The Colombian airline market has gone through what IATA's Peter Cerda, regional vice president for the Americas, calls a “perfect storm” in recent years. 

But as flag-carrier Avianca finds its footing following a Chapter 11 bankruptcy restructuring and international airlines show increasing interest in the South American country, a sense of optimism is in the air.

Avianca emerged from Chapter 11 in 2021 with a leaner, more simplified business model and appears to be turning the corner financially, a sign the Colombian market is rebounding. The company earned a net profit of $85.8 million through the first nine months of 2023, reversing a net loss of $312.6 million for the same period in 2022 and giving the carrier reason to believe its post-bankruptcy, post-pandemic strategy is working. In his final earnings call as Avianca CEO in late 2023, Adrian Neuhauser said the “new business model is based on a cost-driven strategy [aimed at] driving higher load factors” with increased emphasis on point-to-point flying.

Frederico Pedreira, a speaker at Routes Americas 2024 in Bogota, moved up from deputy chief executive to president and CEO of Avianca on Jan. 1, while Neuhauser, who oversaw the transition through Chapter 11, will stay with the company as executive vice chairman of its board.

Last year saw two Colombian ULCCs fail: Ultra Air and Viva. Avianca unsuccessfully attempted to acquire Viva, but was effectively stopped by conditions placed on the proposed merger by Colombian regulator Aerocivil.

Cerda notes the market is in “a period of tremendous growth” even with the collapse of the two airlines. ”Airlines like [Copa Holdings’ Colombian subsidiary] Wingo, Avianca and others stepped up and picked up the void left by these two airlines,” he says.

In fact, more than 20 airlines operate in the domestic market, though many of these are small, regional carriers. “Undoubtedly Colombia is one of the most competitive markets in the region, and evidence of this is not only the presence of over 20 airlines operating in the market, but also the arrival of new competitors” from outside Colombia, Avianca says in reponse to questions from Aviation Week Network.

Chilean ULCC JetSmart has opened a Colombian subsidiary, and Emirates Airline has gained permission to fly to Bogotá’s El Dorado Airport (BOG).

JetSmart Colombia gained an air operator certificate (AOC) from Aerocivil in January and is launching service on seven domestic routes this month. The new Colombian affiliate is the fourth in JetSmart’s portfolio, which also includes carriers in Argentina, its home base of Chile and Peru.

Emirates, meanwhile, received permission in February from Aerocivil to operate fifth-freedom flights between Dubai and Bogota with a stop in Miami. The United Arab Emirates carrier will fly the route daily starting June 3 with a Boeing 777 with capacity for 354 passengers. Colombia will become the third South American country served by Emirates for passenger flights—the airline now operates to Argentina and Brazil.

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“Colombia is becoming a very popular market for business and travel and tourism, which is very important,” Cerda says, noting growth is occurring beyond just Bogotá. “We see significant capacity strengthening in places like Cartagena and Cali.”

Of course, the level of success of Avianca, which has been operating since 1919, will go a long way to determining the fate of the Colombian market. “2022 and 2023 were undoubtedly challenging years for the market, mainly due to macroeconomic conditions such as the rise in jet fuel prices, inflation—which remained in double digits in several markets—and also the strengthening of the dollar, which led to devaluation in several currencies in the region, including the Colombian peso,” Avianca says.

Nevertheless, the carrier implemented its “revamped,” post-bankruptcy business plan in 2023 and carried a record 32.2 million annual passengers. Point-to-point narrowbody flying is now the “core business” for Avianca, the company has said in recent presentations. All of the airline's narrowbodies are Airbus A320-family aircraft, while it operates Boeing 787s on long-haul routes.

While much of the carrier’s capacity additions are coming in the domestic market, in part to fill the void left by Ultra and Viva, Colombia’s international service is also on the upswing. Avianca itself operates around 50 international routes to nearly 40 destinations.

As significant as Emirates’ arrival will be later this year, Colombia is already experiencing growing international demand. And the demand is diverse: Switzerland’s Edelweiss in late 2023 began flights from Zurich to Bogotá and Cartagena. Zurich became the eighth destination in Europe connected to BOG.

Tourism organization ProColombia says Colombia added 23 new international routes in 2023 and 34 in 2022. Highlights of 2023 additions included Avianca’s launch of service between Medellin and Quito, Ecuador and Mexican carrier VivaAerobus’ service between BOG and Monterrey, Mexico.

Cerda and Avianca both point to El Dorado Airport, where the Colombian government is now allowing the historical level of 74 flights per hour after imposing reductions—a relief particularly to Avianca and LATAM Airlines Colombia, the country’s second-biggest operator.

But more capacity likely will be needed to accommodate demand. IATA’s Cerda says the government should commit to boosting capacity at BOG through both flexibility and infrastructure investment. “We need to improve efficiency and capacity in Bogotá,” he says. “It is an airport that will continue to grow. It needs to grow, and we need to have the right infrastructure in place.”