Inside view on South America’s Bizav market
Although on a different pace when compared to the likes of the US and European market, the business aviation industry in South America has a rhythm of its own, strongly determined by the current economic state. And this has been the case at least during the past 10 years. Chile is a great example, arguably the most stable country in the region from an economic and political standpoint; it has witnessed a steady increase in the number of private owned jets and in the business aviation traffic, both domestic and international.
Furthermore, while specialization in a certain business line is the trend in the region, one aviation company has opted, from its beginnings in 1991, to diversify its services. Aerocardal is one of the largest bizav company in Chile and South America, with a total fleet of 10 aircraft (jets, turboprops and helicopters) and has a modern private terminal in the region based in Santiago International. The company is a member of the Air Elite Network.
Having a strong and open aeronautical authority as the Chilean DGAC, the equivalent of a Civil Aviation Authority, which has an “open skies” agreement for the business aviation industry and almost all major commercial carriers, sets the cornerstone for sustained aviation growth for years to come. This, alongside the economic and political stability, is why major airlines have decided to regularly fly to Santiago; KLM, Air Canada, Qantas, the US “big three”, Air France, Alitalia and more recently British Airways.
At a regional scale, one sole economic driver accounts for the majority of the growth in the private flight industry: mining. Peru and Chile and in a distant third place Argentina, thrive on the success of this industry, meaning that leading executives need to travel fast and privately to the different mine sites. Furthermore, especially in the case of Chile, diverse economic activities have raised the amount of international private flight traffic due to the “export” of businesses in neighbor countries such as Peru, Argentina, Ecuador and Colombia, thus generating the necessity of private travel.
The previous has caught the eye of world-leading private jet aircraft manufacturers; Cirrus, Pilatus, Gulfstream, Cessna and Hawker, who have worked out representation contracts with the region’s best operators. Aerocardal, for instance, represents Cirrus, Pilatus and Gulfstream in Chile, and it’s unofficially discussed that they could also manage the representation of one or more of these manufacturers in other neighbor countries. The increase during the past 10 years from roughly 6 private jets to 25 justifies these companies’ high interest in Chile as a hub to develop their presence throughout South America.
And then Brazil, the forgotten giant where companies such as Cirrus, used to sell 30 planes annually, have witnessed a massive decrease of market share due to economic and political instability during the past three years or so. But Brazil is in a class of its own, accounting for the largest private air traffic in the region and as the sole producer of executive jets in South America, with Embraer leading the way; it will always be a major player due to its massive size and diverse industries.
Overall, South America has great potential for growth, but its huge dependency on the political and economic variables makes the domestic private flight market too volatile. It has happened in the past that once uncertainty strikes, executives opt to fly commercial in order to cope with immediate budget restraints. It is a young market developing on the go, and following a model like the one prevailing in Chile makes sense; where private and public meet halfway.
Written by Felipe Reisch, Communications Manager, Aerocardal.