Colombian Regulator Rules in Favor of Avianca in Bogotá Airport Slot Dispute with LATAM

Colombian regulatory agency Superintendencia (SIC) ruled in favor of Avianca after the airline claimed that Chilean airline LATAM was offering flights from Bogotá without an assigned slot at the capital’s El Dorado International airport. SIC is the national authority for the protection of competition, personal data, legal metrology and consumer rights protection.

Avianca’s claim was generated because, according to the Colombian carrier, LATAM sold air tickets from last October through March without authorized slots. In the documents supporting the claim, Avianca shows that LATAM offered 6,137 flights to and from El Dorado International Airport without securing a slot, meaning a permit to take off or landing, assigned by the Special Administrative Unit of Civil Aeronautics (Aerocivil).

After an investigation that concluded last month, SIC reviewed the submission and ordered LATAM to cease immediately the promotion and operation of flights to or from Bogotá at times that do not have an assigned slot or approval necessary for its commercialization. It ruled that the Chilean airline must also inform all users who relevant LATAM tickets for flights without the approval slot and, if applicable, refund the fare or offer them the flight schedule for which the company does indeed have an available slot.

“It is very striking that in its statements, the dominant operator in Latin America, LATAM, considers that it is anticompetitive that a judge requires compliance with the law,” said Avianca CEO Adrian Neuhauser in a statement.

The Colombian airline also stated that SIC’s decision is a “milestone in respecting the slots” process and prioritizes free competition and user protection in a sector that needs momentum and clear rules.

Santiago Álvarez, executive director of LATAM in Colombia, accepted the ruling and noted that the Chilean airline will adhere to all requirements throughout the upcoming high-travel season.

“The passengers of LATAM Airlines Colombia and the market in general can trust that we comply with aeronautical regulations, and the flights to and from Bogotá for the season that will operate from October 29 to March 30, 2024, have the slot required, and they will be operated normally,” he said in a statement.

The Role of Slots in the Colombia’s Congested Airports

Airport slots, according to the SIC definition, are authorizations assigned in accordance with the airport capacity — either restricted or limited — that are approved by Aerocivil to each airline in order to guarantee viable operation.

The government entity clearly establishes that any company that plans to operate to or from Colombian airports must have the necessary slot approvals for the flights they intend to operate. In this way, the marketing and sale of flights should only be carried out at the times that have been previously approved by Aerocivil.

Aerocivil established the slots for those airports with limited or insufficient infrastructure and high levels of congestion such as El Dorado. The allocation of slots, as a capacity management method for this so-called Level 3 distinction of airports, has the purpose of “increasing the benefits to the maximum for the greatest number of airport users,” which allows Aerocivl to “guarantee the viable operation of the airport” as well as “increase to the maximum the efficient use of airport infrastructure,” as stated in the Aeronautical Regulations of Colombia.

The Largest Airlines in Colombia Continue to Grow

Avianca and LATAM are the two dominant airlines in Colombia. Despite experiencing a decline in passengers between 2017 and 2022, per Valora Analitk, Avianca has not given up its leadership position compared to other airlines. The appearance on the market of other commercial air transport alternatives and the blows of the pandemic explain the fact why Avianca fell from transporting 12.7 million passengers in 2017 to just 7.0 million in 2022.

Despite the drop, the carrier did not fall out of the top spot, staying well ahead of the 4.9 million passengers LATAM transported in 2022 (compared to 4.4 million in 2017).

Both airlines gained even more market share this year after the market exit of low-cost carriers Viva Air and Ultra Air. Between January and March, Avianca and LATAM reportedly took 11% and 6.6% of the market share of those failed airlines, per La República.

This uptick gave Avianca nearly half the Colombian market, tracking at 48.8% in the first quarter, whereas LATAM rose to 27.4% market share.

(Photo credit: LATAM)