Félix Antelo
President & CEO
Viva Air Group
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Viva Aims to Change Air Travel

By Antonio Gozain | Fri, 03/11/2022 - 11:00

Q: What opportunities did Viva find in Colombia and the South American aviation market?

A: It has been 10 years since Viva started operating in Colombia and five years since we started in Peru. Viva was the first true low-cost carrier (LCC) in South America. In this region, trips per capita were well below the US, EU, Australia and Mexico, so we saw a big opportunity for growth. The emerging middle class was desperate to have better, safer and cheaper means of transportation but the only options for passengers were legacy carriers and buses. In Colombia and Peru, there are around 100 million bus passengers per year.

The limited number of legacy airlines and the high prices they charged, in addition to a booming country in terms of GDP growth and a very strong middle class, made us come to Colombia.

Q: How has Viva grown during its first 10 years of operation in South America?

A: During these 10 years, we have evolved with the customer. We started with only three aircraft and now we have 22 airplanes in operation. We will end the year with 29. Viva started as a domestic airline and now operates over 12 international routes. We continue to enjoy steady growth. In 2018, Viva announced a purchase order for 50 new A320neo and A320ceo craft directly from Airbus, which gave us the most modern fleet in Colombia and the fourth-most modern in the world.

Q: How was Viva able to stay afloat during the pandemic lockdowns?

A: Viva’s plan to become the leading LLC in South America was on a good track until the COVID-19 pandemic, which was probably the most important turning point in Viva’s history. We had to pause operations in Colombia and Peru for six months due to governments’ restrictions on air traffic. Both countries imposed some of the longest lockdowns in the world without providing any government aid or assistance to airlines, unlike what happened in the US, EU and Asia.

Despite the crisis, Viva was the only Colombian airline that did not enter into Chapter 11 bankruptcy. In September 2020, we restarted operations as an entirely different company. Recovery came earlier than everyone expected and our low-cost model helped us through this crisis. Most of our offer was on domestic routes, which we knew were going to be the first to recover.

In addition, the customers we targeted were mainly tourism-driven passengers. Again, we expected tourism flights to recover before business travel. Thanks to our well-designed model, we kept offering the lowest prices, which are 30-40 percent below our competitors’ prices.

Q: How has Viva grown since restarting operations?

A: Viva entered the pandemic with about 14 percent of Colombia’s domestic market share. We have almost doubled our market share, becoming the second-most important player in this segment. In addition, we quadrupled our international routes. Viva already flies to several destinations, including Mexico City, Cancun, Lima, Orlando and Miami. In March, we will start flying to Punta Cana and to Sao Paulo in June.

Viva is now operating more than double the seats it had when the pandemic hit. The company has basically doubled in size and has become the fastest-growing airline in Colombia, which is a matter of pride for us.

Q: What strategies has Viva implemented to maintain customer loyalty regarding its domestic routes?

A: Viva rebranded its image and launched a new website and mobile application, which are among the best in the market. We kept our focus on on-time performance (OTP). In 2021, we marked four straight years as the most punctual airline both in Colombia and Peru. OTP plays a key role especially in a country such as Colombia, where flights are 50 minutes long, on average. Besides safety and low prices, punctuality is our main value. In addition, we have attracted the best talent to work with us, both in the air and in our corporate offices.

Q: How is Viva Air Group addressing sustainability goals?

A: Being sustainable and taking care of the planet starts with the fleet. If an airline flies 15- or 20-year-old aircraft, it is impossible to operate sustainably. Viva’s fleet, the most modern in Colombia, consumes 20 percent less fuel on average and has reduced carbon emissions per passenger by 50 percent.

Q: How is Viva expanding its domestic routes?

A: Viva plans to fly close to 50 domestic routes in Colombia and is targeting small to medium cities. Thanks to the improvements in our business model, we have become one of the airlines with the lowest costs in the world. This allows us to explore new routes, try new business lines and remain profitable.

Q: How has the interline agreement with Viva Aerobús boosted Viva’s sales on the Mexico City-Bogota route?

A: The Mexico-Colombia market is the second-largest for both countries. Last year, we started flying to Mexico City and Cancun from Bogota and Medellin with overwhelmingly positive results. We also noticed that Viva Aerobús had started flying from Mexico City to Bogota. Viva Air Group saw an opportunity to cooperate with them in an interline agreement, which was quite revolutionary. This alliance became the first between two LCCs.

So far, results of the interline agreement have been positive because both airlines share the same philosophy. It works as a cross-sell: Viva Aerobús sells our flights and we sell theirs, boosting sales and the presence of the other airline in each country. Hopefully, we can deepen our alliance in the future.

Q: How do LCCs such as Viva promote air traffic through lower fares?

A: When Viva enters a new market with its low fares, it forces competitors to bring their prices down. This happened with the Mexico City-Bogota route. When we started with this route eight months ago, it was a less congested market. Now, Viva Aerobús, Volaris, Aeroméxico, Avianca and Wingo compete on this route. We compete with cost-efficiency, better itineraries and lower fares. Market share is a consequence of the right execution of our strategies.

When airlines lower fares, they promote traffic. With roundtrip tickets around US$200, more people started traveling between Bogota and Mexico City. This includes all kinds of passengers, from tourism to business travelers. There are large communities of Colombians living in Mexico and Mexicans living in Colombia, and they travel to visit friends and relatives. Finally, business traffic has changed; it is no longer exclusively first-class. Freelancers and people working in medium-sized companies look for low fares, punctuality and good service.

 

Viva, a low-cost airline based in Colombia and Peru, operates over 45 domestic routes and more than 12 international routes, including Mexico and the US. Viva is a subsidiary of Irelandia Aviation and operates one of the world’s most modern aircraft fleets.

Antonio Gozain Antonio Gozain Journalist and Industry Analyst