Tuesday 29 September 2015

CHILE: Sky Airlines Begins Operating In Chile As A Low-cost Carrier

Chile's Sky Airlines becomes a budget or low cost airline with no food served on board, and at the most a soft drink. This is part of the changes to be implemented during the next 12 months by Holger Paulmann CEO and owner of the airline which was started by his father Jürgen Paulmann.

“We are implementing a business model, sustainable, economically viable and resilient to outside factors such as the price of fuel and the money exchange rate”, said CEP Holger Paulmann in an interview with El Mercurio.

Sky Airlines has a fleet of fifteen Airbus 320 and 319, which among other places flies to Punta Arenas, extreme south of Chile.

“Beginning next year both in domestic and international flights meals on board will be charged, and we are also considering charging for luggage, and even for booking seats in the first rows or near the emergency doors”, pointed out CEO Paulmann.

However there are other interesting changes: the sale of one way tickets, at prices which are competitive even when bus rates are considered. In effect the one way 'cheap' option for short flights (10.000 Chilean Pesos, approx 18 dollars) or longer flights (30.000 Pesos, approx 54 dollars) plus boarding fees, as long as they are booked before hand, and be cheaper than taking coaches, explained Paulmann.

The company with these changes and savings should be able to make better use of the aircraft. Nowadays the A320 and A319, spend on average eight hours a day in the air, but with the changes they should be in the air ten hours a day, helping to 'dilute' costs such as those of fuel.

To this must be added the drastic cut in several-stops flights in the country: if last year 80% of its flights made a stop, that is no longer the case. Only Santiago Punta Arenas and Santiago Balmaceda, have a stop at Puerto Montt.

Paulmann announced the end of the Santiago-La Paz (Bolivian capital) regular flight since the average occupation of seats was below 50% and anticipated that cabin space will become another source of income with publicity.

Finally asked what the reaction of all powerful Latam (Lan plus TAM) could be, Paulmann said it was only natural a reaction had to be, but it will stimulate the market and besides, “since Chile has an open skies policy, if we didn't do it somebody from outside could have moved in, with an aggressive prices policy, so before that happens, we did it”.

“We're convinced this is the real business model for airlines, and this is proven by the fact that it is growing at double the rate of other companies”.

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