Avianca chooses Ecuador to start applying a low-cost rate that seeks to boost traffic

Modifies its tariff structure to add another proposal focused on price

With the pandemic not only that the airlines globally have had to deal with a decrease in their income from the contraction of passenger traffic, but are adapting their business models to a new reality.

The corporate market, which before the health crisis represented a significant fee, has been shrunk, internet purchases have grown and competition in certain destinations is focusing on prices.

Avianca, who last year entered Chapter 11 of the United States Bankruptcy Law, is one of the airlines that gets ready to introduce changes in his model and part of that includes his tariff family.

Ecuador is the first market that has selected to implement as of July 1 a new flat rate allocated to the passenger that privileges the price on other services. That is, a low cost rate to travel light (only with a hand suitcase, without winery luggage), similar to the one handled by the airlines oflow cost. It will introduce it under the Avianca strategy for all.

With this, the airline will have six types of rates, which identifies by sizes. The new one is called XS and will start from a base price, but will allow the passenger to buy services such as chair selection, additional luggage. It has restrictions such as accumulation of miles or changes.

"We are going to have tariff bands that will reach specific segments and that will stimulate the trip and compete better in destinations of great competition," says David Alemán, Ecuadorian who in May assumed the direction of Avianca for Central America and South America.

According to data managed by the airline, the corporate market has been reduced by new work modalities, but trips for family matters and pleasure tend to grow. And that is where the airline tries to capture a part of the cake with its new tariff model.

Avianca currently operates domestic flights in Quito, Guayaquil, Manta, Baltra, San Cristóbal and is pending to reactivate coca. Internationally it flies to Bogotá and El Salvador.

For July and August it will increase frequencies to Galapagos and expect to increase flights between Quito and Guayaquil.

"In general, we will increase between June, July and August about 15 % more in those destinations that we already operate," says German, who adds that recovery goes to different rhythms in some markets.

The Executive says that the expectation is at least half of this year with 50 % in the recovery of operational capacity they had before COVID-19 and at the end of the year have a level close to 60 %.

On the plans of new routes, German explains that they are looking for and evaluating opportunities to develop new destinations, especially point -to -point routes, without the need to go through ahubof connection. Locally study the possibility of returning to Cuenca.

"Without a doubt there is the intention of being able to explore opportunities, we will have very active sessions because we understand that there is a change of government and we want to understand how to make synergies in the issues that involve the opening of a base," says German.

Avianca has six airplanes in its local fleet and in the country it has between 45 % and 47 % participation.