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During the Wings of Change convention held this week in Santiago by the International Air Transport Association (IATA), one of the mains topics of discussion was the need to improve airport infrastructure in Latin America due to the rapid growth of passenger traffic in the region, a trend that is set to continue thanks to the entrance of low-cost airlines.
During the event, BNamericas spoke to Victoria Huertas, commercial vice president for Latin America and the Caribbean at airlines systems provider Amadeus, about this phenomenon and how technological and communications upgrades can help support efforts to improve physical airport infrastructure.
BNamericas: How do you evaluate the evolution of Latin America's airline industry, especially after the entry of low-cost airlines?
Huertas: There has been a lot of talk from the perspective that, when a low-cost airline comes in, the market is different market to that of the other airlines. I think that the mathematical rule that has existed throughout the region, since the first low-cost lines entered Latin America, starting in Brazil, is that the market segment that prefers this alternative isn't necessarily the same as has used traditional airlines before.
This undoubtedly creates growth in the air transport market. Chile's transport minister, Gloria Hutt, has said that there were 4mn people who traveled by plane for the first time in 2017. In Colombia, since the entrance of the airline Viva, the air market has grown 43% in the last three years. I think this is a positive phenomenon, which provides different and better alternatives for customers, with a value perspective different from that used by other airlines.
BNamericas: How much has the pressure increased on airport infrastructure with the entrance of these airlines?
Huertas: In reality, there is no country in Latin America that can now say that it has sufficient airport infrastructure for its current operating levels, and those that will come as the low-cost market segment continues to grow. There have been important advances in this area: the airports plan in Argentina, the new terminal in Chile, the plans for the new airport in Mexico City, the new Ecuador airport, the Bogota airport reforms, etc.
But now even there's even more pressure that governments and concessionaires have to see not only from the point of view of physical infrastructure, but also in terms of improving the technology used in airports, and also from the point of view of how to get to the airports, be it by taxi, transfer, train, etc., since in the Latin American capitals that have airports the terminals are 20km or 30km from the city center.
BNamericas: What technological infrastructure improvements is Amadeus is working on?
Huertas: We're working on lots of aspects, one of them being the use of new information services such as the cloud. This sounds like the most logical thing to do since we now use the cloud on a personal basis, but we're looking at it from perspective of airport infrastructure, where all the computer systems are dependent on the physical terminal, the security certificate that the terminal has, the cables that transmit information to the servers.
The transition to cloud services presents a huge opportunity to give greater service flexibility to the traveler. To provide an example, a passenger can check in to a flight from the airport parking lot instead of walking 2km to a counter.
Another technological need for airports is for all stakeholders, including the airport, to articulate value enhancement on the basis that the technology will help the terminal to give the traveler a better experience, and in order to do that you have to focus the processes on the traveler.
This sounds very logical, but it's not the case in most airports, because the operator has different performance indicators, such as revenue per square meter, performance of commercial outlets, boarding fees, etc. And you're not thinking about how to improve travel experience. You're not thinking, for example, how to facilitate payments. If you have to pay something extra, you shouldn't be sent to an office to pay for excess luggage weight and then be sent back to the counter, but instead, at the time they are checking in, you can make payments for any service or any fee that you have forgotten to pay.
The idea is that all processes and technologies should revolve around the passenger, and the different actors in the airport ecosystem have to start working on sharing their data and having common objectives so that their processes can be modified effectively.
BNamericas: How do you present these changes to airport operators?
Huertas: By establishing working tables, and with all the stakeholders involved: airlines, airports, commercial tenants, etc. First, there has to be a willingness to work together, second, to establish clear objectives and indicators so that everyone understands what is to be achieved with the airport upgrade, and third to establish the benefits that the actor wants to achieve.
Airlines obviously want lower operating costs when processing passengers, the airport wants to recover the investment that it's making in the infrastructure, be it physical or technological. But in the end what should prevail is the experience of the traveler.
BNamericas: Argentina recently altered a military airport (El Palomar) to receive low-cost flights. Do you think that Chile or other countries should take similar actions in order to prevent an eventual collapse of their major air terminals?
Huertas: If there's an airport that can be adapted, that could be an option. Constructing physical infrastructure takes time and there's also a space to improve passenger flows and improve what's being done with the current infrastructure through the use of technology. Airlines having better information sharing would improve the flow of passengers, airports would have a better visualization of the number of passengers that an airline handles.
I have the impression that at least the governments of Chile, Argentina and Colombia are clear about the tasks at hand. I believe that the will is there and the budget is there. The technological infrastructure shouldn't be ignored, because it can help alleviate and mitigate the burden while the physical infrastructure grows.
About Victoria Huertas
Victoria Huertas entered Amadeus in 2004 and currently serves as the commercial vice president for Latin America and the Caribbean. Prior to this, she worked as revenue management director for Aerolineas Centrales de Colombia (ACES), Alianza Summa and Avianca. She holds a Master's in finance and a degree in Production Engineering from the Universidad EAFIT in Medellín.
About the company
Founded in 1987 in Spain, Amadeus provides technologies focusing on IT, distribution and travel intelligence solutions to customers across 190 markets, which include travel agencies, airlines, airport operators, cruise operators and rail operators. In 2015, the European Commission named it as the number one European R&D investor in the travel and tourism sector, and since 2004 it has invested 4bn euros (US$4.9bn) in this area.