I’ve been fairly critical of the Morales administration over the last few months; despite that, I feel the government has done a number of inspiring things. Giving poor families cash to keep their kids in school probably tops the list, but the government’s success with BoA, the state airline launched in 2009, also deserves mention. The Washington Post has the write-up:
Bolivian airline a model operation
In just three years, Bolivia’s state airline has pushed aside private carriers, bucking an international trend toward privatisation while becoming the leader in domestic flights for a poor Andean country where flying remains a luxury.
Boliviana de Aviacion (BoA) has abolished first class and sells all seats for the same low prices, marketing the flights with a socialist stamp in keeping with President Evo Morales’ insistence that ‘all are equal’.
The story of how BoA has managed to fly high while governments elsewhere have been privatising or bailing out their state-run carriers reflects shrewd timing in filling a void in the market, as well as cut-rate fares that have attracted a growing clientele.
BoA now controls about half of Bolivia’s domestic air travel market. As its routes and earnings have grown, it has announced plans to expand its fleet by buying as many as six new Embraer 190 planes from Brazil.
‘BoA has been an interesting bet on the government’s part,’ said Armando Mendez, an analyst and former president of Bolivia’s Central Bank. ‘Little by little, it has captured more acceptance and it competes with the private company AeroSur.’
Mendez said BoA seems to be bringing healthy competition to Bolivia, where five airlines battle in a market of about 1.5 million passengers a year. The airline has successfully filled a gap left by the 2007 failure of Lloyd Aereo Boliviano, a former state-run company that went bankrupt after failed attempts to privatize it.
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BoA won over clients by offering two-for-one deals during its first year in 2009. Since then, it has kept fares low, and its main competitor AeroSur has accused BoA of unfair pricing tactics and subsidies.While AeroSur charges about $US245 ($A236) for a round-trip adult ticket between the cities of La Paz and Santa Cruz this month, BoA charges about $US190 ($A183). It also offers discounts for the elderly and children.
