Friday 2 December 2022

Is The Low-Cost Airline Model Crashing in Costa Rica?

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2 December 2022 - At The Banks - BCCR

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Veca Airlines on Tuesday suspended all flights to and from Costa Rica. The airline says it is undergoing a “restructuring” process.

Q COSTA RICA / A few months back the lines for seats on low-cost airlines with their offers of cheap flights within Central America were long.

Volaris, Veca and Wingo took to the skies with no-frills and cheap fares. The big names, Avianca and Copa followed.

But is it all crashing down?

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On Tuesday Veca Airlines, the Salvadoran low-cost airline, cancelled flights to and from the Juan Santamaria (San Jose) airport.

In addition, it is not possible to buy tickets for future travel. The airline’s website is on “maintenance mode”, visitors are being asked to contact customer service for information on flights and refunds. A check by the Q reveals that the San Jose (Costa Rica) airport office telephone is not in service.

Costa Rica’s Directorate General of Civil Aviation has not been able to confirm what is happening with Veca Airlines, saying only until it had not received (as of Tuesday) any request to cancel flights. According to Ingrid Madriz, of Transporte Aereo, airlines are required to file suspension of flights at least 30 days prior.


Meanwhile, in El Salvador, La Prensa Gráfica reported only that the Salvadoran Civil Aviation Authority (AAC) had no information on the current situation of the airline.

The La Prensa Gráfica added that other Salvadoran media reported on the company’s financial problems, resulting in layoffs this week.

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The Salvadoran news Elsalvador.com , however, had mor to say, reporting that Veca’s representative, Jose Luis Merino, confirmed the airline has suspended operations for the next three months, “while the company will be undergoing a restructuring process that begins next week.”

Merino added that the airline “will return” the second aircraft it leased for its operations, an Airbus 319 leased from AERCAP, an Irish company, that it has cost the airline US$800,000 dollars so far.

Merino added that the airline will be looking for “smaller aircraft” to reduce costs and maintain regional operations that include Guatemala, El Salvador, Nicaragua and Costa Rica.

The president of the AAC, René López, told elsalvador.com that the airline, that began operations in 2013, would not close, but would merge with another airline.

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Last week, on January 11, Wingo Airlines confirmed the cancellation of its San Jose – Guatemala route, citing low market demand.

For the time being, Volaris, on the other hand, is upping its game announcing new flights to El Salvador.

And both Avianca (Colombia) and Copa (Panama) airlines have launched promotional prices for travel within Central America.

In second half of 2016, with the arrival of the low-cost airlines competiting for passengers, the cost of travel within the region came down drastically.

For example, currently rates for flights from San Jose to destinations like Panama, Guatemala and El Salvador are under US$100, both at the low-costs and major airlines. Before the arrival or the low-cost airlines, passengers had only the major airlines, with at cost more than double the current to these destinations.

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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