JetSMART CEO Estuardo Ortiz talks with ATW Editor-in-Chief Karen Walker about operating as a low-cost carrier in South America as they prepare to fly their 50 millionth passenger.
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Karen Walker: Hello everyone and thank you for joining us for Window Seat, our Aviation Week air transport podcast. I'm ATW and Aviation Week Network air transport editor-in-chief Karen Walker. Welcome onboard. I am delighted today to be joined by a very special guest indeed. And that's Estuardo Ortiz, who is the CEO at JetSMART. Now JetSMART is a Chilean low-cost carrier, and we are meeting in Lima, Peru, at the 2025 ALTA Latin American Airlines Association AGM and Airline Leaders Forum. So I'm really looking forward to this conversation—and Estuardo, thank you so much for joining us today. So can I just open up and ask you, first of all, just tell us a little bit about JetSMART, some of the key headlines here for our audience around the world.
Estuardo Ortiz: Absolutely. Well first of all, thank you very much, Karen, for having me on Window Seat. Certainly, JetSMART is a South American carrier more so than a Chilean carrier. Since the beginning, we've had the vision of looking at this large continent of almost 500 million people without any relevant presence of the ULCC or LCC offering, this white spot in the world map, that in, again, in a large geography with a vast increasing middle class with average household incomes that could range from $1,000 to $2,000 but that rarely travel through air. So that's the focus we've had since day one. We started our first operation, this was in July 2017. We are very close to receive our 50th aircraft. We only operate Airbus A320s, A321s, brand new. We run, we fly the most modern, the youngest fleet in the Americas, and we are just about to board our 50 millionth passenger. And I got to tell you that out of those we estimate about 22% minimum have been first-time flyers. So it is capitalizing on the thesis that South America still has one of the lowest trips per capita in the world, only less than 0.5. We see the US almost close to 3, Spain, 4.5. And of course the structure of the market is different, but the opportunity is very clear.
Karen Walker: Well congratulations. You're still relatively new but 50 million passengers, that's a lovely milestone to be making. I'm sure that will be special for you and for them. So talk a little bit about being a low-cost carrier in this region. As you say, it's a very exciting region, huge potential for the aviation industry and for airlines because, as you say, so many people have still never flown, but vast distances between destinations within the region, but it's also a region that's known for high cost, putting it bluntly, lots of taxes, lots of fees, all sorts of things reigning down on you. Jet fuel tends to be more expensive here than anywhere else. All sorts of things. So obviously it's a low-cost carrier, costs are essential to you, keeping an eye on those. So where are the challenges?
Estuardo Ortiz: It's a really good question because the reality of the matter is I've been exposed in this industry, wonderful industry, for 20 years and I was on the side of the full service legacy carrier for a decade and I always noticed there was a massive amount of stimulation opportunity, but the cost wasn't there. The cost structure wasn't there. And for sure there is some factors that you have to weigh in, but at the end of the day, the ULCC model gives you a few things that I think very powerful in this region. First, we do have much lower cost than the established carriers. JetSMART has cost that is at the level and in some cases even better than Ryanair. So we can produce a seat here at world class efficiency, low-cost levels. So that's a fact first, number one. Two, the commercial model of offering people the choice to go one way wasn't present when we came in.
You got to fly a round trip. Makes sense for the incumbents to do that. Now we've changed it right in the region. Most markets you can fly one way. That means you can fly with JetSMART and they can return with someone else. You can go by car, by bus, come back with JetSMART. People choose whether they want or not to pay for baggage. If they don't need it, why charge it? And that has been an instrumental factor to establish the model, and we've had help because all of our competitors are doing that as well today. So the model is actually in the minds and the hearts and the wallets of the passengers. So fundamentally there is again, population to be stimulated. We can deliver low fares we can have costs lower than competition and at the end of the day, that's what matters.
Karen Walker: That takes a lot of discipline. You can go in with the mindset, we're going to be a low-cost carrier, we're going to do ancillaries, we're going to give people choice. Those are all good things and particularly when it’s like things like choice that people didn't have before. As you say, it sets you apart. I often see with the low-cost carriers in other regions, it starts off well—yeah, you know what I'm going to say—and there's a slide in the wrong direction. What stops you from going there? What makes you stay disciplined on cost?
Estuardo Ortiz: Look, I think it's got to be part of your DNA since I started, I've dedicated myself a lot to create a culture that understands at every level—the flight attendants, the pilots, all the management—that cost is the one thing we'll never compromise. That efficiency and innovation, it's part of our model. We just need to think different and we've found that people are very excited about it to actually be part of it. You have to also, like you say, resist temptation. In the sense that JetSMART, we have adopted the ULCC model to this region, we are part of the Indigo Partners portfolio and there are other airlines like Wizz Air in Europe or Frontier in the US or Volaris or Cebu Pacific, et cetera. We are different. But one thing we all share and in JetSMART we live here today is the passion, obsession, religionm for efficiency and costs. Look at JetSMART. JetSMART is the number third ranked airline in customer satisfaction in South America according to the Skytrax award rankings. We have been selected the best low cost and we are above full-service carriers. How would you explain that? And it's because we just keep it simple, keep it consistent. Every flight you get accessible prices, brand new planes, a friendly crew and a digital experience. We try to improve every day and that, Karen, just simply works.
