Investing in Latin America aviation, the expansion of LCCs and the impact of the digital revolution


Investing in Latin America aviation, the expansion of LCCs and the impact of the digital revolution are just a selection of the key issues to be discussed at CAPA's Latin America Aviation Summit, to be held in Cartagena on 11/12-Sep-2017.

With at least a dozen CEOs already confirmed, the event promises to be a major gathering point for Latin American aviation leaders in 2017. It is a timely moment to be addressing the market, as most economies begin to emerge from the recent downturn and as new entrants, especially LCCs, start to change the shape of airline operations.

Other topics to be discussed will include the early effects of airline liberalisation in Argentina, the challenging issues of infrastructure, investing in the market and the status of connectivity. There are growing positive signs emerging from the region, with hopes that the dark days of economic downturn are slipping back into the past.

  • Latin America aviation is experiencing growth and improved connectivity, driven by the arrival of new generation widebody aircraft.
  • The region is seeing a rise in low-cost carriers (LCCs), although penetration is still limited compared to other regions.
  • The role of connectivity, including codeshares, joint ventures, and hub operations, is crucial for airlines in Latin America.
  • The digital revolution is transforming airline marketing and the customer proposition in the region.
  • Airport infrastructure is a major challenge in Latin America, with the need for additional capacity to support growth.
  • Consolidation and alliances are shaping the aviation landscape in Latin America, with winners and losers emerging.

For further information on attending or sponsoring CAPA's Latin America Aviation Summit, to be held in Cartagena on 11/12-Sep-2017 please contact: info@centreforaviation.com

Latin American aviation is stirring as economic activity improves and new entry and aircraft types underpin innovative moves

Latin America is enjoying its best ever connectivity, buoyed by the arrival of new generation widebodies airliners like the Airbus A350 and Boeing 787 that are allowing longer distance routes to be served more efficiently.

After a decline in the late 2000s, connectivity between Latin America and the rest of the world has been on the rise every year this decade and the current northern hemisphere summer schedules show a fourth consecutive year-on-year growth of around 7%.

The big post GFC recovery into growth in summer 2010 (+8.6% on the previous summer) was followed by modest rises over the following three years (2.0% in summer 2011; 4.2% in summer 2012 and 1.4% in summer 2013).

Since 2010 the rate of growth has taken a step increase

Growth has improved to 7.2% in summer 2014, 6.8% in summer 2015, 7.8% last summer and 7.2% in the current 2017 schedule period.

This rise has coincided with the arrival of the latest generation airliners into the fleets of long-haul airlines across Latin America and enabled them to open new markets. The 787 Dreamliner now accounts for 5.8% of all out of region capacity from Latin America this summer, up from 4.3% last year with 20 airlines now using the type on flights from the region. The A350 is now also used by LATAM Airlines out of Brazil and into the Caribbean by Air Caraibes from France.

The growth in Dreamliner operations has been significant. The type first made its long haul debut in the region during the winter 2012 season and in summer 2013 was used by Aeromexico on Mexico City - New York and Mexico City - Tokyo Narita via Tijuana flights, as well as LATAM Airlines between Lima and Los Angeles, Santiago and Madrid and Santiago and New York. It was also deployed by Ethiopian Airlines into Sao Paulo from Addis Ababa via Lome and by UK leisure carrier Thomson Airways into Cancun from various UK departure points.

In summer-2017 the 787 is scheduled to operate from 32 different Latin American airports, flying on over 90 different routes, with the largest operations from 'local' airline hubs in Santiago, Chile; Mexico City, Mexico; Bogota, Colombia and Sao Paulo, Brazil. The range and performance of the aircraft is permitting airlines to offer additional point-to-point services as well as add further long-haul spokes into their hub operations.

The new 787s and A350s are clearly opening the door to increased long-haul connectivity into Latin America

But they are mainly being used to replace older generation equipment and the role of hub airports in the region currently remains as strong as ever.

This does, however, raise the major issue of airport infrastructure and the need for additional capacity at some of these key gateways.

By not addressing the urgent infrastructure needs of the region, IATA says Latin America will leave USD42 billion of unrealised economic benefits on the table by 2034, a period during which passenger growth in Latin America is expected to double and the air transport industry's contribution to regional GDP could jump from USD140 billion to USD322 billion.

Long haul airlines, many from Europe and the USA, have been long time operators to Latin America and continue to evolve their business models, evolving the roles of alliances and codeshare partners to maximise the opportunity from connectivity in the region. Copa Airlines led the way with building an intra-regional connectivity business built on its Panama City hub, but consolidation across Central and South America mean the likes of Avianca and LATAM have strengthened their own roles.

