Industry Research Report on the Airlines in Chile.

Value Chain outline

The airlines industry value chain involves several key steps, from preparing the aircraft and planning routes to operating flights and managing customer interactions. These steps can be broadly categorized as upstream (preparation and planning), core operations (flight execution), and downstream (customer service and handling).

• Identification and description of each step in the value chain

  • Aircraft Acquisition & Maintenance: This initial step involves acquiring, financing, and maintaining the aircraft fleet. It ensures the availability and airworthiness of the planes.

    • Identification and description of segments for each step of the value chain.
      • Acquisition & Financing: Deals with the purchase, leasing, and financial arrangements for aircraft.
      • Maintenance, Repair, and Overhaul (MRO): Focuses on the regular upkeep, necessary repairs, and major overhauls to keep aircraft safe and operational.
    • List of types of players in each segment
      • Acquisition & Financing: Airlines, Aircraft Manufacturers (e.g., Airbus, Boeing), Leasing Companies, Financial Institutions.
      • Maintenance, Repair, and Overhaul (MRO): Airlines' in-house MRO divisions, Independent MRO providers, Component suppliers.
    • Detailed description of the main activities within each segment.
      • Acquisition & Financing: Negotiating purchase/lease agreements, securing financing, fleet planning.
      • Maintenance, Repair, and Overhaul (MRO): Scheduled inspections, preventative maintenance, repairing defects, component replacement, major overhauls, complying with airworthiness directives. SKY Airline is noted for having the newest aircraft fleet in the Americas, implying recent acquisition and ongoing maintenance activities. LATAM has also faced aircraft shortages, leading to wet lease agreements on some international routes, highlighting the importance of fleet availability.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: As a major operator, LATAM engages in aircraft acquisition and significant maintenance activities, both in-house and potentially through third parties. They have experienced aircraft shortages impacting operations.
      • SKY Airline: Known for possessing the newest aircraft fleet in the Americas, indicating recent acquisition strategies. They also engage in ongoing maintenance.
      • JetSMART: Utilizes standardized fleets as a key strategy to maintain low costs, implying specific acquisition and maintenance approaches geared towards efficiency.

  • Network Planning & Scheduling: This step involves determining routes, frequencies, and timings of flights to optimize connectivity and profitability.

    • Identification and description of segments for each step of the value chain.
      • Route Development: Identifying potential new routes based on market demand, competition, and operational feasibility.
      • Scheduling: Creating efficient flight schedules, considering factors like aircraft rotation, crew availability, airport slots, and passenger connections.
    • List of types of players in each segment
      • Route Development: Airlines' planning departments, Market research firms, Airport authorities.
      • Scheduling: Airlines' operations and planning departments, Air Traffic Control authorities.
    • Detailed description of the main activities within each segment.
      • Route Development: Market analysis, feasibility studies, negotiating airport access. JetSMART recently launched new routes including to Curitiba, Mendoza, and a connection between Concepción and Buenos Aires, demonstrating active route development. Turkish Airlines announced new direct flights from Istanbul to Santiago.
      • Scheduling: Optimizing flight timings, managing aircraft and crew logistics, coordinating with air traffic control.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: Operates an extensive network in Latin America and internationally. Their planning includes managing routes across five domestic markets and various international destinations.
      • SKY Airline: Operates to 14 domestic and 11 international destinations, actively involved in network planning.
      • JetSMART: Operates 80 routes, continuously launching new connections as part of its network strategy.

  • Marketing & Sales (Distribution): Activities focused on promoting services, selling tickets, and managing customer relationships.

