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Dear friends and Customers:

We would like to make a general summary of our personal perception of what we think is the current situation of the airlines and the effect in our business. Economic Situation:
As a result of the global increase of the value of the American dollar, South American Countries such as Colombia, Bolivia, Chile, Peru, Venezuela and Brazil have been affected when it comes to imports. Local prices on import products have increased at least 30% to 40%, affecting local consumers.
This situation generated a decrease on southbound cargo and it is estimated that airlines are flying south with a 40% of empty space.
Most airlines cannot keep covering the actual routes and have reduced frequencies.

With the current market situation airlines are having very low cargo loads going to South America, The Southbound cargo rates have gone down by at least 50% in the last calendar year. (In Colombia from around $1.20 a year ago to around $0.60 now) the Brazilian situation is even worse, as they as a country generate the biggest south bound volumes, most of the flights bringing flowers from Ecuador and Colombia are generated in this country. With this current scenario, airlines are adjusting rates by increasing up to $0.10 cents per kilo on the north bound freight for flowers. If this situation persists it is possible that airlines will come up with further rate increases.

LAN has reduced their capacity by 5 flights per week out of Bogota, decreasing their capacity for this origin, plus their ability to support growth in Medellin, as previously they would re direct Medellin surplus via Bogota. Avianca's fleet is being utilized at its maximum capacity, leaving no space for them to offer additional space for any of the origins they cover. (Quito, Medellin, Bogota) Centurion (Transcaribbean in Quito) has increased the size of their fleet and type of airplane and even though with the current fuel situation the type of airplane they own are very cost efficient (less expensive lease for older airplanes, not fuel efficient, but with less expensive fuel their cost is very competitive) still with out south bound cargo no airline can compensate this efficiencies. Please plan ahead as much as possible, send us projections, avoid concentrating bigger volumes on any given day, spread over several days if possible and unfortunately, expect some delays. For coming holidays please consider using sea freight options, if so, let us know so we can plan ahead together. Please understand these comments are our personal interpretation of what we see happening, what the airlines share with us and what ever we can add from our own experience.



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