Strategy Forum: Playing With The Big Boys!

The past decade has seen widespread consolidation in North, Central and South America and the Caribbean but this is not new to the regions. It has been going for years as Dr Craig Jenks, President, Airline/Aircraft Projects, acknowledged at yesterday’s (February 13th) Strategy Forum at Routes Americas in Santo Domingo, Dominican Republic. “This industry has a long history of mergers,” he said, using the complex formation of some of Mexico’s airlines as an example.

But does all this consolidation in the region restrict or promote growth? Jose Montero, Director – Planning at Copa Airlines acknowledged that “significant route opportunities still exist in Latin America,” and confirmed to The HUB that the airline hoped to announce a further three new destinations before the end of the year. “Word is catching on what we have and that is why in the last year the global alliances have spread into this region,” he added.

It is clear that the dynamics of the market have changed, at least in parts of the region. As Jenks noted, Brazil’s two largest carriers GOL and TAM “did not exist” in the 1980s and have brought a different approach to air travel in the country. “The danger is that large companies historically do not survive – they get too large!” Jenks added, making it clear that years of previous success will not safeguard any business in the future if it is slow to change to market developments.

The second session at the Forum discussed how organisations can stand out from the crowd and included an address from Honourable Minister Edmund Bartlett, Minister of Tourism for Jamaica. He explained how Jamaica is keeping visitors numbers up, not that there were over one million seats to the Caribbean Island last winter, more than the total combined numbers for the rest of the Caribbean.

James Fong, Assistant Director Airline Planning, Changi Airport Group, said that it is essential to “work closely” with all partners. “As a small country we have managed to build the airport by actively engaging with our partners,” he said.

Alex de Gunten, Executive Director ALTA, an organisation that represents the interests of airlines in Latin America, highlighted how far the region’s aviation industry has come in the past ten years. The average fleet age has fallen from 17 to 12 years, he said and airline costs have lowered 43 per cent since 1980. “This is an exciting and wonderful time to be in Latin America,” he said, but warned that measures need to be taken for the business to continue its development, highlighting that six of the top 15 airports in the region are “highly congested”.