American Airlines made a bet on South America for 2021. Civil unrest and spiking COVID-19 cases are now threatening its success in the region. tpallini@businessinsider.com (Thomas Pallini)
American Airlines is facing numerous setbacks in South America.
Rising COVID-19 cases in Chile, Brazil, and Peru forced the airline to cut flights in April.
Civil unrest and protests in Colombia are now further threatening success in the region.
American Airlines expansion strategy in South America is experiencing a seemingly never-ending stream of hurdles.
Tourism-dependent Latin America was among the first regions to welcome US tourists during the coronavirus pandemic, and American was standing ready to fly eager travelers. Earlier in the year, the airline had announced new flights to cities in Chile, Colombia, and Brazil in a bid to attract leisure flyers as it waited for business travel to recover.
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Bjorn Kjos, a Norwegian co-founder and former CEO, holds 15% of the nascent carrier s shares. The majority owner is shipping entrepreneur Bjorn Tore Larsen, the co-founder of OSM Aviation, which used to provide flight crews for Norwegian. We now have a once-in-a-lifetime opportunity to build a brand-new airline from scratch, Larsen said in a prepared remark. As the world reopens, the public needs an innovative, low-cost intercontinental airline with modern, more environmentally friendly and fuel-efficient aircraft. We have industry knowledge and have secured modern Dreamliners at very good terms.
The demise of Norwegian s transatlantic operations, as well as the death of Iceland s Wow Air and other discount transatlantic carriers over the past three years, have led some industry experts to sound the death knell of that business model, at least for the foreseeable future.
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RIVALS TAKE NOTE OF NORWEGIAN
Norwegian’s large fleet commitments and ambitious business plan to establish a foothold in the network carrier-dominated transatlantic market brought its share of sceptics – but also some admirers and copycats.
A number of new entrants outlined plans to enter the market, while network carriers reacted with competitive moves of their own to target the premium leisure segment.
Most notably that was evident with IAG. The British Airways and Iberia parent found Norwegian encroaching into the Barcelona and London Gatwick markets. The group responded by launching its own rival low-cost brand Level, competing on long-haul routes from Barcelona with Norwegian.