This Low-Cost Airline Brought New Life to International Travel During the Pandemic

For almost two years, air travel of any sort has been a hard sell. In Medellin, Colombia, however, Viva Air is making it look easy. Developed by Irelandia Aviation, the company behind low-cost Irish carrier RyanAir, the former VivaColombia was responsible for just 15% of all flights in Colombia before 2020. Once Covid-19 arrived, it put 75% of its employees on unpaid leave. It also cut management, pilot and staff pay by 30% to 50%. The airline hedged on fuel prices. It shifted routes from big cities to socially distant vacation destinations. The carrier upgraded its fleet to more fuel-efficient models. It also postponed a rebrand to Viva Air until 2021. According to aviation data company Cirium, all of the above paid off: Viva Air doubled its flights and seats within Colombia, while adding destinations in Peru, Mexico, the Dominican Republic and the U.S. At an average of $42 one-way, Viva Air’s flights are the cheapest in its home market and now account for 25% of all air travel there. Viva Air CEO Felix Antelo explained how the carrier navigated Covid-19 while finding new customers and ports of call. This interview has been condensed and edited. Adweek: How has Viva Air been able to expand during some of the worst portions of the pandemic?Felix Antelo: When the pandemic started, we knew the demand that would come back first would be the demand that Viva aims for, which is basically tourism and VFR [visiting friends and relatives] traffic. Especially in Colombia, we anticipated new domestic demand. In both cases, we were spot on. Viva Air CEO Felix Antelo We were confident that the low-cost model was going to emerge stronger. It happened before: After every single crisis since 9/11, the LCC [low-cost carrier] model has emerged bigger, stronger and better. After the financial crisis of Lehman Brothers, after the SARS crisis, after the H1N1 virus… and it's happening now. We were the first airline to be certified for biosafety protocols both in Colombia and in Peru. We didn't enter into Chapter 11 or any kind of formal restructuring. We're very proactive: working with vendors, stakeholders and employees; being very realistic; and taking some measures that were hard but necessary to assure the survival of the company. How does Viva’s size enable it to be more nimble when facing pandemic-related changes to travel?Viva has the lowest price in the region. And we want to have the lowest cost in the world. But we understood very early that this was not enough. We completely changed our fleet to brand new [Airbus] A320ceos and neos and now, on average, [the age of] our fleet is below one year per plane. We went from having an average network to one of the most powerful networks in Colombia, with a lot of emphasis on the tourism routes, especially to the beaches. We invested heavily in technology—more than $1 million over the last year alone to upgrade our website and our app. That came hand-in-hand with the rebranding of our airline in May. Those were factors that differentiated us from our competitors which, to be fair, had some other issues getting out of Chapter 11 and being in formal restructuring. We took advantage of that. Where did Viva Air see the opportunity for expansion amid the pandemic’s uncertainty?We think that tourism for cities will eventually come back, but later than the beaches, forests and open spaces due to Covid. I'm talking about the new Cancun route, I'm talking even about Orlando in the U.S, I'm talking about Punta Cana that we've just announced in the Dominican Republic. Obviously, between Peru and Colombia, where we operate in both countries, we've increased our frequencies between those two countries and more than doubled those routes. In the case of Miami, which was our first international route, we saw a very tactical opportunity. In May, June and July, when there were very few vaccines in South America, Colombians started to fly and get their vaccines in the U.S. We went from one daily flight to Miami to managing five daily flights for almost two months. We just announced 14 new domestic routes in Colombia. They’re mainly from mid- or small cities to tourism destinations, but flying from cities that no one flies to: Valledupar, Nevia, Pasto. We are able to do this because we have managed to reduce our cost to where we can offer really low fares and still make money on many of these flights and be sustainable. International Travel Comeback Grounded by Pandemic Realities Looking at Viva Air’s international expansion, how is the airline able to take on new customers in those countries while contending with changing travel restrictions?It’s a changing scenario all the time. Remember the delta variant and all the noise it made in Europe and Asia and the U.S.? The delta variant didn’t explode here in South America. We don’t know if that will happen with omicron, so we are being very active in following the trend. With the vaccines, plus therapeutics, we will start to win this battle against Covid definitely by the second half of 2022. With restrictions in mind, we will need to understand how we evolve with the new routes and with existing routes. We may have to cancel some international flights to put more domestic seats in Colombia or in Peru. We have a network planning team that constantly studies new routes. We have more than 20 routes in study right now, not only in the U.S. but also in Central America and South America. But in the U.S., we have some destinations that we are interested in: Denver, Atlanta, New York, Texas. In the case of the U.S., we started investing heavily in online marketing: Mainly, we’re looking for local partnerships. The U.S. consumer is very focused around new U.S. brands and airlines, especially in this case, and you probably need to partner with someone local there. How has Viva Air been able to use data culled from its site and app to guide expansion?We moved just below 7 million passengers in 2020. This year will be above 10 million passengers. When, on top of this, you add a credit card issuer like Tuya [which, along with loyalty program Puntos Colombia, provides the Viva Air credit card], the possibilities are almost infinite. We have enough data to know that a customer flies once or twice a year to the beaches, and we can get to you and offer you the bag, the seats together and the insurance. We were using this data and getting max value out of this, between 30% and 40%. We're working hard on this and just set up a new team for business analytics that's working together alongside the revenue management team, so I think we can double or triple the value that we can get out of the data. Low-Cost Carriers Fly Above Covid-19 Turbulence