Now the concept is emerging of LCCs building connectivity, both for domestic, intra-region and with long haul options as Norwegian launches long haul flights to Buenos Aires to link into its planned new Argentine business and the IAG-controlled Level offering Barcelona-Buenos Aires with feed from its Spanish low-fare operation Vueling.

(This is a short extract from Airline Leader, Issue #42, which features Latin America and will be available for delegates at the Cartagena Summit)

Agenda: CAPA Latin America Aviation Summit, Cartagena 11/12-Sep-2018

Agenda: Latin America Aviation Summit, Cartagena 11/12-Sep-2018


18.00 Welcome Reception at Hilton Cartagena
Hosted by: SACSA, ProColombia, Gema Tours


08.00 Registration
08.30 Coffee Tasting, Colombian Style
A pre-conference lesson about Colombia's world renowned coffee industry by a local grower. Samples will be given
09.00 Chairman's Welcome
09:05 Welcome to Cartagena
Sociedad Aeroportuaria de la Costa (SACSA),
Legal Representative, Ramon Pereira
09.15 Keynote Address: Colombia Minister of Commerce, Industry & Tourism
09.30 The Status of the Latin American Airline Market & its prognosis for future health.
CAPA - Centre for Aviation, Executive Chairman, Peter Harbison
09:45 Keynote address & Q&A: Iberia, CEO, Luis Gallego
10.15 Coffee Break
10:45 Keynote Q&A
Stimulating untapped demand in the Latin American marketplace

Latin America's low cost airline expansion has lagged other regions. Central America, driven by Mexico has a high (domestic) LCC component, but South America, even with a 50% LCC share in the large Brazilian domestic market, lacks any significant penetration.
Overall, international LCC activity is very limited. This is changing as some of the branded LCCs expand into new territory, but it is only with greater liberalisation that opportunities for the branded LCCs will be able to make a substantial difference.

  • What are the reasons for limited LCC penetration in Latin America?
  • Is there a significant low cost electorate - e.g. proportionately to other regions (i.e. 30%+)?
  • Which countries offer the main opportunities for LCC expansion?
  • How do investors feel about investing in this sector?

Moderator: CAPA - Centre for Aviation, Chairman, Peter Harbison

Panel Members:

11.30 The role of connectivity in both long haul, and intra-LATAM business: The future of Latin American hubs and alliances

Copa led the way with building an intra-regional connectivity business built on its Panama City hub, long haul airlines, many from Europe and the USA have been long time operators to Latin America and continue to evolve their business model, including the role of alliance and codeshare partners to maximise the opportunity from connectivity. Now we have the concept of LCCs building connectivity, both for domestic, intra-region and with long haul.

We explore the current trends and future opportunities as airlines seek the opportunities to de-risk investments, and to cope with often turbulent impacts of geopolitical, local and global economic trends.

What role do codeshares, joint ventures and hub & spoke connections play now and in the future. What does crystal ball gazing suggest the future holds?

  • What has been the success of intra-connectivity to date?
  • What trends and developments have recently, or are now taking place?
  • Who are the winners and losers so far?
  • What regulatory barriers are still getting in the way?
  • Are new aircraft opening new opportunities?

Moderator: Seabury Group, VP, Robert C Hill

Panel Members:

12.15 Keynote: What does the Digital Revolution mean for Airlines?
Executive Vice President, Head of Americas, Airline Business, Elena Avila
12.30 Airline Keynote
Avianca, Executive Chairman, Hernán Rincón discusses the strategy, focus and future of Avianca.

Following a keynote, CAPA's Executive Chairman Peter Harbison will probe with Hernán what that strategy entails, how it differentiates and why we should believe it will be successful. We ask what led to the strategy and if it was based on aviation elsewhere in the world, or founded in beliefs from another industry.

13.00 Lunch Break
14.00 Low Cost Airlines and Latin America - Pure LCC, ULCC, hybrids, low cost long haul?

The market for LCCs in Latin America was slow to take off, save for Mexico and Brazil, now it seems to be booming!

  • What is the secret sauce for success?
  • How are new era narrowbodies transforming the proposition, both for customers and airlines?
  • What infrastructure challenges face LCCs and how are these being overcome?
  • Are we seeing potential for hybrids, codeshare, cross investment and interconnectivity emerging between network and low cost airlines?

