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The Government of Ecuador has created new incentives for airports managed by the DGAC with the aim of promoting the use of these air terminals.
The airports of Esmeraldas, Manta, Salinas, Santa Rosa, Catamayo, Latacunga, Sour Lake, San Cristobal, Coca, Macas, Shell Mera and others, have from this week with new incentives directed towards airlines.
In order to create new routes and increase frequencies to those already existing in these terminals managed by the General Directorate of Civil Aviation of Ecuador – DGAC, a series of incentives have come into force to stimulate supply and demand.
The incentives that have been approved by the National Civil Aviation Council – CNCC under Resolution 013-2018 are the following:
Commercial Incentive Plan for airport users (Leases)
- Reduction of up to 40% in collection of rental fees for tenants at airports managed by the DGAC.
- Maintain related services at airports such as:
-
- Coffee shops / Stores
- palletizers
- Temporary warehouses
Incentive Plan for New Regular Operations
Objectives
- Ambitious incentive plan to attract new air operators.
- Promote greater supply and better services for users.
- Stimulate the development of the commercial aviation sector in the network managed by the DGAC.
Profits
- Discounts on operational rates:
- Landing
- Lightning
- flight protection
- Parking lot
- The discounts apply for a period of three years and range from 30 al 70 % discount on operational fees.
Characteristics
- New Domestic Operations
- Minimum 3 routes.
- Use an airport managed by the DGAC as an operations center.
- New International Operations
- The discount varies according to the number of frequencies.
- The airline must operate to and from an airport managed by the DGAC.
- Low terminal usage fee from USD 19,50 a USD 14,00.
- Increase of frequencies to the airports managed by the DGAC
- The discount applies to the frequencies that are increased.
- The DGAC will be in charge of defining the application of this discount.
- General Provisions for new operations
-
- The operation must be for at least 3 years or alternative exit costs will be generated.
Requirements
- International Operation
- Regular Operating Permit
- Current AOC
- The route must have as destination an Airport Managed by the DGAC.
- There is no minimum number of routes to operate
- The discount varies depending on the number of weekly frequencies to operate; 1-3, 4-7, but from 7.
- The discount does not apply to airport fees.
- operate minimum 3 years, early departure will generate alternative costs.
- Domestic Operation
- Regular Operating Permit
- Current AOC
- The discount applies to all DGAC airports.
- The operator must have its operations center in a DGAC airport. (HUB)
- The operator must operate at least 3 domestic routes. (May include Quito or Guayaquil)
- The discount does not apply to airport fees. Operate minimum 3 years, early departure will generate alternative costs.
News of the DGAC Airports
Es conocido que los aeropuertos de Latacunga y Manta han visto reducida su demanda por diferentes factores y los otros aeropuertos administrados por la DGAC no han logrado «despegar» por falta de oferta y competencia.
With this as initial background, the Ecuadorian Government must cover the deficit generated by these airports due to the lack of users.
From the 2013 al 2017, these airports have generated a negative result of more than $13 millions of dollars.
Factors such as the earthquake that affected Manta and the tame effect, which reduced its offer of seats to all DGAC airports, going from 1.6 million seats in 2013 just 711 thousand in the 2017, have had a negative impact on these numbers since the year 2016 To the date.
The airports of Latacunga, Manta, Coca and San Cristóbal represent the 69% of revenue from the DGAC airport network.
The general offer of passengers decreased from 1.830.220 at 2013 a 1.632.129 at 2014 which corresponds to -10.82%, at 2015 decreased by a -5.25%, at 2016 in a -13.25%, and finally in the 2017 on -27.46%.
Similarly, the demand for passengers decreased from 1.151.125 at 2013 a 1.149.308 al 2014 corresponding to -0.16%, at 2015 decreased by a -7.51%, at 2016 -19.03%, and in the 2017 -15.86%.
The new incentives
As we reviewed above, the new incentives are intended to stimulate supply and demand, with reduced prices for current airlines that want to increase frequencies or new ones that want to start flying.
Thought of strengthening the DGAC airports and making them competitive against the concessionaire airports of Quito and Guayaquil, The authority will apply the following discounts for 3 years and based on the frequencies to operate:
New domestic operations
new operations
Frequencies increase
Investment in airports and navigation
in the last 10 years, the Government has made large investments to position the country as a benchmark in modernity and security in the region.
With an investment of more than $364 millions of dollars, It is time for the state network of DGAC Airports to begin its recovery and these incentives have a clear objective to achieve it.
