News / Kalitta Air eyes Quito as overcapacity hits Chilean market

Falling rates and overcapacity in Chile is thought to be behind Kalitta Air’s new operation in Ecuador.

GSA Choice Cargo said today that it is launching operations with Kalitta out of Mariscal Sucre International Airport (UIO) in Quito, to Miami. It will have two services a week, on Tuesdays and Fridays, on a 747-400F, although it is unclear for how long the pair will operate the service – one source indicating it was likely only temporary.

A spokesperson for Quito airport explained: “The airline is operating charter flights now, but it is working to have the permits to operate regularly.”

The service, which launched last month, will directly rival another recently started operation on the same route. In July, wholesaler Solent Freight Services also began a twice-a-week service on Wednesdays and Saturdays, with a SkyLease 747. Martinair also operates between Quito and Miami.

One local airfreight executive said: “This is not a natural route for Kalitta. It is doing it because there is too much capacity now in Chile. Rates are down in Santiago so Kalitta is going to investigate the Ecuadorian market.”

Choice Cargo said the new capacity would help Ecuadorian exports, in particular the flower market.

“The start of operations of Choice Cargo in the Ecuadorian market represents a very important advance in terms of the offers of space to export cargo leaving Quito,” said Ramón Miró, CEO of Corporación Quiport.

“The flower sector, our main user, has registered a significant increase in terms of its production and its ability to place Ecuadorian flowers on international markets, and this cargo operation will help us meet the needs of exporters.”

While the new service is slated as supporting Valentine’s Day exports, which will start in January, the export season for Chilean cherries is set to begin next month, lasting until January, so some observers expect capacity to shift out of Ecuador again in October.

Observers noted over the summer that Santiago faced heavy overcapacity, with 11 weekly Atlas flights, six flights with Ethiopian, DHL has five flights and LATAM has multiple daily freighters, as well as Avianca freighters.

According to Freightos Air Index, rates from Miami to Santiago have been falling, and are currently at $6.04 per kg, while rates from Chicago to Quito are also falling, currently at $4.84. Miami to Americas, Latin & Caribbean is also down, at $2.28. Meanwhile the TAC Index has reported that rates have dropped steadily from Miami to South America since 15 August, with its rate index reporting $3.10 per kg.