VivaColombia, New Competition for Panama’s Travel Industry

VivaColombia- sleek and modern aircraft.

VivaColombia- sleek and modern aircraft.

The seating seems comfortable and roomy by industry standards.

The seating seems comfortable and roomy by industry standards. traveladept.com

Panamanians and all those who reside in Panama have new options to visit other countries now. While in recent years Panama has added air routes to Spain and France, the window now opens to incorporate growth flights to nearby destinations like Colombia. Competition is most assuredly showing an impact on rates, making them more accessible for travelers. 

Recently, AirPanama began flying three times a week from the Marcos A. Gelabert airport (Albrook) to Medellin, Colombia. This company has been the only operator exploiting the Panamanian domestic market and now they have added their second international destination after San José, Costa Rica. A month after AirPanama connected Albrook airport to Medellin, the Colombian airline VivaColombia began offering (from August 1, 2014) flights between the neighboring country and the Panama Pacific air terminal on the former military base at Howard.

The company will operate a daily flight from Bogota to Panama and will add four weekly flights between Medellin and Howard. So, let’s see- they will offer daily and weekly flights to and from Albrook and Howard. With two years of operation, the airline already operates 20 domestic routes in the neighboring country. Panama will be the first destination outside Colombia, and before the end of 2014 will also go into Peru and Ecuador.

According to sources from VivaColombia, the company consists of four major shareholders: Bolívar Group of Colombia (Seguros Bolivar Davivienda) Iamsa Group Mexico, Ireland Aviation (Ryanair and Tiger Airways) and Fast Group Colombia. Each shareholder controls 25% of the company, which has invested $ 300 million in its fleet of six aircraft.

Juan Emilio Posada, manager of VivaColombia has said that, unlike other air groups, the airline focuses on volume and doesn’t pretend to compete with aspects such frequent flyer plans and accumulation of miles.

Of course, with their focus on volume the trade off is much lower rates!

Posada maintains that in all routes where they have begun to compete the prices of airfare are way down. “We offer the same standards of safety and punctuality than other companies, but with the difference that we are up to three times lower (in price),” he said.
The company expects an occupancy of 93% and is estimated to carry about 15,000 people per month, after the set price of US $ 138 airfare each way. Posada indicates that $ 57 is for the airline, but the rest are air taxes. In addition, if the passenger wants to carry on luggage they must pay an additional $ 20. Same goes for the drinks and food while on board- everything has a price.
“We are a company with little ballast, traveling with low weight, and if the passenger wants to eat something, they may buy what they want,” said Posada.

Posada adds that when flying to Howard airport they offer lower prices because the departure tax in that terminal is $ 20, exactly half the tax paid by travelers to Tocumen. For AirPanama the company had a promotional offer until July 11 that for $ 150 you could buy a ticket to Medellin, when the regular price was $ 398 with taxes included. With the new proposal on the table, it will be up to travelers who have the freedom to assess their needs during the trip, the convenience of the costs, weigh any additional costs, and evaluate the flight schedules and availability of seating.

Both airlines will have tough competition with Copa Airlines and Avianca, the only operators that offer flights between Tocumen International Airport and Colombia, the second largest source market of tourists to Panama. In the case of Panama’s COPA, we recognize that it is a well healed airline in Panama’s market. During the first quarter of this year, COPA airline reported an occupancy of 78% and a 92.3% punctuality rate. In this period, COPA airline carried 3.9 million passengers, which meant an annual growth of 11%.

AVAILABILITY OF SEATS
66,000

Colombian tourists entering during the 2014 first quarter.
100,000

AirPanama covers domestic routes in the country and makes charter flights to 12 domestic destinations.

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