    • Identification and description of segments for each step of the value chain.
      • Marketing & Branding: Creating brand awareness and promoting routes and services.
      • Sales & Distribution: Selling tickets through various channels (online, agencies, direct sales).
      • Customer Relationship Management (CRM): Managing customer interactions, loyalty programs, and feedback.
    • List of types of players in each segment
      • Marketing & Branding: Airlines' marketing departments, Advertising agencies, Digital marketing firms.
      • Sales & Distribution: Airlines' sales teams, Online Travel Agencies (OTAs), Travel Agencies, Global Distribution Systems (GDS).
      • Customer Relationship Management (CRM): Airlines' customer service departments, CRM software providers.
    • Detailed description of the main activities within each segment.
      • Marketing & Branding: Advertising campaigns, social media marketing, brand positioning. Low-cost carriers like SKY and JetSMART often focus on price-sensitive marketing.
      • Sales & Distribution: Online booking engine management, managing relationships with travel agencies and OTAs. Tickets are sold through various platforms.
      • Customer Relationship Management (CRM): Handling customer inquiries, managing loyalty programs (e.g., frequent flyer programs), addressing complaints. JetSMART has been implementing measures to reduce passenger complaints.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: Has a significant brand presence and utilizes multiple sales channels. They also manage extensive loyalty programs.
      • SKY Airline: Engages in marketing and sales for its low-cost model across domestic and international routes.
      • JetSMART: Focuses on simplified processes, including sales, to maintain low costs.

  • Passenger & Cargo Handling (Airport Operations): Managing passenger flow at airports, handling baggage and cargo, and ensuring smooth aircraft turnaround.

    • Identification and description of segments for each step of the value chain.
      • Check-in & Boarding: Processes for passenger check-in, security screening coordination, and boarding aircraft.
      • Baggage Handling: Managing checked baggage from check-in to loading and unloading.
      • Cargo Handling: Managing air cargo logistics, including receiving, storing, and loading/unloading cargo.
      • Ground Operations: Aircraft pushback, towing, and other movements on the ground.
    • List of types of players in each segment
      • Check-in & Boarding: Airlines' ground staff, Airport operators, Security personnel.
      • Baggage Handling: Airlines' ground staff, Airport operators, Handling agents.
      • Cargo Handling: Airlines' cargo divisions, Cargo handling agents, Freight forwarders, Customs authorities.
      • Ground Operations: Airlines' ground staff, Handling agents, Airport operators.
    • Detailed description of the main activities within each segment.
      • Check-in & Boarding: Verifying passenger details, issuing boarding passes, managing queues, coordinating boarding times.
      • Baggage Handling: Sorting, loading, transporting, and unloading passenger baggage.
      • Cargo Handling: Accepting, screening, storing, building ULDs (Unit Load Devices), loading/unloading cargo aircraft or cargo holds on passenger aircraft. LATAM is also involved in cargo transport.
      • Ground Operations: Marshalling aircraft, connecting ground power and air conditioning, coordinating with air traffic control for ground movements.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: Operates significant passenger and cargo handling operations at airports across its network, including in Chile.
      • SKY Airline: Manages passenger and baggage handling for its domestic and international flights.
      • JetSMART: Conducts ground operations aligned with its ultra low-cost model, aiming for efficiency in turnaround times.

  • Flight Operations: The core activity of operating the flights safely and efficiently.

    • Identification and description of segments for each step of the value chain.
      • Flight Crew Management: Scheduling, training, and managing pilots and cabin crew.
      • Flight Execution: Operating the aircraft according to flight plans, air traffic control instructions, and safety regulations.
      • Fuel Management: Planning fuel loads and refueling operations.
    • List of types of players in each segment
      • Flight Crew Management: Airlines' operations departments, Training organizations, Pilot and Cabin Crew unions.
      • Flight Execution: Pilots, Air Traffic Control (DGAC in Chile), Airlines' operations control centers.
      • Fuel Management: Airlines' operations departments, Fuel suppliers, Airport fuel services.
    • Detailed description of the main activities within each segment.
      • Flight Crew Management: Ensuring crew are rested, certified, and scheduled for flights. Some airlines in Latin America have resorted to wet leasing partly due to personnel shortages, highlighting challenges in crew availability.
      • Flight Execution: Pre-flight checks, taxi, takeoff, en route navigation, landing. Adhering to strict safety protocols and regulations set by authorities like the DGAC.
      • Fuel Management: Calculating required fuel based on route, weather, and payload; coordinating refueling at airports.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: Conducts extensive flight operations across its wide network.
      • SKY Airline: Operates flights as a low-cost carrier, focusing on efficient flight execution.
      • JetSMART: Manages flight operations for its ultra low-cost routes, emphasizing punctuality and efficiency.

