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Latin American Wings: The Airline That Never Was
Despite ceasing revenue flights on March 9, Latin American Wings (LAW) completed a few flights on March 12, hours before the Chilean Aviation Authority (DGAC) revoked its AOC. A singular history of rapid expansion and spectacular failure just completed its circle.
LAW was born in January 2016, with a route from Santiago (Chile) to Punta Cana (Dominican Republic), via Lima (Perú). Operating with five Boeing 737-300s, it followed a traditional full-service carrier model. In a domestic market dominated by LATAM, LAW’s intentions were simple: to compete and to operate international markets that didn’t generate any interest with the other airlines.
With that in mind, the route to Port Au Prince (Haiti) was set, and with it, the first controversy: the Chilean government formally accused the company of promoting illegal immigration. As the rate of inadmissible passengers grew, the impact on the airline’s image was measurable.
Perhaps this situation was a factor for the FAA to deny the request to operate a route to Miami, which deemed the investment in Boeing 767 aircraft as unnecessary. The tiny detail of the permit denial was no hurdle for LAW to sell tickets to Miami, though.
After serious liquidity problems and the impossibility to set foot on the domestic market, given the success of SKY Airline’s conversion to a LCC and the addition of a well-funded JetSmart made it impossible to compete and grab a significant market share. On January 10, 2018, LAW ceased to operate its domestic routes, focusing on the international destinations it served.
But problems always come in pairs. Just weeks after the announcement, the Peruvian Aviation Authority revoked its permission to operate in its airspace, due to the frequent flight delays and cancellations. It was already being investigated by Peruvian Authorities for a breach of contract with a local company. After that, the fate of the airline was unavoidable.
Hundreds of passenger were stranded and with no response from the airline, contracts not honored, and criminal investigations is what Latin American Wings is leaving behind after its two-year adventure. The words of its CEO, Andrés Dulcinelli, blaming a “war price” between Chilean operators fail to explain the true nature of the demise, in a market where growth is led by cost reduction, to set an operation model that is not cost-based may render the project destiny right from the start.
There are political implications — some analysts say that it is not by chance that LAW ceases operations just two days before the presidential office transition in Chile- that have to be fully investigated. But for now, the fact is that another Latin American operator bites the dust, in a market that is relentless with ventures that underestimate the intricacies of the region.
- LATAM Airlines Files for Chapter 11 Bankruptcy - May 26, 2020
- Avianca Holdings Files for Chapter 11 Protection, Closes Peru Subsidiary - May 11, 2020
- Boeing-Embraer Deal is Officially Terminated - April 25, 2020
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