E-NEWS UPDATE VOLUME 19 NUMBER 0903

TCS: DOUBLE-DIGIT LATAM GROWTH

Is the headline in an August 31 article in the Latin Business Chronicle which starts out with the sub headline: "Indian tech company TCS expects double-digit growth in Latin America this year despite the global crisis." The Indian IT company, Tata Consulting Services (TCS), is weathering the global crisis well, boasting a 12% revenue increase in the latest quarter ending June. Latin America is no exception. The company expects to see sales growth there of between 15% and 20% this year. According to Mario Tucci, vice president of Latin America marketing and alliances for TCS, the company has seen a 25% increase in Latin America offshore business to US companies this year. TCS operates Global Delivery Centers (GDC) in Brazil, Uruguay, Argentina and Mexico and BPO centers in Chile and Uruguay. Its Latin American-related customers include Brazilian oil giant Petrobras, Avianca and ETB in Colombia, Spain's Grupo Santander, Alestra (AT&T), Mexico's Telcel, UK-based Equifax, US-based Motorola and Brasil Telecom. For the complete, 'must read' article, go to www.latinbusinesschronicle.com. So where's the crisis?

COLD-STORAGE AIR CARGO FACILITY TO OPEN NOVEMBER 1 AT IAH

Houston Airport System and Trammell Crow announced that Tradewinds Cargo Handling signed a lease to operate a new 61,484 square-foot cold-storage air cargo facility at George Bush Intercontinental Airport beginning November 1. The intent is to establish Houston as a major gateway for temperature and time-sensitive air cargo. The facility is the first of its kind in Houston in size and scope and allows airlines and logistics managers to better serve the market

THE E-FUEL MANAGER BY LARRY S.WEAVER

Jet Fuel consumption still continues in a slump - down over 12% from a year ago although prices are nearly $1.50 per gallon less than they were a year ago. The passenger - and cargo - demand just don't seem to be there. As noted in AvNews for August , however, generally RPK/RPM were up in Latin America although ASK/ASM were down. Filling more seats but flying less aircraft - that is good - and with less expensive fuel, economics are looking better. Prices for the week are down almost across the board although only about $0.01 per gallon. Those on monthly price basis, however, have seen an increase of about $0.1500 per gallon as the monthly price catches up to the market.

OPEC has all but confirmed - even prior to their meeting next week - that there will be no change in the production quotas. There does appear to be more "cheating", however, as the various members try to maximize their individual returns by maximizing their own sales in the sluggish market. As a result, with some increases in demand - overall demand is actually up 0.1 percent from last year - crude stocks slid slightly in the US while jet stocks climbed some more. As the market has essentially already acknowledged the lack of change in OPEC production, we can expect very little change in the pricing levels after their meeting. Although prices are sliding this week, we expect that they will firm and continue pushing up towards that $75 per bbl mark as the economies of the world start the climb back up from their depths.

Other news, briefly

Continental Airlines August 2009; RPMs down 6.1%, Latin America up 0.2%

In August, Continental flew 8.8 billion consolidated revenue passenger miles and 10.2 billion consolidated available seat miles resulting in a consolidated traffic decrease of  3.9% and a capacity decrease of 6.0% compared to August 2008. Consolidated passenger revenue per available seat mile (RASM) is estimated to have decreased between 16.5% and 17.5% compared to August 2008. Latin American traffic grew with RPMs increasing 0.2% on an ASM increase of 1.6% moving the load factor down to 83.1%, 1.2 points lower than in August 2008.

AeroSur representing Bolivia at World Routes

We reported in the August 27 issue of E-News Updates that AeroSur celebrated its 17^th birthday serving seven domestic and eight international destinations while looking to launch service to Colombia and Mexico later this year. It was interesting to note that the airline will participate in the upcoming World Routes in Beijing next week which might signal they are looking to serve even more markets.

AeroVip ready to relaunch in Argentina

While neither Pluna nor Leadgate are involved in the "born again" Argentine domestic airline, our sources maintain that senior management at the Uruguayan "born again" airline are involved in the plan to relaunch AeroVip. According to Portal del Uruguay, the airline will reinstate service within Argentina as well as serving the air bridge between Buenos Aires and Montevideo. The airline will be receiving several CRJ900 aircraft which will be maintained by Pluna. Stay tuned.

David Neeleman thinks Brazil is a good place to do business in America

This from an article in the August 29-September 4 issue of The Economist covering Brazilian-born David Neeleman's latest entry into the airline market with the founding of Azul Linhas Aereas. It was launched in December of last year and is now the third largest in the country. On some routes his fares are actually cheaper than bus fares. Well done, David and keep up the good work.

Avianca and Delta are reinstating their code share agreement

As of September 7 the code share agreement will be expanded to include flights to 14 destinations in the US and five in Colombia. Delta will place its code on Avianca flights within Colombia and Avianca will do the same on 14 flights operated by Delta to and from the United States. Way to go!

IATA: air transport sector a "disaster"; set to lose $9 billion

Is a statement by IATA's Giovanni Bisignani in a speech to JURCA, the association of airlines operating in Argentina. The meeting was held in Buenos Aires where the president of IATA spoke about the problems facing the airline industry, where he agreed to work as a consultant with the government of Argentina to help with the re-birth of Aerolineas Argentinas.. What he failed to mention was that airlines in Latin America, like the four "model airlines" (Copa, LAN, TAM, GOL) were all profitable in the first six months of the year and likely to continue that positive performance in the balance of 2009 and beyond. Stay tuned.

The battle for the River Plate to be decided this month

The Uruguayan Civil Aviation Authority is supposed to make decisions shortly on the applications presented by competing airlines, which are competing for the same routes. BQB, the startup airline has applied for routes in direct competition with Pluna, domestically as well as service to Buenos Aires, Miami and Madrid. SOL Uruguay, the local subsidiary of the Argentine airline, has applied for Montevideo-Madrid. Obviously Pluna is upset because of the potential competition. Stay tuned.

JetBlue and Lufthansa sign code sharing agreement

The two carriers have announced a code sharing agreement which will open up new opportunities for both carriers to place their codes on flights operated by each other

between the US and Europe as well as within the US and Europe. Lufthansa owns 18% of the US carrier. Sounds interesting for a LCC airline.

TACA to serve Roatan from El Salvador

The new daily nonstop flight will begin on November 1. The new service is part of the airline's plan to promote Central America as a tourist destination through its association with the region's tourism development agency. Central American traffic already represents 43% of the airline's total market. Way to go!

Passenger traffic in Peru has grown 6% in the first seven months of 2009

Domestic traffic in Peru has grown to 2,407,508 passengers for a 65 growth between January and July of this year, according to the minister of transport and communication, Enrique Cornejo. He also announced that international traffic has grown to 2,795,848 passengers in the same period for a growth of 8.09%. Viva Peru!