Catch up on some of the most thought-provoking discussions and keynotes from the inaugural CAPA Latin America Aviation Summit in Cartagena. Below is a snap shot of key quotes from some of our honoured guests in attendance to discuss what is affecting aviation in this part of the world.
ProColombia president Felipe Jaramillo, stated:
- The taxation system has enabled international recognised hotels to establish inventories in the country. A recent amendment of this has further incentivised further investment in expanding regional markets. “We think this will have an even bigger impact in Colombia’s smaller cities than it did in Bogota,” he added.
- The tourism landscape in Colombia is entering a new frontier as the country boosts its tourism appeal. “International visitors can now explore every corner of this country. We have become many countries within one,” he said. New direct air service connectivity into the regions from the likes of Cartagena, Medellin, among others, are enabling passengers to fly more easily directly to new destinations rather than connecting via the capital, Bogota.
- The signing of the peace accord in Colombia is already delivering significant benefits to trade in the country. “The tourism industry is booming,” he said with visitors increasing 14% year-on-year in 2016. “In the first semester of this year international visitors have grown by more than 20% versus last year,” he added. International connectivity has boomed 54% since 2012 with 29 different countries now directly connected to Colombia.
VivaColombia founder and CEO William Shaw,
- There is “a lot of potential” for the airline’s sister operation in Peru. The Viva Air Peru business was launched in May-2017 and currently serves six domestic points from its hub at Lima Jorge Chávez International Airport. “Peru is a growing market for air travel as anywhere you can get to within one hour by plane can take hours, even a day by bus”, he said.
- The airline is continuously looking for “golden nuggets where traffic doesn’t currently exist” and where it can debut its own low cost services. He said that following travel trends for backpackers in Colombia helped deliver the San Andres Island–Cartagena market, a route that has never previously been served, but now has up to 18 weekly rotations flown by three different airlines. “Our research opened our eyes to the incredible potential of this new city pair”, added Mr Shaw.
- The rise in air connectivity in Colombia has meant that infrastructure is having to be expanded to support the increased demand. “Every airport we fly to is under construction and is growing”, he explained. To understand the scale of growth VivaColombia has grown its own activities in Colombia almost seven fold since its first year of operation in 2012 and traffic at its largest point, Medellin Jose Maria Cordova Airport, has grown from 3.7 million passengers in 2011 to over 7.6 million in 2016.
- LCCs bring economic growth to markets, but Colombia needs to understand the growth potential and not blunt its rise. “Colombia is in fashion. Is it Shakira, the football team, I don’t know, but Colombia is undoubtedly in fashion. People love Colombia”, he said. However, he urged Colombia to invest in letting the market to grow. “When the boom of Low Cost Carriers hit Europe it was to secondary airports and they lowered taxes. It gave people the ability to travel. In Colombia we are seeing the opposite and are increasing taxes to boost profits”, he explained.
CAPA – Centre for Aviation executive chairman Peter Harbison, stated
- Infrastructure challenges could increasingly become a brick wall for growth in Latin America. Infrastructure constraints could cost the region USD42 billion over the next 16 years, said Mr Harbison.
- With 0.3 domestic airline seats per population in Argentina in 2016, airline penetration in the country is only one third of that in Mexico.
- The presence of low cost airlines in Latin America is still relatively low compared with 67% domestic low cost penetration rates in India and the Philippines. Mr Harbison concluded the low cost model is the way of the future, noting, “that is where traffic stimulation is”.
Avianca CEO Hernan Rincon, stated:
- He believes LCCs do “magnificent” work to educate the public to travel by air rather than by bus or automobile. Those airlines, “put pressure on us to be more effective”, he concluded.
- The company is doing its best to conclude negotiations with fellow Star Alliance partner United Airlines on a new commercial agreement by YE2017. “We’ve made great progress on a lot of thorny issues”, said Mr Rincon.
- There is niche for longer range narrowbody aircraft. He cited Bogota to Washington Dulles and Bogota to Boston as markets that do not have enough traffic for widebody aircraft but produce good traffic flows. Mr Rincon stated Avianca’s service from Bogota to Boston has been a resounding success.
- Even as Avianca has a new app, many customers are not interesting in using the airline’s mobile application. Most millennials spend most of their time on Facebook, said Mr Rincon, so the airline opted to build a system in Facebook’s instant messenger to communicate about flights.
- The airline is examining routes in Latin America to minimise backtracking, using the example of passengers in northern Argentina traveling through Buenos Aires for a trip to Miami. Mr Rincon concluded it is much easier to go through Lima or Bogota.
- In the future there will be only two pan Latin American airlines to connect the region with the rest of the world “and we’re positioning ourselves to be one of them”.
Azul Linhas Aéreas Brasileiras alliances and distribution director Marcelo Bento Ribeiro, stated:
- The Brazilian airline is now leading with technology projects for mobile devices ahead of desktops. The smart phone is the personal computer of most consumers in Latin America, he said, adding: “We have to deliver the right tools and have found the LATAM traveller is a quick adopter of new things”.