Luis Alvarado
Director General
AeroUnion
/
View from the Top

Betting on Technology for Sustainable Growth

Wed, 03/13/2019 - 18:22

Q: What factors are powering growth in AeroUnion’s airborne cargo traffic in Mexico?
A: By continuing with the commercial strategy that AeroUnion designed in 2017, the company grew its air traffic by 25 percent in 2017 compared to the previous year and by 8 percent in 2018. This strategy is based on three pillars. First, AeroUnion has strengthened its core business lines. Second, we concluded our organizational restructuring in 2018, which enabled us to be more commercially sustainable. Third, we continued to invest in the technological transformation of our company and will finish this process in 2019. AeroUnion has reached a milestone in terms of brand positioning and service consistency. We now have a better understanding of what the market demands from cargo airlines and can act accordingly.
Q: What enticed AeroUnion to invest in new technologies?
A: Previously, AeroUnion compensated its limited access to technologies with a highly personalized operational and administrative service. However, our growth forced us to leverage technologies like ERPs or Electronic Cargo Tracking Systems (ECTS) to ensure sustainability. The business volume that AeroUnion handles and the speed required to manage it properly made the adoption of technology a must. Trying to maintain our growth momentum with manual processes but without additional technology could turn this strength into a weakness and manual processes into an obstacle to sustainable growth.
Q: What are the most important challenges that Mexican aviation faces to continue growing?
A: AICM is a key challenge. The airport’s administration needs to cope with the arrival of new airlines and the growing number of flight operations in a saturated airport. It is necessary to understand the growth projections of newly-arrived airlines and evaluate potential airport alternatives to shift cargo. Mexican aviation needs a development vision that includes the perspectives of both the government and aviation players. The simultaneous operation of AICM, AIT and the new airport that is projected to be built at Santa Lucia could also introduce new challenges for both passenger and cargo flights. This is particularly true for connecting flights that go through the Valley of Mexico, as the logistics coordination will become more difficult, especially if the final destination is outside the country.
AeroUnion expects to collaborate with Mexican aeronautics companies and with the government to find a better solution for this problem. Mexico has the potential to be the most important cargo hub in Latin America, provided the right investments are made. Colombia, Peru and Brazil have an advantage over Mexico in that sense. However, Mexico’s connectivity with Asia, Europe, North and Latin America gives the country an edge to compete against and beat all rivals in Latin America. It is necessary that both aviation authorities and airlines cooperate to reach that goal.
Q: How attractive are dynamic hubs like AIQ and AIT when cargo airlines want to expand?
A: Regional airports are always interesting for the aviation industry but they do not have as large a cargo flow as AICM. In the case of AeroUnion, it is attractive to serve these hubs but they are not an option for us to migrate our operations. Shifting cargo out of AICM is not an option to cope with its saturation. AeroUnion operates some flights to Queretaro (AIQ) and Bajio (BJC) as middle points to Los Angeles but only when there are opportunities to market cargo aviation services. We have brought cargo to these hubs but loading cargo at these airports is challenging.
Q: What is AeroUnion’s fleet refurbishing strategy for 2019?
A: As of March 2019, we are using three types of aircraft, which increases the complexity of an airline the size of AeroUnion. This factor pushes us to use resources that otherwise could make the airline much more efficient if we had a simpler fleet. AeroUnion’s goal is to reduce its Airbus A300-200 fleet by using A300-600 units in 2019. Our long-term goal is to keep only Boeing 767-200s and Airbus A300-600s and operate more efficiently.

 

AeroUnion is a Mexican cargo airline founded in 1999 with its main base in the Mexico City International Airport. In 2018, AeroUnion handled 11.4 percent of the total Mexican airborne cargo traffic, according to DGAC