  • Ancillary Services: Additional services offered to passengers beyond the basic fare.

    • Identification and description of segments for each step of the value chain.
      • Onboard Services: Selling food, beverages, comfort items, and entertainment during the flight.
      • Additional Services: Selling checked baggage allowance, seat selection, priority boarding, travel insurance, etc.
    • List of types of players in each segment
      • Onboard Services: Airlines' cabin crew, Catering companies.
      • Additional Services: Airlines' sales platforms (website, app), Partner companies (e.g., insurance providers).
    • Detailed description of the main activities within each segment.
      • Onboard Services: Providing or selling items and services during the flight. Some low-cost carriers minimize free onboard services.
      • Additional Services: Offering various add-ons during the booking process or at the airport to generate additional revenue. This is a significant revenue stream for low-cost and ultra low-cost carriers like SKY and JetSMART.
    • List examples of key players with detailed profiles.
      • LATAM Airlines Group: Offers a range of ancillary services, varying by fare class and route.
      • SKY Airline: As a low-cost carrier, ancillary services are a key part of its business model, with passengers paying for services like checked baggage and seat selection.
      • JetSMART: As an ultra low-cost carrier, ancillary services are crucial for its revenue model, offering various paid options.

• Show estimates of volumes and sizes of each step in the value chain. Volumes and sizes are primarily quantifiable at the output stage (passenger and cargo traffic) and related to fleet size and market share.

  • Fleet Size (Aircraft Acquisition & Maintenance): JetSMART plans to expand its fleet to 100 aircraft by 2028. SKY Airline has the newest fleet in the Americas and is investing in A321XLR aircraft. LATAM has faced aircraft shortages affecting its operations.
  • Network Size (Network Planning): LATAM operates an extensive international network and in 5 domestic markets in the region. SKY operates 14 domestic and 11 international destinations. JetSMART operates 80 routes.
  • Passenger Traffic (Sales & Handling, Flight Operations):
    • LATAM Airlines Group transported 82 million passengers across the group in 2024, their highest recorded number. They expected to transport 3.6 million domestic passengers in Chile during the summer of 2024-2025. They transported over 2 million passengers between Brazil and Chile in 2024.
    • SKY Airline transported 3,308,746 passengers in the first half of 2022 (Chile and Peru operations). They expected to reach 9.5 million passengers across their network in 2024. They anticipated 1.6 million passengers would travel within Chile using their services during the summer of 2024-2025.
    • JetSMART experienced a 52% increase in passenger volume between 2022 and 2023. They reached 2 million passengers in Colombia in October 2024.
  • Domestic Market Share (Chile - Sales): As of March 2025, LATAM held a 61.7% domestic market share in Chile, SKY Airline held 25.8%, JetSMART held 11.8%, and Aerovías DAP held 0.8%. LATAM gained market share in the domestic Chilean market in 2024. JetSMART had over 10% of the domestic market share in Chile in October 2024.
  • Financial Size (Revenue - Sales & Operations): LATAM Airlines Group reported total operating revenues of US$13.034 million and a net income of US$977 million in 2024. They reported US$3.411 million in total revenue and US$355 million in net income in Q1 2025.

