Flybondi chief sees potential for 50-aircraft fleet
The co-founder and chief of Argentina's first and only low-cost carrier Flybondi sees potential for 25 million more passengers annually on discount airlines, potentially creating demand for a fleet of 50 aircraft at Flybondi.
Speaking with FlightGlobal at Flybondi's office in Buenos Aires, Julian Cook reflects upon how Argentina's new government in December 2015 "changed aviation in Argentina forever".
“I approached the country after leaving Switzerland’s Flybaboo in 2008. I found it to be the right place, but the wrong moment. After the government changed in December 2015, it became the right moment."
In a matter of months, Cook helped convince new transport minister Guillermo Dietrich to open El Palomar as Buenos Aires' third airport for low-cost carriers, award Flybondi and other newcomers with dozens of traffic rights, drop minimum fare regulations that protected bus operators and not give in to demands from aeronautical unions.
Cook believes in his advantage as the low-cost pioneer in Argentina. "We are still alone in El Palomar and [have] the privilege to educate Argentineans about how the low-cost business model works for them. Others, such as Norwegian Air Argentina, have only so far made announcements, which have not yet materialised," he says.
Flybondi, which has expanded to serving 17 domestic destinations with five Boeing 737-800 aircraft since its launch five months ago, plans to double its fleet over the next six months.
"We plan to open new destinations from Buenos Aires, Rosario and other bases and start international flights soon," Cook says.
“Our first international destinations will probably be Asuncion in Paraguay, Montevideo and Punta del Este in Uruguay and we are looking into several options to connect Brazil with Argentina’s interior. Rio de Janeiro, Florianopolis and Porto Alegre are potential destinations, and Lima is also one of our high-priority candidates."
However, he is conservative on the Chilean market, which is already served by many airlines.
“We need to understand better the Chilean market," explains Cook. "Since the beginning of the year, the Argentinean peso has lost 50% of its value against other currencies, which led to a strong decline in Argentina-generated international traffic.”
However, he remains optimistic about Flybondi’s long-term potential.
“Passengers will be more price sensitive, which plays to our favour. Moreover, much of our cash reserves are in US dollars, while our costs are in pesos, so we are well prepared,” he explains.
Cook says that his airline may not yet have the lowest cost base in the industry because of its small fleet and cost of expanding into new markets with relatively few flights. However, he considers Flybondi’s competitiveness "unsurpassable" in Argentina, pointing out that the airline's unit cost is one-third of Aerolineas Argentinas'.
According to Flybondi’s initial business plan, the airline will be transporting 10 million passengers annually with a fleet of 28 aircraft by 2022. However, Cook is already looking further beyond.
"There is potential for us to grow by 20 million yearly passengers in the longer term. Once we enter that new phase of maturity, we will order new aircraft to substitute our launch fleet of used aircraft."
Cook says that he is “manufacturer agnostic” and that the 737-800 was chosen because Argentina has a pool of ready labour to service the aircraft.
However, in the long term, Flybondi will be open to both Boeing and Airbus.
"Our current planning predicts our fleet to stabilise at around 50 aircraft in the long-term. Flying Boeing now does not mean that we could not buy Airbus [aircraft] in the future," says Cook. FG