Moderator: KPMG, Socio/Partner, Head Latam Aviation, Eliseo Llamazares
Panel Members:

  • Colima Mexico, Minister of Tourism, César Castañeda Vázquez del Mercado
  • Interjet, CCO, Julio Gamero
  • ProColombia, VP Tourism, Julian Guerrero Orozco
  • Southwest Airlines, Managing Director Business Development, David Harvey
  • VivaColombia, Founder & CEO, William Shaw
14.45 The Future Latin American Traveller: How Mobile, OTAs and Metasearch is transforming airline marketing, and the changing "customer proposition" in Latin America
  • The widespread availability and use of mobile technology, the rise of metasearch, and the growth of OTAs all have concurrent implications on how airlines market to travellers, and how the customer views the end proposition they receive (in planning, and their experience during trip)
  • We examine the implication of mobile on booking behaviour and distribution strategy
  • We explore how airlines are modifying the booking experience and ask what further changes can travellers expect to see in terms of trip experience
  • What is unique, and how are the airlines, intermediaries, tech companies and airports evolving their products in response?
  • Travellers want "beyond air" to be part of their one stop booking process, what value do intermediaries add to this, and what is being rolled out to improve the value proposition of the intermediary in its relationship with the traveller

Moderator: MW Travel Consultancy, Principal, Martin Warner
Panel Members:

15.30 Coffee Break
16.00 Handling the Growth: Airport and ANSP Infrastructure outlook in Latin America
  • What is needed to boost infrastructure and renewal investment across airports in Latin America?
  • What is being done today, how does that compare to need, and is the dialogue with airlines adequate?
  • What do customers need, the traveller but also the destinations and operators?
  • We hear from experts around the investments necessary, those being made and those that are still needed. We will also hear from current and recent projects such as Mexico City new International Airport.

Moderator: InterVISTAS Consulting, CCO, Kenneth Currie
Panel Members:

  • ACL-LAC, Director General, Javier Martinez Botacio
  • AENA, DG of Non Regulated Business, José Manuel Fernández Bosch
  • Colima Mexico, Tourism Minister, Cesar Castañeda Vázquez del Mercado
  • Miami International Airport, Director & CEO, Emilio González
  • tbc
16.45 Strategy for promoting international tourism to Colombia and the role of alliances with airlines
Colombia developed a new strategy for promoting international tourism and undertook a great experiment when it lowered taxes at Cartagena's airport. As a test case for evolving the tourism model in Latin America, is this now an example for other markets around the region? We probe:
  • What inspired the strategy?
  • What was done? / Why was it done?
  • Can it be successfully copied elsewhere?
  • What is the reaction of the airlines serving Cartagena?
  • Has the initiative led to growth and success?
  • What is the role of alliances with airlines in the development of international tourism?

Moderator: ProColombia, CEO, Felipe Jaramillo
Panel Members:

17.15 End of Day
17.15 Happy Hour with Travelport
18.45 Buses depart for Dinner at Casa 1537


08.00 Registration and Breakfast
08.30 Coffee Tasting, Colombian Style
A pre-conference lesson about Colombia's world renowned coffee industry by a local grower. Samples will be given
09.00 Chairman's Welcome
09.05 Keynote tbc
09.20 Brazil On The Rise (again)?
  • What is the progress in Brazil's aviation sector, including tourism and corporate segments?
  • Where is the market going?
  • What are the objectives of the players and what are the changes are needed to get there for sustainable success?
  • What have airlines learned from political and economic turmoil?
  • Can profitable growth be attained and sustained?
  • To what extent is infrastructure limiting the growth of the market
  • What should change at Brazil's congested airports?
  • Is privatisation the only course of action?

Moderator: ALTA, Chief Counsel, Gonzalo Yelpo
Panel Members:

09.50 Low Cost Carriers - a Focus on Hybridisation

The success of LCCs & ULCCs is driving network airlines to re-think their business model, especially for domestic and regional markets. Iberia Express is probably the best hybrid example in Europe, and now airlines in Latin America are attempting the transition, including LATAM and SKY. In this session we explore the challenge (and the opportunity), and discuss the progress being made by airlines in the region to compete with the LCC/ULCC airlines.

Moderator: TBC
Panel Members:

10.15 The Future of the Caribbean Market

The diversity of the Caribbean has continued with Cuba's greater openness to the north and more flights from the south. The growth in short and mid range LCC services, and new long haul markets to destinations throughout the extensive Caribbean region. This is creating demand for new (and different) hotels, new guest expectations and destination experiences.

  • Which markets will see the most growth, and why?
  • How is tourism and aviation linked at the highest levels?
  • What about airport infrastructure - is there a secure, stable, efficient and environmentally compatible airport system in all markets necessary to support growth?
  • What plans are there to improve where necessary?
  • Are airline incentives critical to growth?
  • Future of fifth freedom rights expansion?

