Peruvian domestic carrier Aero Continente is investing $10 million in setting up an airline in Chile.
The company will take a 49% stake in the airline - the maximum permitted under Chilean law. The remaining stake will be held by a group of Chilean investors led by airline pilot and businessman Felix Gonzáles. The airline will be called Aero Continente Chile.
Aero Continente president Lupe Zevallos said during a visit to Santiago, Chile's capital, that the investment was the company's first step towards becoming an international operation.
The new airline, due to begin services within three months, will first serve the cities of Santiago, Arica, Iquique, Antofagasta, Concepción, Puerto Montt and Punta Arenas with a fleet of four Boeing 727s, including one -100 and three larger -200s.
It intends to undercut the fares of airlines belonging to the LAN group (including national carrier LanChile and Ladeco), which enjoy a 75% share of Chile's domestic market.
Aero Continente's entry into the Chilean market is possibly a retalitary response to LAN's previously disclosed plans for a Peruvian domestic division.
At a later stage, Aero Continente Chile intends to operate international routes connecting provincial cities in Peru, Bolivia and Argentina. These journeys presently require lengthy connections to be made.
Source: Flight International