Karen Walker: When people know first of all they're getting the right price and hey, I can actually afford to fly now. And also that it's safe and it's reliable then that, as you say, it's a huge customer satisfaction thing. You just mentioned technology and digitization. Do you use that much?
Estuardo Ortiz: We have from day one. I mean one of the advantages that we've enjoyed its timing. I mean, when we founded the airline, we didn't have to use a lot of the technology that many other airlines have and some of those systems are very expensive. So the fact that we can sell digital from day one, the fact that we can incorporate that into our DNA, the fact that we're utilizing AI for the past year in many areas of the business, I do think we will improve our customer experience, not by adding more or trying to include services that maybe they don't want, we will give them the choice, but make it easier. Karen, I think we are finally going to be able to do many things that we wanted in the past. To give an example, we decided about a year ago, exactly a year ago, that we needed to change the way we have customer service done. We have the usual model, we have a contact center outsourced, and we developed this AI robot with training for about two to three months with expectation to probably, hopefully manage 15% of the cases; today is managing more than 60% of the cases, solving the cases.
Karen Walker: Wow.
Estuardo Ortiz: So customer satisfaction has come up and the cost has come down 45%. So I think it's wonderful to think that we will be able to give a one click, easy to use experience to make it easier to fly.
Karen Walker: Sounds to me that's the smart in JetSMART.
Estuardo Ortiz: Absolutely. We are very proud about “Think different, think smart.” Yeah.
Karen Walker: Yeah. Think out of the box. But always as you say, have that discipline. Underline that you mentioned that you're an all Airbus narrowbody fleet, very new aircraft. You have neos, are the neos in service or still on order
Estuardo Ortiz: In service? Yes, they are.
Karen Walker: Okay, that's what I thought. But you still do have some aircraft …
Estuardo Ortiz: We do have ceos as well, yeah.
Karen Walker: … in the pipeline. That's right, exactly. So obviously no conversation is complete these days without asking you how things are going with deliveries, particularly on the engine side. Just give us a snapshot of where things stand with you today.
Estuardo Ortiz: Look, I think it's amazing since their inception they have to deal with the startup phase then with COVID-19, then with the highest price of fuel and now we have to deal also with other supply chain that is affecting the industry on a global basis. We do have a great relationship with Airbus. We have 75 more aircraft to come. So a total of 125. Along with the Indigo Partners portfolio, we are the largest buyer. So I think the delivery schedule we had set since the end of 2024 and it's been working well. So I got no concerns in the pipeline for growth. We just opened Colombia last year. We opened Peru about two years ago. We already operate domestic Chile and Argentina. So four markets, four AOCs, 87 routes. We serve Paraguay, Bolivia, Ecuador, Dominican Republic. So from a fleet perspective footprint for growth, we have already accomplished what we needed. The engines of course it was more of an issue at the beginning because predictability was zero. But now working very closely with the OEM, I think we got the issue managed, it's part of our operating plan and we need to adapt to it. It's going to take a while to get through now.
Karen Walker:
Okay, so what I'm hearing is that you've got a lot more confidence these days in when things are coming.
Estuardo Ortiz:
A lot more. Yes.
Karen Walker:
And in terms of, we're hearing a lot about aircraft on the ground. You've got them in service, but they're on the ground longer than expected. Do you have grounded aircraft at the moment?
Estuardo Ortiz:
We do. We do, of course we do.
Karen Walker:
How many?
Estuardo Ortiz:
So now we probably have around seven or eight aircraft out of a 50-aircraft fleet. But the reality of the matter, Karen, is it's not as important if you really have an operating plan that fits that reality. So you plan your crew, your markets, you make sure that you're taking all the steps, and of course we have a very comprehensive support program from the OEM in terms of operation, logistics, economic compensation, et cetera. So it's not ideal. I would rather not have it. But now it's really manageable, and I think it's the question of when is this going to be ramping down? How's it going to happen? But we're managing well.
Karen Walker:
But you're able to plan for it because the information you're getting is a bit more reliable.
Estuardo Ortiz:
We actually have been pretty good ourselves. I think it's a merit of how the operations team is doing a really good job, working very closely, and you’ve got to be very proactive and, of course, have contingencies in place. So, I think it has changed for sure the way we do business. But we are at JetSMART very quick to adapt. Again, one of the learnings that I took from the pandemic is agility. You’ve got to be very nimble, and we adapt to markets.
Give an example: Argentina’s regulation changed dramatically with President Milei coming to power. Argentina was probably the most backward in terms of regulation, if you compare the regulation to the modern standard of all the countries in South America. I would tell you that today the most advanced, two years after, is Argentina. It allows foreign pilots, it allows interchange. They have signed seven open skies agreements. It's a record, I think, worldwide, and we have doubled our capacity in Argentina. So we are always looking at every single thing that happens. You know how this industry is—we are watching the oil prices, we're all watching the interest rates. So we're very quick to adapt, and engines have just been one more.
