SA Panel: ‘International travel market shows signs of heating’, says airline

For the first time since the beginning of the pandemic, the director general of Air Europa in Brazil, Gonzalo Romero, says he sees an important change in the behavior of passengers on international flights. Tickets are now being purchased more than three months in advance, and there are more children in the boarding lines, which may be a sign of a resumption of family leisure trips, according to him.

The company, which will reopen daily departures from São Paulo to Madrid at the end of March, is betting that flights abroad have begun to recover. The Northeast routes have not yet returned.

According to sectorial data from Anac (National Civil Aviation Agency), the number of passengers transported on international flights in the Brazilian market in December was still 50% below the same month in 2019. In the domestic market, this embezzlement is already much lighter, in around 13%.

This return of the daily flights from São Paulo to Madrid that Air Europa has just announced is a sign of hope in the resumption of the international, which is still skating while the domestic reacted before? Scheduling is done as demand requires. It is a sign that we are able to see a good post-pandemic repressed demand that we are waiting for so much with great anxiety. Today, really, the sign is good. Today, we have five weekly flights, and it goes back to daily in March, which is the same offer we had in the pre-pandemic period in São Paulo.

How is the occupation? Today is very good. We closed December above 91%. January we are around 87%. For March we are already at 87% and there are still two weeks of sales. For April, already with daily frequency, we are around 60% and still missing more than a month of sales. So, really, demand is heated.

We are already seeing something that we did not see last year, which is the purchase in advance. The passenger is scheduling, which is a good sign, because sales made in 2021 were to travel in 30, 60, at most 90 days. Now, we are already seeing sales for June, July, August. This wasn’t happening.

At people are more comfortable with scheduling the purchase of trip? It is a reflection that the passenger is more confident to schedule a vacation.

I went to follow our operations at Guarulhos airport. And I saw a lot of families, parents and children traveling on vacation. You can see from the door of the plane what kind of passenger is boarding today. They are families already traveling for leisure, planning. And this comes mainly from the easing of restrictions in European countries. This is heating up the market.

Another very good sign is our customer service channel. The number of calls, emails and questions we receive per day has grown a lot in the last month. They are passengers wanting to reschedule a date, exchange vouchers. There is a movement happening in other sectors of the company, not only in demand.

And price? Will they have to promote to help drive this demand? Our main recommendation for the passenger is always to try to plan for the lowest price. But we are permanently stimulating this demand. In addition to promotion, we are offering date change without penalty up to seven days before departure. So, we are encouraging the recovery, not only with tariffs, but with flexibilities and installments. We are working hard on this to try to recover as quickly as possible.

The scenario of the pandemic in Brazil has fluctuated a lot. We have a government that does not support the vaccine. At the peak of the second wave, in March, the president of Latam said that Brazil would be one of the last to regain freedom of borders on flights. How the Brazilian tourist has been seen today? At first, it was a little more difficult for us, but then, with the vaccine, Brazil made progress. This concept that you said we had at the beginning has changed. Today, the Brazilian market is fundamental for the recovery of tourism in Europe. Almost 95% of European Union countries already accept Brazilians as tourists, either with vaccination or just PCR. It is a sign that Brazil has managed to take a stand on the issue of vaccination and has conveyed a little more confidence to European countries.

How is the company’s financial situation? Did you lose half of the value in negotiation for sale? Before the pandemic, Air Europa has always been a super profitable, efficient, low-cost company with modern equipment. Before the pandemic, not because of the company’s situation but because of a business opportunity, they tried to sell. But then, the decision ended.

Air Europa maintains and continues with its own recovery plan. We think the main strategy was to make decisions like fleet unification. Older equipment is at most 4.5 years old. They’re super new. And that generates more efficiency, better fuel consumption and helps us a lot to get out of the pandemic.

Since October, Air Europa has achieved good cash flow, giving us the confidence to continue with our business plan alone. The company is trying to recover from the impact of the pandemic that has hit the entire industry.

What is the importance of the Brazilian market for you? Brazil is one of our main international markets, along with the United States and Spain itself, which is our main national market. It’s a priority. Therefore, we are increasing the daily frequency in São Paulo and we hope to resume the route in the Northeast this year.

That project to enter domestic flights in Brazil advanced? It was a business thought long before the pandemic, in 2018. We saw a possibility at the time of exploring the national market but then, with different business opportunities and different international agreements and the arrival of the pandemic, it was a little aside. Today, the focus in Brazil is the international business to recover the frequency.

How do you analyze the return of Galeão by the announced concessionaire? We and the airport concessionaires permanently deal with costs. We have big challenges with very high operating costs and demand that hasn’t helped much, in addition to the cost of fuel.

Grant delivery, of course, is concern. It is a sign that, in the pandemic, the aviation industry has not yet managed to fully recover.

I always say that the potential here is huge. And 2019 had a very good scenario for flights and passengers. If we focus on trying to minimally recover the offer we had at the time, I think the airlines and concessionaires will be a little more relaxed with the day to day.

X-ray

With nearly 20 years of experience in the aviation sector, the executive has been managing director of Air Europa in Brazil since September 2018. He has worked in countries such as Argentina, Bolivia and Chile. He has been in Brazil since 2015, where he previously held the position of General Director Brazil at Aerolíneas Argentinas

Joana Cunha with Andressa Motter and Ana Paula Branco