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Ecuador Aviation: liberalising and courting LCCs
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Ecuador Aviation: liberalising and courting LCCs

Growth among Ecuador"™s airlines has slowed during the last few years based on seat deployment as the country dipped into a recession during 2016. Even as it returned to positive economic growth in 2017, Ecuador"™s growth prospects remain below historical levels for 2018 and 2019.

Ecuador"™s largest airline state-owned TAME has also cut its seat supply during the last few years, and more recently has undertaken a restructuring with loans from the government as it pledges to bolster revenue and slash costs.

Low cost airline penetration in Ecuador remains low. JetBlue offers service from Fort Lauderdale to the country"™s largest airport, Quito, and Spirit in Mar-2018 launched flights form Fort Lauderdale to the country"™s second largest airport, Guayaquil. Even as Ecuador holds promise for passenger stimulation, expansion of air travel could remain tempered until its economic growth returns to more normal levels.

After Ecuador has emerged from a recession, its economic growth remains below historical levels.
As Ecuador"™s economy grew weaker, available seats in the market have dwindled.
The country"™s flag airline TAME is undertaking a restructuring as Ecuador adopts a liberalised mindset, with a new open skies policy.
Low cost airline penetration in Ecuador remains low, but the US ULCC Spirit recently launched flights to the country, and the government is working to court LCCs to launch service to the country.
Even as Ecuador’s recession is over, its economic growth remains sluggish
The major economic headlines from Latin American during the past few years have centred on Brazil"™s recession and emergence from economic decline.

But as the International Monetary Fund (IMF) highlights "“ Ecuador is also emerging from a recession. Its data show Ecuador"™s GDP declined 1.6% year-on-year in 2016 before rebounding to an increase of 2.7% in 2017. The IMF"™s projections for GDP growth in Ecuador for 2018 and 2019 are 2.5% and 2.2%, respectively.

The IMF characterises Ecuador"™s forecast 2018 GDP growth as below historical averages. Data from the World Bank show that between 2006 and 2015 Ecuador"™s GDP averaged 4.3%, driven by high oil prices and external financing. Oil exports are a significant driver of Ecuador"™s economy…

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