Value Chain Summary Table

Attribute	Aircraft Acquisition & Maintenance	Network Planning & Scheduling	Marketing & Sales (Distribution)	Passenger & Cargo Handling (Airport Operations)	Flight Operations	Ancillary Services
Segments	Acquisition & Financing, MRO	Route Development, Scheduling	Marketing & Branding, Sales & Distribution, CRM	Check-in & Boarding, Baggage Handling, Cargo Handling, Ground Operations	Flight Crew Management, Flight Execution, Fuel Management	Onboard Services, Additional Services
Types of Players	Airlines, Manufacturers, Leasing Cos., Financial Inst., MRO providers	Airlines, Market research, Airport authorities, Air Traffic Control	Airlines, Ad agencies, OTAs, Travel Agencies, GDS, CRM providers	Airlines' staff, Airport operators, Handling agents, Customs, Freight forwarders	Airlines' staff, Pilots, ATC, Training orgs., Fuel suppliers	Airlines' staff, Catering cos., Partner companies
Main Activities	Acquiring/leasing, financing, maintaining, repairing, overhauling	Analyzing markets, developing routes, creating schedules	Branding, advertising, selling tickets (online, agencies), CRM	Check-in, boarding, baggage/cargo processing, ground movements	Managing crew, executing flights, managing fuel	Selling onboard items, offering paid add-ons
Examples of Players	LATAM, SKY, JetSMART (operators); Airbus, Boeing (manufacturers)	LATAM, SKY, JetSMART (operators); DGAC (regulatory)	LATAM, SKY, JetSMART (operators); Turismocity (OTA); Travel agencies	LATAM, SKY, JetSMART (operators); Airport operators in Chile, DGAC	LATAM, SKY, JetSMART (operators); DGAC (regulatory)	LATAM, SKY, JetSMART (operators)
Estimates of Volumes/Sizes	JetSMART fleet target ~100 aircraft; SKY newest fleet; LATAM aircraft shortages	LATAM extensive network; SKY 14 dom/11 intl destinations; JetSMART 80 routes	LATAM 61.7% dom market share (Mar 2025); SKY 25.8%; JetSMART 11.8%; DAP 0.8%	LATAM 82M passengers (2024 group); SKY 9.5M passengers (2024 network); JetSMART 52% pax increase (2022-23)	LATAM 82M passengers (2024 group); SKY 9.5M passengers (2024 network); JetSMART 52% pax increase (2022-23)	Significant for LCCs (SKY, JetSMART)

Examples of Main Players

This section details key players operating in the Chilean airline industry, highlighting their roles across different value chain steps based on the provided context.

• LATAM Airlines Group:

  • Profile: The largest airline group in Latin America with a significant presence in Chile's domestic market and extensive international operations. They reported strong financial results in 2024 and Q1 2025.
  • Value Chain Involvement & Case Study: LATAM is involved in all steps of the value chain. They manage aircraft acquisition and maintenance for a large fleet. Their network planning is extensive, covering numerous domestic and international routes, including being a major player on routes between Brazil and Chile. They dominate marketing and sales, holding the largest domestic market share in Chile (61.7% in March 2025). They handle large volumes of passenger and cargo traffic through their airport operations. They conduct complex flight operations across their network. Their business model includes various service classes and ancillary offerings. A challenge faced is aircraft shortages, requiring wet lease agreements for some routes. They have also been actively working to minimize environmental impact.

• SKY Airline:

  • Profile: A Chilean low-cost carrier that transitioned to a purely low-cost model. Known for having the newest aircraft fleet in the Americas.
  • Value Chain Involvement & Case Study: SKY is involved in aircraft acquisition and maintenance, highlighted by their new fleet and investment in A321XLR aircraft. They plan and operate a network of 14 domestic and 11 international destinations. Their marketing and sales focus is on the low-cost model, contributing to their 25.8% domestic market share in Chile (March 2025). They handle passenger and baggage operations at airports for their flights. They execute flight operations within their network. Ancillary services are a critical part of their low-cost business model, generating revenue through add-ons.

