✈️ Exclusive Benefits for Readers
Verified codes to save on your next trip.
Given his recurring questions about what happened to Equair which abruptly suspended operations, We review the causes that could have influenced this situation..
Writing these lines is not easy, since the feeling of sorrow is compared to what we experienced years ago when we lost the last airline that by decree was "flagged by Ecuador." Tame EP. think that Equair It will no longer fly the skies of our country, it is still difficult to assimilate and it is so sad to see how friends and great collaborators have abruptly lost their jobs..
We don't just lose an airline, jobs, but also a more alternative, where healthy competition between airlines always benefits the user.
Why did Equair close??
The 30 September 2023 The airline abruptly stopped operating, What happened?
This has been the doubt of many of you, from the media that have written to me and the answer is impossible to know for sure, since the decisions of the investors and what happens inside the house cannot be known, but there are many other factors that we can analyze and even, What happened months ago in the Colombian market leaves us with many lessons that are worth reviewing in our reality.:
- Internal risks: These risks are caused by factors within the airline, like management, operations and finances.
- External risks: These risks are caused by factors beyond the airline's control., like the economy, fuel politics and pricing.
Internal risks include:
- Market study: A wrong approach to identifying an airline's strategic market can lead to it not being sustainable over time.. Hand in hand comes the correct analysis of routes and frequencies to operate that allows the general production costs to be covered..
- Competition: Airlines that cannot compete with low pricing strategies and differentiated value in attractive services run the risk of losing customers and, eventually impacts your financial sustainability.
- High operating costs: by the industry could be considered high, which include fuel, Aircraft Maintenance, aircraft rental, airplane insurance, employee salaries, airport taxes. If these costs exceed the revenue the airline generates, can destabilize its continuity.
- Financial problems: Airlines may face financial difficulties due to internal factors, such as managing accounts with suppliers or expanding the company with new projects that require greater high-risk investment with undesirable consequences..
External risks include:
- Fuel price increase: Airlines depend on fossil fuels like oil to operate their flights. When oil prices rise, airline operating costs are also rising. If the airlines cannot increase their fares enough to cover the increase in costs, may experience financial loss.
- macroeconomic problems: Airlines can also be affected by economic problems at the national or global level.. For instance, during an economic downturn, travelers can reduce their spending on travel and leisure, which reduces the demand for low-cost flights. Airlines can also be affected by issues such as changes in exchange rates and increased taxes..
- operational problems: on certain occasions, Airlines, by choosing the type of aircraft in their fleet, may have growth limitations due to operational limitations on certain runways due to the length and height where they are located.. This generates a limited possibility of growth and entry into new markets of high demand..
Usually, the airline industry is highly volatile and airlines are exposed to many risks, both internal and external. Those that cannot adapt quickly to changes in the market or do not have the capacity to generate enough revenue to cover their costs are at risk of suspending operations..
As we can see, There are many factors that could influence, some more than others, in the specific case of Equair, but that have undoubtedly been present to determine the end of another Ecuadorian airline that joins Ecuadorian, Hour, SAN, Icarus, Air Cuenca, LAC and a few more.
What do you think were the main causes??
✈️ Exclusive Benefits for Readers
Search here for hotels ALL over the world at the best price.
Dear All
If we make history
Tame 12 aircraft
Saint and Saeta 4 aircraft
Icarus 8 aircraft
aircraft 4 aircraft
We are talking about Ecuador having a good market and competition.…now the problem in my opinion was COMPETING with AVIANCA AND LAN CHILE who have more or less 100 aircraft each.
Therein lies the problem: they entered the national routes and AUTOMATICALLY bankrupted every Ecuadorian company in due time.…nothing more.
You are talking about LATAM Airlines as a group, in Ecuador, LATAM Ecuador has 6 aircraft, no 100. Other error, Tame came to have 17 aircrafts and I do not understand the relationship of "they entered national routes and automatically went bankrupt". All the ones you mention started with domestic flights, I didn't understand.
There is a lot of spam on your page Nicolás. Your content is interesting, but it is annoying to see so much invasive advertising. Moderate it please, One or another announcement is fine but there are too many sir.
Hi Alex, Thanks for your comment, I appreciate what you told me, but this blog is maintained with advertising, If I ever find another source of financing, obviously low number of ads.
It is clear how difficult it is to manage an airline and it is not only difficult in Ecuador but worldwide, large global airlines have gone bankrupt anyway.
The question is how low cost Europe have lower rates for flights of three or more hours in Ecuador 30 minutes and flight costs 5 times safer airports fuel and personnel is more expensive how they achieve it ?
Offer and demand, In Europe, the size of demand is so large in volume that it allows airlines to operate with very low margins per passenger., but it is compensated by the number of frequencies that can operate in an economy of scale. Additional, The difference in rates and taxes there is considerably lower.
Hi Nicolas, I also published my impressions on this topic.
https://www.linkedin.com/pulse/equair-una-iniciativa-que-prosper%25C3%25B3-alexandra-giselle-chavez-o%25C3%25B1a/?published=t
Thank you Alexandra for sharing..
What happened to the Ecuadorian airline airlines??
There is no good or bad news.
Hi Nicolas, I congratulate you, it is an excellent analysis, encompasses practically all the causes of the unfortunate closure of this airline that had a great service.
Mainly I believe and personally I saw this coming from the beginning, competing with airlines like Avianca and Latam, sooner or later, if there is no strong financial hug, it will lead you to the closure of operations.
Greetings.
Thanks for your contribution Freddy, a pleasure to greet.
Because it does not include a lack of support from the DAC, which has always been a determining factor in the closure of Ecuadorian companies since it has always tended to favor foreign flag sales companies, which are allowed to lease foreign-registered aircraft. attractive routes but not other cities that do not operate
I don't understand your point of view about the DGAC. You mention foreign registration, the same thing Equair could have done if it wanted to.. What does leasing have to do with it?? Desirable routes, airlines fly where there is a market, just as Equair did flying the "desirable" ones you call. Explain your point further, which is not understood at the moment..