QCOSTARICA – The pandemic forced Avianca airlines to rethink its business strategy in Costa Rica and resume some flights that were canceled just two years ago.
In 2019, the Colombian flag airline decided to lay off 91 people in Costa Rica and close several direct routes from Costa Rica. The decision was made as a reorganization process to strengthen the hubs in El Salvador (SAL) and Bogotá, Colombia (BOG).
However, now there is a turnaround because, with the gradual reopening of commercial flights worldwide, Costa Rica has positioned itself in a relevant way in attracting tourists, which implies a business for airlines.
At the beginning of August, the airline announced the opening of six direct flights from Costa Rica to Cali, Medellín, Los Angeles, New York, Managua and Mexico, in addition to an operation to Miami inaugurated in July.
David Alemán, Avianca’s general director for Central and South America spoke with La Nación on August 12 about the new strategy in the country.
Here is an excerpt from the interview.
LN: Years ago Avianca closed routes and direct flights in Costa Rica, now they are betting on the country again. Why?
The trend of what the market is asking for is to compete by offering routes, end-to-end, in countries where it actually makes sense.
The world is very changeable and more so now with the covid-19 factor. Today one must look for a very important sensitivity to forecast demand, where to place capacity and where are the destinations that may or may not begin to grow.
If before it was the consolidation of the operation in a certain hub, that worked quite well for us. Today with a pandemic, it forced us all to rethink the way we operate. This model (direct routes) is one that can maintain, develop and strengthen our operations in the different countries where we operate.
It is a changing subject, the company must adapt the strategy based on the conditions.
Today one of the fastest growing segments is tourism travel and it opens up a huge space because Costa Rica is naturally the vacation destination par excellence and recognized in Latin America.
LN: Why open six new direct routes in Costa Rica?
It goes hand in hand with the plan we have been working on. We have a clear strategy of looking for a more simplified product for our clients. Point-to-point flights at the most competitive price.
Costa Rica is a very important market for us. At Avianca we had several routes, we were operating for several years (which were closed), and they are some of those that are there (new routes).
Our CEO (Anko van der Werff) was recently in Costa Rica and was able to see the entire plan focused on tourism and generating an environment of trust to continue investing and generating connectivity in the country.
In addition, our long-term business vision is aligned. The market we need to continue growing, the conditions that we have there from different ministries and the ICT (Costa Rican Tourism Institute) enhancing the country’s need. That is why we can increase the capacity in Costa Rica.
LN: What factors weighed in choosing the specific flights?
We see the opportunity to generate volume markets that provide the traffic we are looking for in order to have that connectivity and to be able to make that exchange between countries. We see the potential that exists and the potential that can be developed.
Among these new ones is the destination to Mexico, which is undoubtedly one of the main destinations in operation and for simplifying travel, that is why the direct flight makes sense.
The destinations in South America, especially towards Colombia, are quite interesting. So the idea is to start globally and look for alternative cities that do not necessarily have to be Bogotá.
There are markets that are beginning to develop in other cities. It is in line with the organization’s decision to grow in cities where we see growth potential.
LN: Will raising the operation in Costa Rica imply the hiring of new personnel?
Undoubtedly it involves an increase, not in personnel, but in resources. Resources in airplanes and airports.
The business model must prevail on the basis of efficiency. To achieve price competitiveness we must be efficient in the different chains, not only in the personnel structure.
LN: But will you hire new staff?
It is not defined, but we will certainly act based on needs.
LN: Were the conversations with the ICT and the aeronautical authorities relevant to increase flights?
What aviation needs, in addition to market conditions, is an environment of communication and articulation of the different entities and that without a doubt can be found in Costa Rica.
We met with the ICT and the support was unconditional, with the airport authorities (Juan Santamaría) and the Minister of Transport (Rodolfo Méndez).