Mar del Plata: 18-10-18 COLOQUIO IDEA. Gerente de A. Argentinas foto: Fabián Gastiarena

Airlines seeks passengers at both ends of the business: executives and millennials

Aerolineas Argentinas is going to start 2019 with a two-pronged commercial policy: during the first months of the year it will modify the mileage systems of its passengers, to increase the base of adherents to the “Aerolíneas Plus” system. They want to capture, above all, the 5% of passengers that this year spent more than 100,000 pesos on tickets and that are not necessarily part of that loyalty program.

At the same time, the company started with a marketing experiment that, if it works, in a few months could become an important change within the group: it is beginning to position its controlled Austral as a brand aimed at a younger audience, so Give competition to “low cost” airlines.

“We are exploring it, the idea is to rethink the Austral brand over the next 60 days and see how it is spoken to that millennial audience that travels by plane today,” said Máximo Amadeo, commercial director of Aerolíneas y Austral, at an end meeting of year with journalists.

Aerolíneas is finalizing the year with an unresolved salary and a situation of conflict with the six aeronautical unions, which only during November made the company six stops.

The company, in addition, is ending 2018 with a deficit higher than that of 2017 (the final number will be known when the balance sheets are presented). In principle, the subsidies that the State gave him during this year would be around US $ 200 million, admitted Amadeo. Last year, the company had received subsidies from the Treasury for the equivalent of US $ 183 million.

But in addition to the harsh arm wrestling with the guilds to reduce costs, the state airline is coming out to show moves to be more competitive in the commercial area.

In recent days, the company used the Austral Internet site as a vehicle to promote a 10% discount on its tickets. In fact, this reduction was valid both for travel in Austral and Airlines, since it has been 20 years since the two brands operate as one in the ticket booking system. But the way to communicate it was the site of Austral.

“The data was that in a few hours there were 5,000 reserves managed from the Austral site, for now it was just a communication action, but we hired a consultant to see how to rethink the brand,” the official added.

In the immediate term, the company is focusing its efforts on selling more seats in business class. In private airlines, it is often said that economy class seats pay costs while “business” seats are what generate the profitability of the business.

In the case of Aerolíneas y Austral, the sum of the passengers who spent more than 100,000 pesos during this year (both for having paid in “business” or for being frequent passengers) is 5% of the 4.2 million people transported . But, Amadeo added, that 5% in turn represented 25% of the company’s income. The exchange rate used to measure this type of passenger is the exchange of miles. “In the last year we managed to get the passengers who exchange miles to go from 13,000 to 33,000 per month, the idea is to double that figure in the next two years,” he concluded.

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