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Flybondi leads and consolidates low cost model in Argentina

Company founded by Swiss aviation executive has carried 2 million passengers and has almost 10% market share in the domestic market

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The flight FO5432 that took off shortly after 3 pm from Cordoba Airport to Puerto Iguazu on January 26, 2018 can be coined historical. More than Flybondi‘s debut, it was the first flight of a low-cost airline in Argentina, a country that for decades saw its commercial aviation dominated by state-owned airline Aerolineas Argentinas and had no options for flying at affordable prices.

Under the motto “Freedom to Fly”, a phrase stamped on the fuselage of the company’s five Boeing 737-800 airplanes, Flybondi surpassed the mark of 2 million passengers in less than two years, with almost 300 thousand of them traveling for the first time by plane. Figures that rank the company as the third largest in the country, with a domestic market share of 9%, behind only Aerolineas Argentinas and Latam.

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The speed with which everything happened has to do with the deregulation in the aviation sector in the country, which allowed the entry of new airlines and ended the tariff minimum, but also with the appetite of Flybondi’s creator: Julian Cook. The Swiss, who founded Flybaboo in 2003 and was director of the leasing company AviaSolutions/GE Capital Aviation Services, landed in the country in 2016 alongside well-known aviation figures such as Michael Cawley, former Ryanair, and Mike Powell, former WizzAir. In their pockets, $ 75 million of initial investment, mainly from Cartesian Capital Group LLC and Yamasa Co. Limited.

The company’s model follows what the low-cost manual suggests: lean structure, standardized fleet with maximum capacity, unconnected routes and time optimization, extra paid passenger services, operation at secondary airports.

The results continue to show the growth trend, which shows that the business model is successful

Sebastián Pereira, CEO at Flybondi.

Pereira took office in February this year in place of Julian Cook, who became vice-president of the company’s Board. In an interview with LABS he talked about Flybondi’s plans for Argentina and Latin America.

One of Flybondi’s innovations in the Argentine market is connecting cities without the need to connect to larger centers such as Buenos Aires. Thus, it is possible to fly directly from Tucuman to Rosario or from Mendoza to Puerto Iguazu. As a result, the company has conquered the tourism-oriented passenger who previously only traveled by bus, as well as the smaller cities looking to expand as tourist destinations. Today, it operates in 14 Argentine cities.

“We have a long-term commitment to our country, so we are committed to continuing to generate connectivity, opportunity and accessibility for thousands of people. Air connectivity can be an ally of the provinces, as it drives many activities that contribute to regional economies and job creation”, says Pereira.

From El Palomar

Before flying, Flybondi wanted to escape from Buenos Aires’ main domestic airport, Aeroparque. As easy as it was to be close to the central area of the city, the cost of operation would be too high for a low-cost airline, not to mention that it would not have the agility and flexibility it planned for its flights from the Argentine capital. The alternative presented was El Palomar, an airport located 14 kilometers from downtown Buenos Aires, which functioned only as a military air base and which, at times, had received commercial flights as a result of work on Aeroparque.

With the support of the Argentine government, which has invested in improving the runway and yards and building a passenger terminal, Flybondi has been able to make the airport its main hub. In the small building, there is what you need: check-in positions, a departure lounge, immigration areas for international flights and baggage claim. No boarding bridge. From the terminal, the passenger goes straight to the airplane’s door. Faster and cheaper.

“El Palomar is Flybondi’s first home, where we started connecting Argentina and is our main airport. For us, it is very important”, summarizes Sebastián Pereira. From El Palomar, the airline operates an average of 12 daily flights to 11 domestic and international destinations. Even more flights would be leaving the airport, if it were not for a court order, which prohibited takeoffs and landings between 10 pm and 7 am, following a lawsuit filed by residents living near the terminal. With this, Flybondi had to adjust the route network and reduce the use of airplanes, which goes against one of the pillars of low-cost companies, which is always flying, all the time.

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“We must understand that the magnitude of this decision is national. It’s a decision based on a neighbor’s right to rest only to the detriment of the right to work, to be able to transport at low cost and even to improve the quality of life for thousands of people”, criticizes Flybondi’s CEO. “The most worrying thing is that it directly affects thousands of workers and jeopardizes the sustainability of the company’s business”, adds Pereira, who has the Argentine government by his side to reverse the decision.

To Brazil

While awaiting developments on El Palomar, Flybondi is taking the opportunity to expand its routes, now targeting the international market. After Asuncion in Paraguay and Punta del Este in Uruguay, the destination is Brazil. In October, the company debuted in the country with a flight linking Buenos Aires and Rio de Janeiro, and in December it will connect the Argentine capital to Florianopolis. The demand assessment was quickly positive as the company increased the number of weekly flights from three to four on both routes. In addition, it announced in late October that it will start flights in March 2020 between the Argentine capital and the Guarulhos airport in Sao Paulo.

We have high expectations for this new market, not only for its size and characteristics, but for becoming a low-cost alternative for all Argentines and Brazilians.

Sebastián Pereira, CEO at Flybondi.

In the route distribution conducted by the government in 2017, Flybondi has applied for and obtained authorization to operate to 13 destinations in Brazil, such as Belo Horizonte, Brasilia, Fortaleza, Salvador, Recife, Curitiba and Porto Alegre, in addition to those that already operate and/or which confirmed a start date.

Flybondi in numbers:

Fleet – 5 aircraft

  • 5 Boeing 737-800

Destinations – Total: 17

  • 14 in Argentina
  • 1 in Brazil (+2 starting)
  • 1 in Paraguay
  • 1 in Uruguay