Chilean low-cost carrier JetSmart has been granted approval to launch a subsidiary in Peru, and will restore routes to Brazil in the course of the year.
“We have decided to open up a new operation in Peru,” Estuardo Ortiz, the company’s chief executive, tells FlightGlobal at IATA’s Wings of Change event in Santiago on 7 April.
“We just got the [air operator certificate] for JetSmart to become a Peruvian airline,” he adds. “We plan to start sales within the month and domestic operations by the second part of the year.”
According to Cirium networks data, the airline currently operates flights between Chile’s capital Santiago and the Peruvian cities of Lima, Trujillo and Arequipa.
JetSmart, owned by US private equity firm Indigo Partners, announced plans to establish a Peruvian subsidiary in July 2020, and had expected approval in mid-2021.
Ortiz says that once Chile’s Covid-related entry restrictions are relaxed, the carrier will reassess its post-pandemic growth strategy across numerous markets on the continent.
“It has been almost two-and-a-half years with no growth,” Ortiz says.
Chile, with one of the highest Covid-19 vaccination rates in Latin America, still has complex and tedious coronavirus-related health requirements for inbound international passengers. In addition to full vaccination and a pre-departure negative test result, travellers are required to show proof of health insurance, and are subject to random testing at the airport in Santiago.
The all-Airbus airline, which was founded in 2017, operates a fleet of 17 A320s out of Chile and Argentina and will take delivery of its first A321 in June. JetSmart Chile offers service to 24 destinations, with JetSmart Argentina flying to 16 cities.
“We have a mission to transport 100 million passengers in total by 2028, and expand to 100 aircraft by 2028.”
JetSmart plans to expand operations in Brazil in the second half of 2021.
The airline flies twice-weekly from Chile to Foz de Iguazu, Ortiz says, just to test the market. “It was a big bet, and really just seeing if Chileans are willing to go to Brazil for vacations.”
That bet seemed to have paid off, he adds.
“As the government removes restrictions, we will be able to identify to which [Brazilian] markets we can start flying again. So I expect to be back in Brazil by the second half of the year,” Ortiz adds.
JetSmart’s Argentine subsidiary is “doing well”, Ortiz says. The company has five aircraft dedicated to the Argentine operation, and will add a sixth in May.
”It was very difficult two years,” he says “We were seven airlines in Argentina and now we are three. So there’s been consolidation in the market.” But with Argentines travelling more domestically than internationally due to currency and taxation issues, the load factors have been high, he adds. “The market continues to have a positive outlook.”
Last year, American Airlines took a minority stake in the carrier to help broaden its Latin American network following a failed joint venture with Chilean heavyweight LATAM Airlines Group. A court in Chile nixed that plan in 2019, leaving the field wide-open for competitor Delta Air Lines to step in and acquire 20% of LATAM.