U.S. Airlines Flocking To Latin America

After three years of cutbacks and losses, U.S. airlines are gearing up to capture the profits they expect from their fastest-growing international market: Latin America. Healthier economies in the USA and Latin America, and improved political and monetary stability in Latin America, are rekindling the aggressive growth in flying capacity that preceded the September 11, 2001, attacks, according to the USA Today.

Capacity in the U.S.-Latin American market – which includes Mexico, Central and South America and the Caribbean – has been down about 8% since 2000. Airline planners say there´s huge growth potential in Latin America, a 400 million-person market that is still in its economic infancy. Latin America trails only the mature U.S.-Europe market in passengers on U.S. carriers. "It´s where the action is," says Bob Booth, chairman of AvMan, a Miami consulting firm that specializes in the Latin American aviation market. Getting in on that action:

• American, the dominant U.S. airline in the market, with 44% of U.S. carrier revenue, expects to grow 10% a year in the region over the next five years. Higher-fare markets are the target.

• Continental, # 2 in the region and the leading carrier on U.S.-Mexico routes, is boosting Mexican service and adding capacity to its Latin destinations from both its Houston and Newark, N.J., hubs. It also is looking to grow in the Caribbean.

• Delta plans to continue the 10% growth rate it has achieved in the region the past five years despite cutbacks immediately after the September 11 attacks. Most of the new service will be tied to its giant Atlanta hub.

• US Airways is "expanding like crazy in the Caribbean (and has) eyes on South America," Booth says. That could reduce its reliance on high-cost domestic flying.

• Spirit is seeking government approval to fly from Fort Lauderdale, Florida to 10 points in the Caribbean and Central America.

• United, meanwhile, will launch service this year to Puerto Rico and Costa Rica from its Washington Dulles hub. But it has slipped from # 2 to fourth place in the region since 1991 when it bought Pan Am´s Latin American route network. It has said it will drop its last two Latin American routes from Miami, defeated by the passenger-pulling power of American´s Miami hub.