Projection
After losing more than $1 million dollars in revenue compared to 2017 al 2016, it is expected that the 2018 this number increases, especially, due to the null commercial activity of the Latacunga Airport.
With the analyzed data and with the new incentives, which are also added to JET A1 jet fuel subsidy, It is expected that with growth (bass) of the 3%, year 2022 return to the income level of the year 2017.
Of course, this plan is thinking so that the growth is superior to the 3% annual, so the income could be achieved earlier with the arrival of new airlines such as Viva Air, Aeroregional, Airplanes and other potential.
Now, It only remains to wait to see the positive results of these new benefits that will be translated into benefits for the user and a reduction in expenses for the DGAC.
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The famous plan unveiled
Nothing new
Minimal reductions of the rights that correspond to the DAC is not an incentive as Edwin and Pablo say
Play with the money of the people, that is, the state by subsidizing FUEL THAT IS NOT PROPERTY OF THE DAC if it is an abuse and disadvantage for Quito Guayaquil
Create incentives of this nature to force operations in white elephants Salinas Santa Rosa had, among others, if it is unconstitutional to create privileges for which it was never able to operate the Quito and Guayaquil airports with the same income that quiport and tagsa operate today with the investment results and world awards
That is shame
Nobody says anything
I agree with the criteria of all those who comment on this note
The DAC must by vonrnzsr in reducing its expenses vote unnecessary personnel since they are items that are not justified infrastructures of each track and region extremely high in bureaucratic personnel
Those airports like SALINAS should never have thought about expanding and spending funds that were needed elsewhere
It is true that the DAC owns the land that actually belongs to the state, it leases it so that the operators can invest, build and maintain the air facilities and charge them extremely high rates that dignify unaffordable costs in these operations.
Even when the DAC and CNAC authorities do not live the reality
Dear Nicholas, it is very interesting the results that some of the airports that you indicate show, but I don't think there is a real interest in using second-tier airports to use them as a connection hub unless the market conditions exist to be able to do so. In other words, passenger traffic and service facilities to make it profitable and attractive for aviation companies., therefore the lack of passenger traffic at these airports.
A clear example of the errors in this matter was the creation of the Salinas airports, having the Guayaquil airport less than two hours away and the Latacunga airport which is also close to the Quito airport, without the size of each of its markets justifying the enormous expenses in maintaining them, hence their losses for the State and for the DGAC.
The market can be generated, but everything depends on having strategic allies – airlines that want to risk, There is so much to do.
State incentives are really a joke, It is very unlikely that an airline would want to operate in a country with the highest airport costs in Latin America., even with the mentioned discounts. If we can be sure of one thing, it is that behind all these plans to attract foreign capital there will always be the dirty hand of politicians who will wait if they slice into 3 years.
If the country really wanted to exploit its white elephants like the Tena and Santa Rosa airports, should offer the concession of the airport to an airline at least 10 years, that they take charge of the maintenance and operation of the airport, that they do not pay taxes for this period, the fuel incentive should be 4 years decreasing by 10% every year, but the only condition they should demand is the exclusive hiring of Ecuadorians; more employment, more development, better quality of life and finally more people paying their taxes.
Aviation companies are not very interested in the number of passengers in the city where an airport is located, but the location and the cost to be able to use it for connections, as is the case of the airport in El Salvador. In Europe and the United States, low-cost airlines have proliferated precisely for this reason, the cost of operating second-order airports such as Fort Lauderdale in Florida or Newark in New York, and Ecuador should take advantage of what Colombia or Peru do not have, new airports with runways 2500 mts. such as those of Tena and Santa Rosa, to offer them to airlines as an operations center with all the help of the state and zero taxes for a time that allows them to be attractive for investment; the operation of 9 planes would generate about 1000 job.
very good information, Let's hope it materializes. I am an operator at an airport controlled by the DAC with a small company and it is not possible that a high percentage of the calculation of the cost of the flight hour is the rental of the facilities that the company itself builds., As people who are in aviation know, one of the functions of the DAC is to promote aviation, Other fields where work should be done would be to lower taxes to be able to enter more aircraft, it is not possible to pay the 40 % of the value of the cost of the aircraft in taxes, as well as the certification processes should be more flexible, although the ICAO standard and the subscribed countries must comply, but the essence of compliance with the certification is for international operation.
Good information Nicolás and I hope the plan works so that there is more activity in these airports that are in low operational figures. in addition, the main impulse that Ecuador needs is a solid economic growth since without this aviation is affected very quickly.
Let's wait for the results in a few months, we trust that they will be very good for local aviation.