During 2016, air operations in Ecuador developed in a complex economic environment derived mostly from the fall of petroleum prices (one of the country’s main sources of income), the valuation of the US dollar, currency devaluations in neighboring countries, and the devastating earthquake that hit the country’s east coast in April. All of these shocks had a profound economic impact. Thus, the country’s GDP closed the year with a 2.3% drop, according to International Monetary Fund estimates; the region’s worst economic performance after Brazil.
Within this context, LATAM Airlines Ecuador transported nearly 1.0 million passengers along domestic routes; a drop of 8.3% when compared to 2015. Its consolidated traffic of passengers slowed down by 2.4%, as measured by RPK, whereas its average capacity, measured in ASK, dropped by 0.7% as compared to the previous year. Consequently, the country’s average occupation factor stood at 79.3%; a drop of 1.4 percentage points in relation to 2015.
The Company began its domestic operations in Ecuador in 2009 and since then it has been progressively positioning itself as a relevant actor in the country’s domestic routes, thanks to continuous work aimed at giving its clients a differentiating value proposal in terms of service. In 2016, it achieved a market share of 30.5%, measured in ASK, with a slight increase of 0.2 percentage points with respect to the previous year. The Company’s main competitors include the country’s flag carrier, Tame, with 40.8% market share as of this closing, and Colombia’s Avianca with 28.7%.
LATAM Airlines Ecuador operates in five cities of the country, via the Quito-Guayaquil and Quito-Cuenca routes, Quito-Guayaquil toward the St. Christopher Islands and Baltra in the Galapagos Archipelago, to which must be added the direct flight Quito-Baltra inaugurated in 2016, offering connectivity that seeks to promote tourism and national economic development.
On the occasion of the strong earthquake that impacted the country, in April LATAM Airlines Ecuador and LATAM Airlines Cargo activated their Solidary Airplane Program which is triggered under emergency situations that require the urgent transportation of humanitarian aid. Thus, during one entire month the Company transported volunteers and more than 600 tons of humanitarian aid to earthquake-ridden zones. Moreover, the Company also activated solidary flights along the special Quito-Manta-Quito route for the transportation of donations and volunteers of the Quito Metropolitan District.
On the other hand, the Company’s regular flights from/to Cuenca were affected toward the end of the month of April until mid-September because of the landing restriction on wet runway issued by the country’s aeronautic authority and by the subsequent closure of the Mariscal del Mar Airport, for one entire month, for runway repair work. This situation derived in the cancellation of nearly 149 flights, affecting LATAM and Tame; the two airlines serving Cuenca. During this period, LAM Airlines Ecuador maintained its clients continuously informed and offered commercial facilities to affected passengers. The Company ultimately was able to renew its regular flight program on September 19, following the opening of the air terminal.
Among the initiatives implemented to encourage tourism travel, the Company launched a new catalog in Alliance with national and international operators, with a broad range of tariff promotions available at travel agencies. Until December 2016 nine destinations were offered with 20 land service combinations, including lodging and routes provided by wholesale tour operators.
In order to serve the domestic routes, LATAM Airlines Ecuador used a fleet of three aircraft Airbus A319, without variations from the previous year. These aircraft are smaller in capacity, compared to the A320 and allow adapting to demand conditions in this market. Additionally, they are equipped with LATAM’s modern on-board entertainment system, which offers the best travel experience to passengers.
In line with industry trends and the development of the digital experience at all stages of the trip, LATAM Airlines Ecuador transformed one of its commercial Quito offices into a kiosk, with three self-service modules. In each module the passengers can access www.latam.com to perform searches, book and pay tickets, manage LATAMPass accounts and inquire about products and services.
In is worth highlighting that in 2016 LATAM Airlines Ecuador was distinguished with the eCommerce awards, as an electronic commerce leader in the tourism category, an initiative of the eCommerce Institute co-organized by Ecuador’s Chamber of Electronic Commerce; and the eDay Award in the Large Corporations category, the latter of which is awarded by the Guayaquil Chamber of Commerce. Both distinctions confirm and consolidate the Company’s leadership in the field of electronic commerce.
Additionally, in 2016 LATAM Airlines Ecuador became worthy of the Recognition for Operational Security Management awarded by Mariscal Sucre International Airport. Among others, the Company also received recognitions from Ecuador’s Red Cross and the Corps of Firefighters of Quito’s Metropolitan District Firefighters, both for transporting humanitarian aid to the areas affected by the earthquake as well as for transporting firefighter volunteer to such areas
1,0 millions of passengers
31% market share