The Tico Times / March 3, 2000
By Larry Luxner
SAN SALVADOR -- Grupo Taca, already Central America's dominant airline, is rapidly consolidating its smaller, profitable regional operations while expanding routes to faraway South American destinations.
Taca's five domestic carriers currently operate over 170 flights a day within Central America. The six are Sansa (Costa Rica), Aeroperlas (Panama), Isleña (Honduras), La Costeña (Nicaragua) and InterGuatemala.
"Those airlines were purchased to connect Central America in two ways: point-to-point operations within countries, and as a jet feeder service," says Mark Kuhns, Taca's vice-president of regional airlines. "We've created these companies internally, through startups, and have acquired equity shares in others."
Kuhns, interviewed at Taca headquarters in San Salvador, says these regional airlines -- which hauled over one million passengers last year -- generate annual revenues of $70 million for the parent company. Together, they enjoy a 50% share of the regional airline passenger market and a 35-45% slice of the regional air-cargo market. Taca's main competition within Central America, he said, are charter airlines and aerotaxis.
"We are moving toward a major consolidation of all our regional airlines," he said."We're going to make it affordable for people to travel to major capital cities with more frequencies per day on smaller, more economical aircraft. Our whole goal is to standardize air transportation throughout Central America."
Most of Taca's regional airlines provide a city-to-city service within the country they operate. In the future, said Kuhns, they'll increase their capacity to operate international flights to main Central American gateway cities.
At the moment, Taca serves 66 Central American destinations, including 14 in Costa Rica: San José, Quepos, Golfito, Coto 47, Puerto Jimenez, Palmar Sur, Punta Islita, Nosara, Liberia, Tambor, Tamarindo, Barra Colorado, Tortuguero and Samara.
"In Costa Rica, 90% of our passengers are tourists and 10% are business travelers," he said. "In Panama, it's exactly the opposite."
Taca's regional fleet consists of 46 turboprop aircraft, including 23 Cessna Caravans, nine Shorts-360s, six Twin Otters and six ATR-42s. The idea, however, is to standardize Taca's fleet with 36-seater Short-360s and 48-seater ATR-42s.
Currently, flight reservations are made in each country. Taca's goal is to create a compatible program to connect with Sabre, Grupo Taca's common reservations system.
"The domestic regional carriers offer our customers more frequent travel options to a greater variety of destinations," said Kuhns. "In addition, these operations provide Grupo Taca an excellent cost structure and scheduling flexibility to continue feeding our jet operation. This coordination is an excellent example of how we continue to implement our merger integration plans at Grupo Taca."
While focusing on Central America, Grupo Taca has also set its sights on the expanding South American market. In January, Taca began offering nonstop service between San José and Buenos Aires, utilizing Airbus A319s and A320s. The airline also recently established a subsidiary, Taca Peru, which has already begun offering domestic service within Peru, connecting the cities of Lima, Cuzco and Iquitos. The airlines to begin offering international service in the near future.
"Taca Peru is another milestone in the growth of Grupo Taca," said the airline's executive president, Federico Bloch, in a prepared statement. "Our track record in success-fully integrating Central America with 35 major cities in North and South America and the Caribbean is indicative of the success we anticipate in Peru. Lima is the ideal hub for South America, and we anticipate transforming it into a prime business and tourist center."
Said Kuhns: "Taca-Peru allows us to eventually create a hub operation down there. We don't consider it a regional operation now, but we hope to in the future."