Moderator: IATA, Regional Vice President, The Americas, Peter Cerdá
Panel Members:

  • ACI-LAC, Director General, Javier Martinez Botacio
  • Heico, Business Development Director, Alex de Gunten
  • InselAir, former CEO, Albert Kluyver
  • InterCaribbean, CEO, Trevor Sadler
10.45 Coffee Break
11.15 Sales, Distribution and Payments: What are the priorities, objectives and challenges in Latin America?
  • What challenges are unique, how and why for airlines in Latin America when it comes to distribution (e.g. role of OTA, Intermediaries, tour operators versus direct business)?
  • Are airlines in Latin America clear on their GDS strategies after GOL and TAM for example have had content in, out and in the GDS?
  • Where is the relationship with the GDS and NDC, new distribution tech partners?
  • Is "Direct Connect" to bypass the traditional GDS a priority?
  • How will distribution strategy evolve in the next 1-3 years
  • What are the real objectives and priorities for airlines?
  • Have the players in the eco-system been effectively engaged in the debate relating to changing distribution strategies?
  • What IATA initiatives are being considered in LATAM - NDC, IATA NextGen payments, OneOrder?

Moderator: MW Travel Consultancy, Partner, Vicky Fernandez de Larrea
Panel Members:

12.00 Consolidation and Alliances in Latin America:
  • Which hubs and alliances will be the winners and losers?
  • What are the winning models?
  • What is being successful elsewhere in the airline world?
  • Can aviation apply successful learnings from other industries?
  • Who and what are the challengers and to what extent are, each or all of LCC, long haul LCC, network carriers, interconnectivity or hybrids a winning proposition in Latin America?
12.30 Keynote


Lunch and Conference Close

Distinguished speakers already confirmed include:

ACI-LAC, DG, Javier Martinez Botacio

Airbus, President for Latin America and Caribbean, Rafael Alonso NEW

ALTA Legal Director,l Gonzalo Yelpo NEW

Amadeus, Account Director Brazil, Gustavo Murad

Amadeus, Executive Vice President, Head of Americas, Airline Business, Elena Avila

Amadeus, Head Online Travel, Sergio Vargas

AVIANCA, CEO, Hernan Rincon

Azul, Director of Alliances, Marcelo Bento Ribeiro

Boeing Commercial Airplanes, Managing Director, Regional Marketing for Latin America, Africa and Caribbean, Kemp Harker

Secretario de Turismo de Colima, Minister of Tourism, César Castañeda Vázquez del Mercado

Copa Airlines Colombia, CEO, Eduardo Lombana

Expedia, Managing Director Latin America, Carolina Piber

Expedia, Director Air Accounts, Bryan Bachrad

Hainan Airlines, VP, Hou Wei

Heico, Business Development Director, Alex de Gunten

IATA, Regional VP The Americas, Peter Cerdá

Iberia, CEO, Luis Gallego

Indigo Partners, Co-Founder and Managing Partner, William Franke

InselAir, former CEO, Albert Kluyver

interCaribbean CEO Trevor Sadler

Interjet, CCO, Julio Gamero

InterVISTAS Consulting, CCO, Kenneth Currie

KPMG, Eliseo Llamazares, Partner

LATAM Airlines Group, SVP Customers, Claudia Sender

LATAM Airlines Colombia CEO Fernando Garcia Poitevin

Mark Schwab, former CEO Star Alliance

Miami Airport, Aviation Director & CEO, Emilio Gonzalez

MW Travel Consultancy, Partner, Vicky Fernandez

MW Travel Consultancy, Principal, Martin Warner

ProColombia, VP Tourism, Julian Guerrero Orozco

ProColombia CEO, Felipe Jaramillo

Qantas, Senior Executive Vice President The Americas, New Zealand, Pacific Islands & Japan, Stephen Thompson

SACSA, Legal Representative, Ramon Pereira

São Paulo Guarulhos Airport, CEO, Gustavo Figueiredo

Seabury Group, VP, Robert C. Hill

SKY Airline, CEO Holger Paulmann

Southwest Airlines, Managing Director Business Development, David Harvey

Southwest Airlines, Managing Director Marketing, Bill Tierney (or Director International Business Management, Steven Swan)

Travelport Global Head of Product & Marketing, Air Commerce, Ian Heywood

UATP, Director Sales Implementations LATAM, Robson Rodrigues

VivaColombia, CEO, William Shaw

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