Octavio Hernández
Director General
Discover the World
/
View from the Top

Discovering, Unlocking Overlooked Markets

Thu, 12/01/2016 - 12:31

Q: How does Discover the World help airlines overcome the most common challenges on entering a new market?

A: Airlines face challenges ranging from regulations to public perception. The highest hurdle is finding representatives in the country capable of handling these processes on their behalf. Airlines can struggle to adapt their product to the local market so Discover the World has been in charge of generating new markets for foreign airlines in various countries since 1981. To enter a new market, airlines have to invest in market research and marketing. We simplify this process by offering them a comprehensive solution before they even touchdown in the country. This business model is convenient for airlines as they only pay us per ticket sold. Discover the World supports airlines through regulation and approvals processes, helping them penetrate new markets. 

Once the market is strong enough, airlines begin flying into the country and often prefer to continue working with us. Some success stories include America West Airlines and Air Berlin. This latter airline had a sound reputation in Europe and came to Mexico as a charter airline for European passengers. After Air Berlin acquired Etihad Airways its business model for Mexico changed to that of a regular airline but most of its return flights did not have enough occupancy to remain competitive. In this case, we strengthened their Mexican market reach by creating an interest to visit these countries among the local population.

Q: What changes have you perceived in the global and Mexican aviation market?

A: Mexican travelers represent a small percentage of the population but they are a proportion of a large number. IATA travel agencies sold US$2.1 billion dollars in Mexico. That shows higher dollar prices are not significantly impacting the aviation industry, which is prepared for these fluctuations. We expect BASA between Mexico and the US to generate many opportunities for all airlines operating in Mexico.

Modern technology, is making the world smaller, simplifying processes related to flying. Decades ago, travelers would spend a longer time evaluating before acquiring a ticket. Now they have all the necessary information available at a click. The Internet has increased passenger access to aviation service providers and gives users information to make informed decisions with alternative payment methods, which changed the operating model for airlines.

Q: What are the main advantages that Discover the World can offer airlines?

A: We have a strong administrative and legal team able to capitalize on opportunities in areas previously not considered. Airlines interested in entering the country can contact us for support but we also approach airlines to illustrate the potential market they would have in the country. We have a team that searches for clients at many international events. We represent airlines worldwide, including Air New Zealand, Etihad Airways, GOOL, Icelandair and Singapore Airlines. The market will continue growing organically but we help it grow even faster. Arab airlines represent a market niche that is growing significantly and has potential to grow in Mexico but remains unknown in the country. We capitalize on overlooked areas to support the growth of an airline.

Q: How would you describe your growth in Mexico for 2016, in spite of low periods?

A: In terms of revenue by the middle of 2016, our Mexican offices were 11.5 percent from reaching the total growth the company obtained in 2015 and we will have incorporated four more airlines by Jan. 1, 2017. Mexico has many opportunities for growth in aerial travel because the country is positioned as the strongest emerging market in Latin America, evidenced by our company’s growth. Low periods do not impact us heavily because we adapt to the fact that what some entities consider a low season is high season for another. For instance, December is perceived as a good month but the preceding and following months less so. While an airline may face a stronger season during one period, another airline in a different location may find the opposite phenomena at the same time. It is feasible for us to shift our focus between airlines depending on the time of the year. We also promote corporate travel during low seasons to counteract low tourist travel trends