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ECONOMY | 16-02-2019 09:02

JetSMART kicks off price war as it enters Argentina’s low-cost market

CEO Estuardo Ortiz says ‘flight for a peso’ promotion is sign Chilean firm intends to shake up competition.

JetSMART airlines is entering the competition in Argentina’s fledgling lowcost air travel market with a host of new routes – though it’s the prices that have drawn attention.

The Chilean firm officially launched in the country with a bold promotion on Tuesday, offering up to 5,000 tickets for any of its 12 round-trip domestic flights for practically nothing: 1 peso per passenger, with fees included, through midnight on Friday.

Heavy traffic inevitably followed. JetSMART, a part of the US conglomerate Indigo Parters, said it sold 54,735 lowcost flights in its first 24 hours of online sales, the company reported Wednesday. Flight prices outside the promotion start at 299 pesos, executives confirmed. Beginning in April, new JetSMART routes will connect passengers from Buenos Aires to Mendoza, Córdoba, Neuquén, Bariloche, Iguazú, Salta and Tucumán.

At a press conference on Tuesday, JetSMART CEO Estuardo Ortiz said the company was committed to extending accessible flights across the continent.

“JetSMART was born here with a clear vision: to establish an airline that offers low prices to all of South America,” Ortiz said. “It’s an extensive continent, and a great majority of its people are in the middle class. High prices have been prohibitive to travel for decades.”

The company, which was recently approved as an Argentine airline after receiving a Certificate of Operation of Aero-commercial Services (CESA), already has a local executive team, pilots and crew to start domestic operations from April. Transport Ministry Resolution 5/2019 has granted the company 261 routes for both domestic and international service.

COMPETITION

Fellow airlines like Flybondi and Norwegian have rolled out low-cost flight options since price floor restrictions on round-trip flights were eliminated last August for tickets purchased 30 days in advance. Traditional players like stateowned Aerolíneas Argentinas and Latam have come up with their own promotions and economy options to adapt to the new competition too.

As cheap commercial options flood the scene, however, labour unions have fought against resolutions that would pull foreign pilots in with Aerolíneas Argentinas to cut costs. Ortiz said Tuesday that JetSMART was keen to work with local talent, saying its operations in Argentina would employ Argentine pilots.

Ortiz said he was not discouraged by the political rifts surrounding budget airlines in Argentina.

“We face economic and political issues in any country that we enter. But we believe that our products and services can have a great social impact but expanding affordable travel and improving regional connectivity.”

Even on the country’s crowded runways, Ortiz thinks there’s a place for JetSMART. “We believe that there is space, there is room to grow in the market in a new, accelerated way,” Ortiz told the Times.

While the airline will be operating solely in Buenos Aires for now, new routes will open up in the coming months. Connections between Córdoba and Salta and Córdoba and Neuquén routes will begin operating in April, followed by Mendoza and Neuquén in May. Flights connecting Bariloche with Córdoba and Mendoza will be up and running in June, airlines representatives added.

Ortiz said low-cost flights will soon spread to new destinations across the continent too, including Chile and Brazil. “Each city in South America should have low-budget access,” he said.

Brand new Airbus A320 planes will be used for all of Argentina’s inaugural JetSMART routes, Gonzalo Pérez Corral, JetSMART Argentina’s General Manager, also announced Tuesday

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Anna Laffrey

Anna Laffrey

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