Airways Magazine

Interview: Avianca CEO Applauds Airline Consolidation In Latin America

 Breaking News
  • Aer Lingus Cancels Cityjet Route Contract MIAMI – Aer Lingus (EI) canceled its contract with Cityjet (WX), which provided flights on behalf of the former on various routes, including ones from Dublin to London City Airport...
  • Boeing To Lay Off 6,770 Employees MIAMI – Due to low demand as a result of the COVID-19 pandemic, Boeing has decided to lay off 6,770 employees from its US workforce.  In the previous month, Boeing...

Interview: Avianca CEO Applauds Airline Consolidation In Latin America

Interview: Avianca CEO Applauds Airline Consolidation In Latin America
February 04
14:44 2020

MIAMI — After 100 years of service, Avianca celebrated its centennial with a global birthday tour across its major hubs in the Americas. The airline, led by its CEO, Anko van der Werff, touched down in Miami to extend the jubilation and honor Avianca’s 74-year history with the city.

The event took place at the renowned Rusty Pelican Restaurant on Key Biscayne, with the Miami skyline resting in the backdrop. In attendance were airline executives, diplomats, and other distinguished professionals that attested to the impact the carrier has had on commercial aviation history.

Airways was granted valuable time with Avianca’s new CEO prior to the event, who highlighted the struggles the airline has faced, including bankruptcy, and the measures that have been taken to rectify its path.

Looking back: Anko van der Werff is the new Avianca CEO


Back in June 2019, van der Werff was named CEO following the sudden resignation of former Avianca chief executive, Hernan Rincon.

In addition to the C-Suite’s shakeup, the airline’s major shareholder, German Efromovich, was removed from his position of Chairman of the Board of Avianca Holdings SA, following a loan breach that gave his voting powers to United Airlines (UA).

The US carrier had found itself in control of an odd situation in Bogota, Colombia, where Efromovich defaulted on the repayment of a $456 million loan that was signed in November 2018.

United took legal action against Efromovich for defaulting on the loan it signed six months prior, allowing the US carrier to take over the collateral 51.5% stake and 516 million shares of common stock that Efromovich’s group has on Avianca Holdings.

With this execution, Efromovich’s seat and voting rights were immediately surrendered to the American carrier. However, looking to avoid breaching United’s own agreements with its pilot’s unions, these powers were transferred to Avianca’s second-largest shareholder, Kingsland Holdings.

Roberto Kriete, Kingsland’s chief, and former Chairman and CEO of Grupo Taca, was appointed by United as the new Chairman of the Board of Avianca Holdings. Kriete declared that a new Avianca CEO should be elected shortly.

Anko van der Werff arrived in the midst of an accentuated crisis in Bogota. Although he has served as CEO for less than a year, he seems proud of the progress made during his short time at the helm.

After negotiating with bondholders and creditors in order to acquire additional funding, van der Werff tells Airways that Avianca is back on “stable footing” with enough cash to continue operations.

After arriving in Bogota to assume his new position, van der Werff encountered many commonalities between Avianca and his former employer, Aeromexico, where he served for five years as Chief Commercial Officer.

“There’s a lot of similarities between the organizations,” he says. “Not only because we’re an airline, but also because there’s a U.S. partner we want to build a joint venture with.”

“We are both part of a global alliance and we’re both hub and spoke. The main difference is financial stability,” van der Werff notes.

Nevertheless, the CEO has already begun instituting the same methods applied at Aeromexico in order to ensure that Avianca remains competitive in an ever-growing Latin American market.  

With its financial woes largely in the past, the young CEO is eager to begin work on other tasks, including building its joint venture with United Airlines and Copa Airlines.

PHOTO: United Airlines.

When asked about the importance of Avianca’s partnerships with United and Copa, van der Werff commented that “alliances have been trending over the last few years, whether it be joint ventures, equity stakes, or a combination of both that are really driving value lines.”

The Dutch national executive also went on to discuss Delta’s emergence in the region through partnerships with Aeromexico and LATAM Airlines, noting that he sees “the Delta-LATAM tie-up as something positive for the industry.”  

In van der Werff’s eyes, consolidation has been a force for good, especially in a previously fragmented market such as Latin America.

“Any form of consolidation I applaud because [Latin America] is still a region where everything is emerging and developing and we needed stability. I think consolidation can help in that sense,” he said.

Avianca’s first Boeing 787-8 undergoing pre-delivery preparations at Paine Field. (Credits: Jeremy Dwyer Lindgren)

In regard to Avianca’s fleet, van der Werff believes the airline must continue to downsize in order to remain efficient. He cited the financial burden created by growing “too big, too fast”.

With a relatively young fleet of 156 aircraft, he believes the Colombian flag carrier “can wait a bit before taking on a lot of new orders, therefore having a window in which we can fully stabilize and get back on track financially.”

Just recently, the airline canceled a purchase commitment for 20 Airbus A320neo and delayed deliveries of already committed A320neos until 2025.

Rafael Luiz Canossa
Photo: Rafael Luiz Canossa

The airline issued a release on January 7 noting that “The company has reduced its firm commitments to 88 A320neo aircraft from 108,” and that “previously scheduled firm A320neo-family deliveries in 2020 through 2024 have been deferred or canceled.”

In order to improve upon the corporate culture, van der Werff is implementing a “back to basics” philosophy that emphasizes teamwork across all levels, which he considers a “Latin American challenge”.

Post Interview Celebrations


After the interview, the party commenced as Avianca gathered its guests in the upstairs ballroom. There, the airline’s team began the night with a fashion show depicting the changing styles in flight attendant attire throughout Avianca’s history.

Postcards of Avianca’s Douglas Corporation DC-3. (Credits: Author)

Much of the evening was focused on Avianca’s position as the oldest continuously operating airline in the Americas, and the second oldest in the world.

Van der Werff was also keen on honoring the connection Miami has had with Avianca over the years. Avianca has operated routes between Colombia and Miami since 1946, and today operates 13 daily flights between the two destinations.

Avianca Boeing 720-059B at Miami International Airport in 1972 • Photo: Clinton H. Groves

Overall, 5.1 million passengers have traveled between the South American country and South Florida, making Avianca the largest foreign airline in Miami.

For an airline that carried over 30 million passengers on approximately 250,000 flights last year, this is still an incredible feat that the entire company was proud of.

In the audience were two grandchildren of Avianca’s co-founder, who were honored by van der Werff during the ceremony for their grandfather’s contribution to aviation.

Avianca was also recognized by the International Air Transport Association (IATA) with a gift that resembled the rotor blade of a prop aircraft. The award was to acknowledge the airline for its impact on commercial aviation in the western hemisphere and the world as a whole.

The ceremony concluded as any birthday celebration would: with cake. As everyone congregated closely, the Avianca team gathered on stage to cut the cake and offer a toast to the rich history of the airline and the culture it has established.

Comments
0
20
fb-share-icon20

About Author

Andre Madrid

Andre Madrid

A sophomore Finance student at the University of Miami, and an aviation enthusiast since my early youth. When I'm not staring up at the sky, I enjoy watching war documentaries and reading about current events.

Related Articles

Current Issue

Cart

Subscribe to our weekly Newsletter

Polls

If you had a booked trip today, would you cancel it because of the ongoing Coronavirus outbreak?

View Results

Loading ... Loading ...

@airwaysmagazine

Airways YouTube Channel

Polls

If you had a booked trip today, would you cancel it because of the ongoing Coronavirus outbreak?

View Results

Loading ... Loading ...
0