ROUTES EUROPE: Industry Interview - Albert Muntané Casanova, Head of Network Planning and Distribution, Air Europa
FROM THE LATEST ISSUE OF ROUTES NEWS: Our sister publication speaks to Air Europa’s head of network planning and distribution, Albert Muntané Casanova, on the carrier’s new Madrid–São Paulo service.
Q) You launched São Paulo in December 2013 – how has it performed so far?
A) The loads are in line with our expectations and following the market pattern in terms of seasonality. Being a new entrant in a competitive market is always a challenge, but this is taken into account in our business case. At the end of May, we will be re-scheduling our flights, which will arrive in São Paulo at 5:15 in the morning. It will then depart at 14:10 in the afternoon. Without a doubt the service will enhance connectivity with our local partners in Brazil.
Q) Are there plans to increase the service to daily?
A) Our goal is to design a product that is aligned with what the market demands, so if we see the market is demanding more frequencies, we will add them. We will combine this with our development in the north-east of Brazil, where we are growing our presence in Salvador de Bahía and offering increased connectivity with our local partners to other cities in the region.
Q) What are the main markets driving traffic on the route?
A) Market analysis shows this route has a stronger business component than other routes in our network, where leisure or VFR are the key drivers. In the Spanish market, we expect not only the typical corporate passenger but also SMEs, mainly combined with VFR. One of the key markets for this route is Barcelona, where we can see a steady and growing flow of passengers connecting from our short-haul flights into the Madrid–São Paulo route.
Q) How does São Paulo fit in with the rest of your Latin American network?
A) For Air Europa, entering this market was a logical step. We operate a fleet of 14 widebodies (A330 family) and, while some years ago, most of our operation was focused in leisure routes to the Spanish-speaking Caribbean, more recently, we have shifted our focus to a more traditional hub-and-spoke operation, connecting Spain and Europe with Latin America. We have daily flights from Madrid to Buenos Aires, Lima, Havana and Santo Domingo, and several weekly frequencies to Salvador de Bahía, Caracas, Montevideo, Puerto Rico, Santa Cruz de la Sierra, Punta Cana and Cancún.
Q) How has Iberia’s network review opened opportunities for you?
A) Iberia’s withdrawal from some routes has opened some opportunities, like Montevideo, which we started operating in June 2013, or San Juan de Puerto Rico, which we will start operating on May 22. Some critics said it would be difficult for us to successfully operate these routes when Iberia was losing money [on them], but our unit costs are very competitive. Iberia is not our only competitor and other carriers are expanding their networks into Latin America from other hubs, but we are confident that our business model enables us to grow profitably.
Q) Will you be increasing capacity to Brazil for the World Cup?
A) Yes, although it is a moderate increase and very specific in terms of which national team is playing, when, and at which city.
Q)How do you expect the World Cup to affect post-event demand for travel from Europe to Brazil?
A) A number of carriers have said they expect a decrease in business travel and an increase in leisure traffic during the tournament, which is what we expect. Post-event, we expect a surge in certain types of traffic (such as VFR), which will refrain from travelling during the event.
Q) You have a number of Dreamliners on order – when are you expecting your first to join the fleet and what will those aircraft allow you to do that you can’t currently?
A) We have eight Dreamliners (787-8) on order, which are expected to arrive in 2016 and 2017 on a gradual basis. The aircraft will provide more payload capacity in airports such as Bogotá, Quito or Mexico City, and our president has publicly stated.
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