The Argentines got into the bad habit of flying in modern aircraft and will now have to return to basics and feel good again with the goodnesses of the Boeing 737-200, a 70´s machine that never ceased operating in these skies, although lately had to learn to share marquees with much more modern aircraft.

Ten years ago now Aerolíneas presented its MD-88’s just out of the assembly line, and took a wide step in the quality of the machines the passengers of these pampas was to board. A while after, the creation of Southern Winds (SW) incorporated the Bombardier Canadier Regional Jet into the market and self proclaimed itself the company with the “most modern fleet of the country”.

Everything happened during the 90’s decade, when the ticket sales indexes reached never before recorded levels and the already extinguished LAPA allowed itself the luxury of incorporating eight Boeing 737-700 Next Generation, the same ones Copa Airlines uses today for its International Flights between Buenos Aires and Panamá.

Nevertheless, since a couple of months ago the 737-700 are not seen in the Argentine air space (LAPA changed its name for AIRG and returned those eight machines it had brought in 1999, for which it paid two million dollars a month for their leasing) and some rumours indicate that SW will return at least two of its modern Regional jets, even though the company denies such rumours.

What is confirmed is the arrival of more 737-200 to Argentina, in this case ordered by Southern Winds to replace their Bombardier Dash 8 models. The aircraft incorporated will be five 737-200 and it signed letters of intent to incorporate another five in 2003. And AIRG that is negotiating a merger with Southern Winds while this note is in the print, also incorporated this type of aircraft to its fleet. Is an invasion of old aircraft coming?

The Boeing 737 is the most sold unit in its category worldwide and a great part of the credit for this achievement belongs to the 737-200, which comprises a third of the whole 737 ordered in its different versions. Different airlines pointed out during its history the easy maintenance and the advanced aero electronics to rank the 737-200 as one of the most productive and economic aircraft in its class. But that was some years back.

Roberto Cittadini, sales director for Boeing in Argentina, Chile and Perú did not want to assure that something like a flood of orders for those old models would occur, although he did say that “when economies weaken, airlines take on cheaper planes. And the truth is that there are plane models that are practically a give-away”, without mentioning it but referring to the 737-200.

According to market data, the leasing of one of these machines costs 80.000 dollars per month, while the immediately next model, the 737-300 is priced at around 200.000 dollars. Great difference between one and the other without the 737-300 being the paradigm of modernity...

Long term planning

Decidedly, the months long recorded retraction in the air market in the Argentina forced the Airlines to reduced costs. Above all after devaluation of the local currency, that generated a hike in fuel of more than 150% and put the companies in a real tight spot for complying with the paying of the leasing of the planes, contract agreed in dollars.

“It has not been a good year for Latin America in general, and for Argentina in particular”, Cittadini acknowledged through a telephone conversation with AIR MARKET.

How do you see the market evolution in Latin America?

Boeing projections assure that the growth of the Latin American market exceeds the world average although, logically, momentarily things are seen different, but this responds to a concrete situation.

We observe the evolution of a market the last ten years and from there we project to the following twenty, taking also into account the regional economic growth perspective. Although Latin America is badly hit at the moment, we foresee the region's growth at about 7% for the next twenty years.

Is it a good figure?

Sure it is. Latin American growth in the latest years had been exceptional: It was slightly over 8%, while in the United States it was 6% and it did not pass that figure even.

I repeat: some of these figures vary a little, but we are talking long term trends and not a one-time issue, because maybe one year is better than another.

Proof of this is that despite the actions on September 11^th last year, projections are still the same as before the attacks.

Of course. Because, as you know, passenger traffic growth is related to economic activity, to the GNP variation. And at times when not even the economists can make a projection on how the GNP will vary, it is impossible to estimate how the air traffic behaviour will be in the short term.

Michael J. Tull, Sales communications manager for Boeing, pointed out they trust the “recovery will take place at the end of this year or at the beginning of 2003”.

But Brazil is something else... Brazil is a world apart within South America. There the airlines operate aeroplanes the type of the A319, A320 or the modern B737-700 for their domestic flights. A luxury few South American countries can afford. A luxury very far from Argentina.

The 767 is back

Not all are pessimistic news in the Argentine market. After slightly more than a year, a local airline has a Boeing 767-300ER in its fleet. The last and also first had been LAPA, that in its times of glory counted two of these aircraft to link Buenos Aires with Atlanta, route which it started operating around mid 1999 and cancelled in April 2001.

Now Southern Winds (SW) is the one that will use them to fly to Miami (its already started on August 15^th) and Madrid (as from September 1^st).

The innovation is an intermediate class between tourist and business class called Surf, on these machines, which will have the same seats as the business class although they will not be able to be reclined as those. “The ticket price in Surf will be slightly higher than Tourist, but the advantage lies on that besides the seats are more comfortable there is more space between them” Juan Maggio, president and founder of SW explained.

From Seattle, Roberto Cittadini, sales director for Boeing for Argentina, Chile and Perú, explained that the use of space to construct the Surf class is not something usual, and commented that “ we have many alternatives which we offer a client when he buys a new plane, but the final decision, of course, is taken by the airline according to its commercial policy.”

Cittadini added that the best option to choose the aircraft they would use for the launching of the company’s international flights, was being analysed together with Southern Winds directors since two years back. “We presented several ideas and spoke a lot so as to incentivate their thoughts, but really it was not us who led them to focus this idea in particular.” He said. “What we did was display a spectrum of possibilities and guided them as to how to think the process, but we did not take them by the hand to choose between one alternative and the other”, he concluded.