• JetSMART:

  • Profile: An ultra low-cost carrier operating in South America, including Chile. A key strategy is simplifying processes and standardizing fleets to maintain low costs.
  • Value Chain Involvement & Case Study: JetSMART's aircraft acquisition strategy focuses on standardized fleets for cost efficiency. They are actively involved in network planning, operating 80 routes and launching new ones. Their marketing and sales emphasize ultra-low fares, contributing to their 11.8% domestic market share in Chile (March 2025). They manage passenger handling and aim for efficient ground operations to maintain punctuality. Flight operations are conducted with a focus on efficiency and cost control. Ancillary services are fundamental to their ultra low-cost model, providing significant revenue streams. They have faced challenges with passenger complaints and are implementing measures to reduce them.

• Aerovías DAP:

  • Profile: An airline operating domestic flights in Chile.
  • Value Chain Involvement & Case Study: Aerovías DAP focuses primarily on domestic routes within Chile, suggesting a localized network planning and flight operation focus. Their market share indicates a smaller scale of operations compared to the major players, impacting their volumes in sales, handling, and operations.

• International Airlines (e.g., American Airlines, Avianca, Copa Airlines, Iberia, Air France, Delta Air Lines, Turkish Airlines):

  • Profile: Major international carriers connecting Chile to other parts of the world. Some have reduced services to Chile. American Airlines is a shareholder in JetSMART. Turkish Airlines recently announced new direct flights to Santiago.
  • Value Chain Involvement: These airlines primarily engage in Network Planning (connecting their global networks to Chile), Marketing & Sales (selling international tickets to/from Chile), Passenger & Cargo Handling at Chilean airports (often using handling agents), and International Flight Operations to and from Chile. Their volumes and sizes pertain specifically to their Chile routes.

Volumes and Sizes

Estimates of volumes and sizes in the Chilean airline industry highlight the dominance of LATAM, the significant presence of low-cost carriers SKY and JetSMART, and the smaller scale of regional operators like Aerovías DAP.

• Domestic Market Share (Chile): As of March 2025, LATAM held 61.7% of the domestic market, SKY Airline held 25.8%, JetSMART held 11.8%, and Aerovías DAP held 0.8%. LATAM's share increased in the domestic market in 2024. JetSMART had over 10% domestic share in October 2024.
• Passenger Volumes:
  • LATAM Group transported 82 million passengers in 2024, a record high for the group. For the summer 2024-2025, they expected to transport 3.6 million domestic passengers in Chile. Over 2 million passengers traveled between Brazil and Chile with LATAM in 2024.
  • SKY Airline aimed to reach 9.5 million passengers across its network in 2024. They anticipated carrying 1.6 million passengers within Chile during the summer 2024-2025.
  • JetSMART saw a 52% increase in passenger volume between 2022 and 2023.
• Financial Performance: LATAM Airlines Group reported US$13.034 million in total operating revenues and US$977 million in net income for 2024. They continued strong performance in Q1 2025 with US$3.411 million in revenue and US$355 million in net income. Specific revenue figures for SKY, JetSMART, or Aerovías DAP in Chile are not provided in the sources.
• Fleet Size: JetSMART has plans to grow its fleet to 100 aircraft by 2028.

