Colombia-Mexico: Route to Latin American SuccessFri, 03/22/2019 - 18:20
Q: What were Avianca’s main growth milestones in 2018 in terms of revenue and passenger traffic?
A: 2018 was a year of transition and consolidation for Avianca. Globally, our aircraft load factor was 83 percent, which is well among the best in the industry at a global level. We transported 30.5 million passengers in total, which was 1 million more than in the previous year, while generating US$4.8 billion in income. These results are strengthening our position as a top Latin American airline. In 2019, Avianca will turn 100 years old with the airline in a good position.
Avianca Mexico also had an excellent 2018, carrying 949,000 passengers, 200,000 more than in 2015. We are among the airlines capitalizing on the growing popularity of Latin America among the Mexican population. The Colombia-Mexico routes are now the most important in the region with an annual growth in passenger volume of 15 percent. In the last months of 2018, we redesigned our flight operations bank in the Bogota airport, which implied a complete redesign of our arrivals and departures to make better use of the local infrastructure. This strategy allowed us to ensure that our flights could take advantage of scheduling valleys, which allowed clients to benefit from shorter waiting times and face less risk of missed connections and mishandled baggage events.
We have introduced a development plan that will improve Avianca’s profitability and operational efficiency. We want to focus on the strengths inherent to each of our hubs while we develop a financial strategy that hedges against market changes. Jet fuel prices increased significantly in 2H18, which had a double-digit impact on the finances of most airlines. For that reason, we are focusing on choosing routes not just in terms of passengers but in terms of overall profitability, which will allow us to generate a series of services that will offer added value to passengers.
Q: How has Avianca advanced in its strategy to become a technology company that flies?
A: This strategy is bearing fruit. In 2018, we revamped Avianca.com, making the webpage more interactive to allow visitors to save their search preferences and to increase our online sales by making the sale much faster and improving the user experience. We continue to promote our app that gives our customers 24/7 access to the platform. From 2019, our loyalty program will no longer offer physical cards as everything will be done through the app.
Q: What are the most important challenges hampering the growth of Mexican aviation?
A: 2018 was a positive year for the Mexican aviation industry, both in the national and international markets. Growth was possible partly thanks to the increase in seating capacity for all local airlines. Ten years ago, the average seating capacity of the industry ranged between 100 and 120 seats. Now, it is 150 seats because local players are increasingly betting on aircraft with more seats. This allows airlines to bear the slow pace of airport infrastructure growth. The federal administration should prioritize the improvement of the aviation industry in order to provide safety, good passenger experience and increased connectivity within Mexico and abroad.
Q: What challenges might Avianca Mexico face from three airports operating simultaneously in the Valley of Mexico?
A: Our operational efficiency relies on hubs that have the appropriate infrastructure to facilitate the transport of individuals within a single building, just like in Bogota, San Salvador and Lima. When we connect with our partners like United Airlines in New York or London, we focus our operations in a single building, which greatly facilitates operations for airlines and passengers. We are waiting to see the infrastructure plan before adapting our operational strategy to continue operating in Mexico as efficiently as possible.
Avianca has been the national airline and flag carrier of Colombia since 1919, making it the world’s second-oldest airline. It is headquartered in Bogota with its main hub at El Dorado International Airport