MercoPress. South Atlantic News Agency

JetSmart discontinuing Buenos Aires-Montevideo route

JetSmart's expectations were far from being met, it was explained

Chilean budget carrier JetSmart announced it would be lifting the Buenos Aires-Montevideo effective Oct. 1 route after finding it unprofitable, particularly when no subsidy was obtained from the Uruguayan government. The service had been operational for only four months.

JetSmart's decision “was an unpleasant surprise,” Uruguayan Foreign Minister Omar Paganini said about the airline's two daily flights between the Jorge Newbery and Carrasco airports. When things did not turn out as planned, JetSmart asked the Uruguayan government for a US$ 100,000 subsidy which was not granted after tourism authorities in Montevideo found the amount to be excessive.

The low-cost airline's participation had forced Aerolíneas Argentinas, the other operator of the route, to adjust its fares to remain competitive. However, with the future of Buenos Aires' flag carrier also in the balance, air travel between the capitals of Argentina and Uruguay has fallen into uncertainty. The Libertarian Government of President Javier Milei is already holding talks to privatize the company or some of its services amid growing labor protests that keep affecting travelers.

JetSmart's CEO Estuardo Ortiz told Uruguay's Ambassador in Buenos Aires Carlos Enciso that the carrier did not have “a specific promotion scheme or sufficient incentives” to keep up the service that started in late May. Ortiz acknowledged that JetSmart had experienced “conditions that do not contribute to the sustainability of the operation,” which reinforces the difficulties airlines face when trying to establish routes in highly competitive markets. The company has foreseen 127,000 passengers during its first year of operation on this route, but demand stood far below those figures. JetSmart also cited the high tax burden and competition with other means of transport as factors in the route's inviability.

Enciso claimed that the Montevideo-Buenos Aires connection had shown a “performance in line with expectations,” indicating that there were optimistic prospects for its future. The diplomat also expressed his “deep concern”, seeking to open a “channel of communication” to discuss possible alternatives that could reverse the situation.

However, Ortiz was skeptical that a solution could be found given the Uruguayan government's reluctance to aid private companies. The executive also insisted that governments assisting airlines was common practice elsewhere because routes depended entirely on seasonal factors and specific demand, which can lead to the temporary suspension or permanent cancellation of certain services deemed unsustainable.

When JetSmart announced the new route back in March during a ceremony at Enciso's residence, it had also argued that the Montevideo shuttle was to serve as a feeder for the Aeroparque Jorge Newbery-Asunción service. Back then, Enciso was said to be pivotal in brokering these services since 2021.