Ultra Air CEO William Shaw at CAPA's Latin America Aviation & LCCs Summit
The CEO of Colombian startup Ultra Air provides an update on the carrier’s roll-out, future fleet plans and how airlines are navigating higher fuel costs.
Transcript
William Shaw:So Ultra Air has been operating for 6 months now. It's been awesome. 650,000 people, over a million tickets sold, 92% load factor. We are extremely exhilarated with the reception the Colombian people have had with our airline. So being a part of the, the original founding team that we had at at Viva, it was very easy to start Ultra because the Colombian market is already very familiar with what an ultra low-cost carrier is and how to fly low cost and what that means to the country. I mean, we took, with Viva, we took the Colombian market from 12 million people a year flying to about 27 million people. By the year 2022, it's going to be 30 million people flying. And we hope to continue this trend until, you know, the year 2030, where there's going to be about 50 million people flying. So it's a huge marketplace and a huge opportunity. And we're very happy at Ultra that, you know, we're gaining our market share. We're close to 10% on the routes we operate. So we're very, very happy. So our original fleet plan was to grow a lot faster in the early onset of the airline. But at Ultra, we made the decision to stay with 6 aircraft this year, but grow the fleet by almost double next year and then have a growth of 8 aircraft per year for the next 3 years until we reach a total of 40 aircraft. And at that point, we'll either IPO or look for a strategic partner. Well, fuel cost is a great equalizer, right? We all pay for fuel. Now, there might be airlines that get seriously into hedging, but you don't want to hedge too much because if you do, Then it reverses. You might get stuck in a situation like Southwest did a couple of years ago. So it's a great equalizer. We all have the same cost. So it's a regular pass-through onto the consumer and it just takes about 6 to 8 months for the pricing curve to actually match what your cost curve is on fuel. So we're in that process now. You know, fares are increasing, but you still gotta keep your advantage as an ultra-low-cost carrier. So it's trebled, right? So tripling your fuel costs means that you're basically selling your— you sold fares at below what the fuel's going to cost you. So it's going to take a little while to get to that curve where, you know, you're covering your fuel, you're covering your direct operating costs and your variables, but it'll get there. Fares will match the costs soon and fuel is coming down, right? It can't stay this high forever.
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