References

• ¿Qué aerolíneas están funcionando en Chile? en Recomendaciones de viajes - Turismocity. (2024, March 26).
• Empresas del turismo anticipan para el verano 2024-2025 preferencias por destinos nacionales - Ladevi Chile. (2024, December 16).
• LATAM Airlines Group cierra un año récord con un EBITDAR ajustado superior a los US$3.100 millones y una utilidad neta de US$977 millones, junto con un sólido crecimiento de la capacidad del 15,1%. (2025, January 31).
• Cuatro aerolíneas internacionales dejan o reducen vuelos a Chile: sorpresa y preocupación de funcionarios - Aviacionline. (2024, April 15).
• ¿Hay escasez de aviones y personal especializado en la industria? Aerolíneas en Latinoamérica recurren al Wet Lease para cubrir demanda - Forbes Chile. (2025, January 29).
• Latam y Sky confirmaron que seguirán operando en Chiloé - SoyChile.cl. (2024, April 9).
• ¿Dónde ganó más participación Latam Airlines en 2024? Perú en internacional, Chile en el mercado doméstico - La Tercera. (2025, March 19).
• Turkish Airlines volará 4 veces por semana de Estambul a Santiago - Infotur Latam. (2024, December 17).
• Latam consolida su operación en Chile y Brasil - Aviation Club Center. (2025, March 21).
• LATAM alcanza utilidades por US$ 258 millones y consolida tendencia positiva en sus resultados. (2024, May 2).
• JETSMART TUVO VARIACIÓN EN PAXS TRANSPORTADOS - T News. (2025, January 6).
• marzo-2025. (Note: This likely refers to a source title or date, but lacks a full URL).
• Rapa Nui: volumen de pasajeros se acerca a los registros prepandemia - Ladevi Chile. (2025, April 21).
• PLAN DE VUELO - DigitalOcean. (Note: This appears to be a link to a file hosting service, not a specific article title).
• LATAM Airlines alcanza récord de pasajeros y crecimiento financiero en 2024. (2025, February 3).
• ¿Nuevas aerolíneas a Chile? Algunas opciones que podrían aparecer - El Aéreo. (2025, February 15).
• Resultados Cuarto Trimestre y Año Completo 2023 | LATAM Airlines Group SA. (2024, February 22).
• Una de las aerolíneas más importantes del mundo anuncia su llegada con vuelos directos a Chile - En Cancha. (2024, September 21).
• Las aerolíneas más puntuales del mundo en 2024 - CNN en Español. (2025, January 2).
• Más pasajeros, pero menos ingresos de divisas: los contrastes del año donde el Turismo Receptivo volvió a crecer - Heyzine. (2024, December 23).
• Latam Airlines: Chile destaca en crecimiento operacional de la aerolínea en Latinoamérica. (2025, March 20).
• Latam prevé incrementar un 20% transporte de pasajeros y carga a 2023 | Diario Financiero. (2023, January 20). (Note: This source is from 2023, older than the requested 2024/2025).
• Resultados 4T 2024 - Latam Airlines Group. (2024, December 31).
• Tamaño del mercado de transporte aéreo de carga en Chile - Mordor Intelligence. (Note: This is a market research report listing, not a specific article URL).
• Resultados 1T 2025 - LATAM Airlines Group lleva su margen operacional ajustado al 16,8% en el primer trimestre y reporta una utilidad neta de US$355 millones. (2025, April 28).
• Latam cierra un histórico 2024 con ganancias por US$977 millones, casi un 70% más que el año anterior - Emol. (2025, January 31).
• JetSMART confirma procesos para reducir alta cantidad de reclamos de pasajeros. (2024, April 16).
• Latam cierra un histórico 2024 con ganancias por US$977 millones, casi un 70% más que el año anterior - Fedetur. (2025, February 4).
• Latam cierra el 2024 con los mejores resultados de su historia: ganancias se disparan en casi un 70% - La Tercera. (2025, January 31).
• Preguntas Frecuentes - Argentina | JetSMART.com. (Note: This is an FAQ page for Argentina, not specific to Chile industry analysis).
• JetSMART en Colombia: récord de 2 millones de pasajeros - El Aéreo. (2024, October 11).
• JETSMART CON EL 13% DEL DOMÉSTICO - T News. (2024, September 24).
• SKY cierra el primer semestre con un crecimiento de 30% en comparación al último año sin pandemia - SKY Airline - Blog. (Note: This source is from 2022, older than the requested 2024/2025).
• Flujo de pasajeros en vuelos locales e internacionales al alza en primer bimestre | aerolíneas | Dirección General de Aeronáutica Civil | aeropuertos | empresas - Gestión. (2024, April 22).
• INFORME DE DESEMPEÑO - Concesión del Segundo Grupo de Aeropuertos de Provincia 2023 - Organismo Supervisor de la Inversión en Infraestructura de Transporte de Uso Público. (Note: This source is a 2023 report).