the airline launched its third subsidiary, JetSMART Peru, which soon became one of the nation’s leading low-cost airlines. Regarding the airline’s rapid expansion into different markets, Ortiz had the following to share regarding the airline’s shift in strategy:

‘The whole strategy changed because what made sense originally, to have a singular airline and make it grow and scale and then enter other markets, had shifted. When you see the map following the pandemic, you realize that the domestic markets were recovering much quicker.”

JetSMART Peru has continued to see success throughout its two years of operations and has grown to operate four different aircraft with a network of ten different destinations. The airline is still set to continue growing its route map, with new flights from the carrier’s Jorge Chavez International Airport (LIM) base in Lima to Quito and Guayaquil in Ecuador launching this spring.

JetSMART

Photo: JetSMART

Once having successfully established a foothold in the Peruvian market, JetSMART set its sights on the bigger prize: the Colombian market. As the CEO was quick to tell us, the most important domestic market on the continent outside of Brazil was the Colombian one, and the airline previously avoided entering the nation due to the threat of high competition from other carriers.

Colombian operations

However, the airline’s leadership team has seen an opportunity for growth amid a low-cost vacancy in the market. Just yesterday, on 14 March, the carrier launched its Colombian operation, which now stands as the fourth nation in which JetSMART is certified as an air operator.

The airline has yet to commence flights within Colombia, with the first services from Bogotá slated to depart on 24 March. The airline started selling tickets for these flights back in January, and JetSMART’s service launch has been long-awaited. The carrier is beginning to fly out of Terminal 2 out of El Dorado International Airport (BOG) in Bogotá, the former domestic terminal. It also aims to launch flights from Medellín in the coming years.

JetSMART-1

Photo: JetSMART

As the company’s leader and founder was quick to point out, the airline’s opportunity to establish a massive presence in Colombia cannot be understated. In the interview, the CEO discussed his motivations for entering the Colombian market as follows:

“It’s just a much larger opportunity and a much larger market, but also very competitive, something that changed last year. The market today does not have any low-cost presence. We knew Colombia was going to change, and we started the air operator certification (AOC) process back in October 2022.”

The executive pointed out that by April 2023, there were only two airlines operating in the domestic Colombian market, neither of which was a low-cost carrier. With these opportunities in front of them, the Indigo Partners-backed carrier decided to move forward.

The future

The company is now prepared to shift focus towards future expansion and will focus its attention on capitalizing on its new strategic positions not just in the Colombian market but across Argentina, Peru, and Chile as well. The airline currently operates a fleet of over 30 aircraft, flying to 33 destinations across Latin America.

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The codeshare currently includes only four destinations in Chile, but they will add more in the future.

JetSMART was undeniably able to play its cards right when the pandemic came around, part of which can be attributed to the management of successful low-cost industry titan Indigo Partners. However, as Ortiz put it best:

You can’t waste a good crisis.

The airline’s CEO commented on potential expansion in Argentina, with a new regulatory environment proving favorable to the carrier in the early stages. The administration of Javier Milei, who came to office boldly defending policies of economic liberalization and a reduction in regulatory control, has granted JetSMART provisional approval to fly routes it had not been able to before.



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