Karen Walker:
I know the liberalization from Argentina has got a lot of people very excited. So in general terms, given the orders that you still have with Airbus and your growth plans, are you comfortable that you're where you'll need to be with the fleet at the moment, or will you need to order more?
Estuardo Ortiz:
Look, we've grown an aircraft per month for the past three years. I mean, it is rapid growth—from 17 to 50 aircraft. So it's been something that we needed to do. The pandemic really brought to JetSMART opportunities that I had never seen before. Fourteen airlines ceased operations, so there was a consolidation. There were airports that were impossible to get into, like Lima or Bogotá, that we did. But now it's going to be what I would call high growth but more moderate. More predictable. So I have no concerns about the fleet. I think we have plenty of markets to come that are right for us to fly, and we are getting to a point in the region that, if you exclude Brazil domestic, we are already the number three airline in South America. So our schedules become stronger, our costs become more competitive, and it is just now gaining scale, adding the fleet, keeping things simple.
Karen Walker:
Strengthening that foundation.
Estuardo Ortiz:
That's it. Yeah..
Karen Walker:
You have an alliance with American Airlines. Can you just talk a little about that—what that does for you?
Estuardo Ortiz:
Yeah, it's a very interesting alliance for us, for sure. Like I said, everything we do has got to be ULCC, it's got to be smart. So we never compromise on costs. What brings that is the challenge of innovation—how do we do things that we know we need to do or we’d like to do without affecting cost? And one example is the American Airlines alliance.
American, as you may know, is a minority shareholder in JetSMART. We welcome the alliance, but we needed to develop something different. So it's been taking a while for us and American to develop the technology and the process to do this, but we did it. Now we have codeshare flights with American on many of our routes, and next year we'll implement Colombia, which is a market that seems to have a lot of potential. You can accrue and redeem your miles on our flights.
Redemption just came in about two months ago. There is a significant amount of miles accrued by American Advantage customers in South America that were not being able to redeem. But with us, you can apply to Rio de Janeiro or Santiago or Cartagena or Cusco, Peru, for a fraction of those miles required, and we are seeing demand for those destinations. So I think it's just starting. It's very interesting to see a unique ULCC-legacy culture alliance that, again, has been done in a way that, in my previous life in the legacy world, I would have never thought was possible.
Karen Walker:
Yeah, that is one of the very interesting aspects of that. You've got a big major legacy airline name and now an alliance with the low-cost carrier in South America.
Estuardo Ortiz:
That's right.
Karen Walker:
Fantastic. Just one last question, if I may. What are you most looking forward to in 2026, and what are the big priorities?
Estuardo Ortiz:
Look, this year is going to be a tremendous year for us. Again, finishing this stage of super high growth, getting to 50 aircraft, boarding our 50 millionth passenger, getting to be the number three carrier in passengers. A footprint that we can really build upon. Like you said, foundations are there—mature the airline, ramp up our revenue programs, attain the customer experience as we've spoken about before.
Next step for us is just making it easier, gain scale, get mature. So really, we're looking forward. We've been doing way too much to my taste, but it was necessary. It was strategically the right decision. Now it's really about doing that. We have a very efficient fleet, a great team, and I think the customer response has been very good.
We do need to continue facing the challenges of the region. Like you said at the beginning, we have been able to work together with the Chilean government, with the Brazilian government, and we have seen airport fees and boarding fees being reduced. We need to continue doing that. We need to continue fostering liberalization of regulation, as Argentina recently did. But there's an interesting project as well in Brazil and Ecuador that allows the free movement of aircraft and free movement of pilots as well.
Consumer protection is one of the areas we also think is important—to have a reasonable framework that allows, of course, our customers to have their rights preserved, but as well for our model to be understood. We have some countries that want to force airlines to include baggage in the fare, and the reality, Karen, in this region is that most people on some routes do not carry baggage. So it is always a factor of disruption.
We have been, I think, that factor of change, but the results are there, and I see support from governments when we actually go in, and I hope that's the case as well.
Karen Walker:
Fascinating story. I congratulate you, particularly as this has all, as you say, happened very quickly, but you've done it through the pandemic and all the other stuff that this industry always seems to be going through. But you've continued on that upward track.
Estuardo Ortiz:
We're just beginning. There's so much that we can learn—so many passengers, so many cities. But we'll take one step at a time. We've got to do things right.
Karen Walker:
Yeah, I can sense the enthusiasm and passion to keep going, though. Like I say, well done, and thank you so much for your time today. I really appreciate it. Great to hear from you and all the very best to you and the JetSMART team.
Estuardo Ortiz:
Thank you. We'll hope to see you on board and fly smart.
Karen Walker:
Definitely. Thank you also to our producer, Cory Hitt, and of course a huge thank you to our listeners. Make sure you don't miss us each week by subscribing to Window Seat on Apple Podcasts or wherever you like to listen. This is Karen Walker disembarking from Window Seat.
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