Equair, an Ecuadorian airline, began operations in December 2021 with a trip between Guayaquil and Quito. A year and ten months later, the company halted operations due to financial losses. Equair aimed to give “the best service for the price” and gain 17% market share on major domestic routes. Their USD 34 million investment contract with the Ministry of Production was to be completed between 2021 and 2036.
Equair’s finances fell short of expectations. The airline reported a stunning 91% loss to the Superintendency of Companies in 2022. Sales were USD 18.8 million, but expenses were USD 31.4 million, resulting in losses of USD 17.1 million and a negative equity of USD 2.5 million. Their financial problems were exacerbated by a $7.5 million working capital deficit.
According to its market analysis, Equair suspended operations due to low profitability. Rising worldwide gasoline prices contributed to their operating expenses, which were largely fuel-related.
Equair had only begun flying to El Coca in August 2023, thus this closure was surprising. In response, the airline promised to help and advise its over 200 employees. Equair cooperated with LATAM Airlines Ecuador to relocate guests with advance tickets to their destinations without further charges.
LATAM relocated 2,000 Equair passengers on their flights as of October 1, 2023, with promises to help 15,000 more. Equair’s quick flight highlights the difficulty airlines confront in competitive markets, especially with fluctuating fuel prices and tough economic conditions.
