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Airlines in Chile Current Behavior Changes Analysis

Ongoing Behavior Changes

The current analysis of the Chilean airline industry, based on recent data from 2024 and early 2025, reveals several ongoing behavior changes among final customers (both B2C and B2B) that are significantly impacting relationships and demand within the value chain.

A primary behavior change observed is the robust recovery and growth in passenger volume, particularly within the Business-to-Consumer (B2C) segment. LATAM Airlines Group reported a record 82 million passengers transported in 2024 across its network [Current Demand Behavior Analysis: Demand Behavior]. Projections for the summer season of 2024-2025 anticipated 3.6 million domestic passengers in Chile for LATAM and 1.6 million for SKY Airline, indicating sustained high demand for domestic travel [Current Demand Behavior Analysis: Demand Behavior]. This reflects a strong inclination among individual consumers to travel, likely driven by a return to leisure and tourism activities following previous disruptions.

Complementing this overall growth is the increasing preference for and adoption of low-cost and ultra-low-cost travel options. SKY Airline and JetSMART, both operating on cost-efficient models, have captured significant domestic market share in Chile (25.8% and 11.8% respectively as of March 2025) [Current Demand Behavior Analysis: Demand Behavior]. JetSMART's substantial 52% increase in passenger volume between 2022 and 2023 further underscores a consumer behavior shift towards price sensitivity and a willingness to fly with carriers offering lower base fares [Current Demand Behavior Analysis: Demand Behavior]. This behavior is intrinsically linked to the low-cost carriers' reliance on ancillary services, as passengers increasingly purchase unbundled services like checked baggage, seat selection, and priority boarding, making these add-ons a critical part of the customer transaction and airline revenue [Value Chain Definition: Ancillary Services, Value Chain Relationships and Business Models].

In the Business-to-Business (B2B) segment, the demand behavior for air cargo services remains consistent, particularly for the transport of "high-value cargo" [Value Chain Analysis: Introduction, Final Customers Identification: Customers Categorization]. Businesses continue to rely on the speed and efficiency of air transport for certain goods, influencing this specific part of the value chain.

Changes are also noted in international travel patterns. While overall passenger volumes are increasing, some international airlines have reportedly reduced frequencies or withdrawn services to Chile, while others, like Turkish Airlines, have announced new direct routes [Current Demand Behavior Analysis: Demand Behavior]. This mixed behavior indicates a dynamic international market where customer demand and airline strategies are shifting.

Finally, there is an observed behavior related to customer expectations regarding service quality and the propensity to lodge complaints. JetSMART, as an ultra-low-cost carrier, has specifically acknowledged and is working to reduce the high number of passenger complaints [Bottlenecks and Challenges, JetSMART profile]. This highlights that while price is a major driver for a segment of the market, the customer experience, including reliability and service during disruptions, remains important and influences customer satisfaction and potentially future booking behavior.

Table of the impact of these changes on the value chain:

Value Chain Step Impact of Ongoing Behavior Changes
Aircraft Acquisition & Maintenance Increased passenger volume necessitates fleet expansion and potentially accelerated acquisition/leasing. [Bottlenecks and Challenges] Growth of LCCs/ULCCs drives demand for standardized, fuel-efficient aircraft (e.g., A320neo family). [SKY Airline profile, JetSMART profile] Higher utilization rates from increased demand put pressure on MRO efficiency. [Value Chain Definition: Aircraft Acquisition & Maintenance]
Network Planning & Scheduling Growing domestic and regional demand (B2C) reinforces focus on expanding and optimizing routes serving these segments. [Current Demand Behavior Analysis: Demand Behavior] LCC/ULCC growth emphasizes point-to-point network development and scheduling for rapid turnarounds. [Value Chain Relationships and Business Models] Shifting international patterns require dynamic route adjustments by international carriers. [Current Demand Behavior Analysis: Demand Behavior]
Marketing & Sales (Distribution) Increased price sensitivity (LCC/ULCC growth) intensifies focus on low-fare advertising and direct online sales channels. [Value Chain Relationships and Business Models] Ancillary services become a more critical marketing and sales focus, requiring effective strategies to encourage add-on purchases. [Value Chain Definition: Marketing & Sales, Value Chain Relationships and Business Models] Managing customer perception based on price vs. service becomes key. [Bottlenecks and Challenges]
Passenger & Cargo Handling (Airport Operations) Higher passenger volumes increase the load on check-in, security, and baggage handling. [Current Demand Behavior Analysis: Demand Behavior] LCC focus on fast turnarounds demands highly efficient ground operations. [Value Chain Relationships and Business Models] Addressing passenger complaints requires improved processes in handling and communication during airport operations. [Bottlenecks and Challenges, JetSMART profile] Consistent cargo demand requires maintained cargo handling efficiency. [Value Chain Analysis: Introduction]
Flight Operations Increased flight schedules due to higher demand require robust flight crew management and efficient flight execution. [Current Demand Behavior Analysis: Demand Behavior] Personnel shortages (pilots, technicians) are exacerbated by the need for more operational capacity to meet demand. [Bottlenecks and Challenges] Focus on fuel efficiency is influenced by cost pressures (partly driven by competition from price-sensitive models). [Value Chain Definition: Flight Operations]
Ancillary Services Growing customer willingness to purchase unbundled services directly increases the revenue generated at this step, particularly for LCCs/ULCCs. [Value Chain Relationships and Business Models] This reinforces the business models reliant on ancillary revenue and drives innovation in ancillary offerings and sales integration. [Value Chain Definition: Ancillary Services]

References

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