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Latin American airlines eye new revenue opportunities at CAPA event

Elena Avila

Executive Vice President, Head of Americas, Airlines, Amadeus

The objective of the event was as bold as the host city of Cartagena, Colombia: finding the next 20% yield improvement for the aviation industry in Latin America. The Latin America Aviation & LCCs Summit hosted by CAPA - Centre for Aviation, brought together aviation players from around the region and beyond to discuss the industry’s regional outlook and issues affecting Low Cost Carriers (LCCs).

The objective of the event was as bold as the host city of Cartagena, Colombia: finding the next 20% yield improvement for the aviation industry in Latin America. The Latin America Aviation & LCCs Summit hosted by CAPA - Centre for Aviation , brought together aviation players from around the region and beyond to discuss the industry’s regional outlook and issues affecting Low Cost Carriers (LCCs).

I was happy to represent Amadeus at the event along with my colleague, Vicky Huertas, Commercial VP of Airlines for Latin America and the Caribbean, Amadeus. ‘How are Latin American airlines unlocking revenue opportunities?’ was the panel Vicky sat on, while I was on a panel that discussed the present and future of NDC, challenges and opportunities.

On the first panel, Vicky made some excellent points concerning Latin American airlines and what they can do to continue increasing revenue while improving the passenger experience. We believe the trend is towards customized offers. This means intelligent pricing, positioning and promotion of products, and services to meet the individual traveler’s needs. New data science enables airlines to embrace the differences between who the customers are and why they travel, and to move beyond the old segmentation (business vs. pleasure) or even basic demographic segmentation. Airlines can blend past purchases, present activity, and other elements inherent to each individual to predict the differences between customers and their varied needs.

Considering that revenue from ancillary sources constitutes 10% of passenger revenue globally and up to 45% of revenue for LCCs , revenue management systems must evolve to incorporate all the products that the airline sells and help them bundle those products together. In addition, new technology allows airlines to change prices for offers in response to real-time information. All these elements combined are now available to airlines in order to create customized offers, and we believe they are beneficial for customers and airlines at the same time.

CAPA event - Cartagena

 

On the second panel, it was a pleasure to discuss an important topic for Amadeus: IATA’s New Distribution Capability (NDC ). We believe in NDC’s ability to deliver value for our airline customers by helping them create more memorable journeys. NDC will help airlines become retailers, thereby putting travelers at the center of everything. It will help them personalize their offers, build loyalty, and increase revenues. All of this will be accomplished while enabling them to sell more exciting content and deliver full flight experiences. A great example of this is the work we’ve been doing in Latin America with Avianca , which was the first airline in the region to implement Amadeus Altéa NDC .

At Amadeus we think of NDC as a first step on a journey to much greater digitalization of the industry which is “business model agnostic”. On the panel, we agreed that the technology discussion and the commercial discussion are two independent topics. It’s clear that for NDC to work, collaboration is key and the right economics to sustain investment have to exist.

Overall, what stood out to me the most at the event was the passion and optimism of aviation players in Latin America. Even in the midst of some challenging circumstances, airlines remain positive and ready to invest in the region. We look forward to further supporting them with the latest technology that enables them to create more connected journeys.


Tags

Latin America, Events