Connectivity for the Business TravelerFri, 12/01/2017 - 18:10
Q: What are the main challenges for TAR Aerolíneas’ growth and how is the company addressing them?
A: In 2017, TAR Aerolíneas entered its fourth year of operations. We are at the stage where we need to plan all movements well in advance. Our goal is to double our fleet, which now comprises 10 aircraft, within the next five years. One of the challenges is finding pilots to fly these new aircraft. Our pace of growth is limited by a lack of pilots. Pilots from many existing schools in the country receive a rudimentary education and lack practice in the type of cabins we use, called glass cockpits. Before flying in one, a pilot must have at least 1,500 practice flight hours but graduates from pilot schools often have much less. This makes it necessary for us to train them after we hire them.
To solve this, we are developing a training center for pilots and flight attendants in conjunction with UNAQ, called TAR Aerolíneas Training Center (CATA). In the first half of 2017 we acquired DGAC’s certification to become a training center and we are now looking for more partners to train staff who could be integrated into TAR’s crew or other airlines. The common denominator for all partners will be the use of the Embraer ERJ 145. This training center will be ready by 2018. In partnership with UNAQ and the state government, we are also planning to bring flight simulators to Queretaro for training purposes.
Q: How has TAR Aerolíneas’ strategy changed to reflect market needs and ensure continued growth?
A: In 2016, a comprehensive analysis of our flight structure showed we could improve by aligning our routes to market needs. We now know with certainty the number of flights required for specific routes, allowing us to increase scheduling efficiency. For instance, we are now flying four times a day from Queretaro to Monterrey, three times to Guadalajara and three to Toluca, among many other routes. This facilitates same-day return trips.
In 2017, we acquired international permits and specifically received FAA approval to fly to the US in April, creating an opening for us to adapt to demand in Mexico. Just a month later, we flew our first international charter between San Diego and Queretaro.
We are also looking for new market opportunities. We work alongside the Government of Queretaro to promote the state and became an official sponsor of Queretaro’s Congress Center. This is an initiative from the state’s government to attract business events and we are aiding that effort.
Q: How has regional connectivity grown in Mexico and how will TAR Aerolíneas stand out amid increasing competition?
A: There is significant interest in Mexico for greater regional connectivity — from us, other airlines and governments — that will lead to the development of even more routes. We do not compete with national or international airlines, we complement their services. For instance, Queretaro allocates slots to Aeroméxico, Volaris, Viva Aerobus, United Airlines and American Airlines, from many national and international destinations.
We complement these airlines by transporting their passengers to locations within the Bajio region not covered by any other airline, which improves national connectivity. Eighty percent of the passengers on these routes are business travelers.
What differentiates TAR Aerolíneas is our aircraft. Our business model is different to airlines based in a specific location — Mexico City in most cases. The 50-seater ERJ 145 Embraer jets are best for hour-long trips so we use them to create circuits across the country. These circuits visit several cities before returning to the final airport, instead of the standard return flight airlines tend to offer. They are developed in close collaboration with Mexican airport groups and state governments that convey the region’s specific connectivity requirements. For instance, we have a base in Merida to address the needs of the Yucatan Peninsula. Even though our main offices are in Queretaro, only 25 percent of our airplane seats come to the state.
Q: What are the main conditions to consider when implementing this circuit model?
A: Flexibility is important. Mexico is an extremely large country with wide variations in geography and demography from north to south, which is reflected in demand for seats. While we have to use the same core aircraft to meet all requirements, we must tailor services to the state’s demographic characteristics. We work under a high-utilization scheme because each of our aircraft is a business in itself.
Q: How influential was TAR Aerolíneas to the growth of Queretaro’s Intercontinental Airport (AIQ)?
A: TAR accounts for approximately 28 percent of all passenger traffic at AIQ. We have been working closely with the airport to bring more opportunities to the region. We are also in close talks with the government to promote the state and in April 2017 we created a circuit from Queretaro to Chihuahua followed by Ciudad Juarez, which meets the requirements of Tier 1 automotive companies. Through these strategies, TAR has helped to create new business opportunities in the region.
Automotive companies coming to Queretaro will analyze connectivity when deciding whether to bring their business to the state so we want to offer them useful routes. Four years ago, when TAR Aerolíneas was created, we operated a single daily flight from Queretaro to Monterrey. Now there are 10 different routes every day.
The real challenge is to promote AIQ’s unique advantages. This airport has a different mission to any other in Mexico. Thanks to its central location not far from Mexico City, it is possible to make AIQ a true connectivity hub for the country. Mexico City is an international entry point into the country and a connection gateway but it is now saturated. Queretaro can become an efficient connectivity hub by allowing passengers to change flights in just 20 minutes thanks to its efficient terminal. We are also working with US customs to allow Mexican travelers to “cross the border” in Queretaro, filling in the necessary paperwork in the state instead of when they arrive to the US. This would make the customs process easier and faster for them.
Q: What specific products has TAR Aerolíneas created for business travelers?
A: Business travelers are mostly concerned with flight schedules and punctuality. We have developed internal processes that guarantee these two aspects. In 2016, TAR Aerolíneas had the best on-time performance of all Mexican airlines. Moreover, we offer a full flight service, which means we do not charge for extras, and we do not oversell our flights.
We also created Star Club, an added-value service program for our business travelers that offers perks such as in-flight alcoholic beverages. Our goal is to continue improving standards for business travelers.
Q: What are the next steps in TAR Aerolíneas growth strategy?
A: For the past three years, our focus was on route expansion. 2017 has been a challenging year so we are pausing to decide how to incorporate some of our new ideas.
We are focusing on compliance with national standards and looking for more business partners. We are working on increasing the standards of our operational performance to meet IATA safety requirements, especially now that we can fly international routes, which may lead to code-sharing agreements. Our plan for 2017 is to increase our routes and create synergies with other airlines. In 2018, we will work with Mundo Maya in Cancun. We are looking for partners that can use seats on our flights as part of their strategy, such as hotels and business providers. Many companies in Yucatan are serving European travelers so we can complement their travel services by increasing connectivity. At TAR Aerolíneas we are mostly concerned with keeping our passengers satisfied and if we continue to do so, we will keep growing.
TAR Aerolíneas is a Mexican airline created four years ago in Queretaro. The company focuses on regional connectivity through its fleet of 10 Embraer ERJ 145 jets and offers circuit flight routes around the country