Although 2022 was a challenging year, not only for easy fly but for all airlines, the company does not lose its focus on continuing to connect the most remote regions of Colombia. In 2023, it expects to sell 20 percent more tickets and open nine more routes.
However, Felipe Gutiérrez, general manager of Easyfly, states that additional support from the Government is required to increase regional connectivity and thus give a boost to tourism in these areas, since the increase in the price of fuel and a dollar more expensive ends up hitting the trades.
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In an interview with EL TIEMPO, he raised alternatives such as going back to lower the VAT on air tickets to 5 percentespecially for regional destinations; subsidize fuel for airlines that travel to the most remote areas and implement one specially designed for regional time slots.
What is the balance that 2022 left Easyfly?
Perhaps 2022 is one of the most challenging years for the industrial area. 70 percent of the cost structure of an airline is exposed to the dollar and Easyfly is no exception. Last year we had a 20.8 percent devaluation and that impacted the costs of insurance, aircraft leasing, crew training, and maintenance.
Easyfly was forced to grow and look for new markets to try to offset the effects of the appreciation of the dollar
Easyfly was forced to grow and look for new markets to try to offset the effects of the appreciation of the dollar. additionally, the price of oil had an increase of 40 percent.
Airlines were faced with higher costs and greater competition from market players such as Ultra, Avianca, Viva AirLatam, Wingo and Satena, but in the regional approach that we have to connect intermediate cities directly and without stops in Bogotá, we managed to grow sales by 53 percent and passenger traffic by 35 percent.
This will prevent us from increasing the company’s operating costs and at the end of the year we had a net profit before taxes of about 28,000 million pesos.
This is a fundamental milestone for the company because it allows it to test itself in an extremely complex context, continue to grow profitably and comply with the reorganization agreement that the company has since March 2021.
How many passengers managed to mobilize and on unwanted routes?
We mobilized 1.9 million passengers, a little less than the 2 million that we will use as a goal, but sales grew 53 percent compared to 2021that has allowed us to counter the high costs that have been the most important challenges of the industry in the last 30 years.
We are reaching 48 connected routes from Bogotá, Medellín, Bucaramanga and Cali. We are the only private Colombian commercial operator that flies from Bogotá to the Olaya Herrera airport in Medellín, which saves users a lot of time.
In addition, due to the emergency that arose from the landslide in Rosas, we increased the Flights from Cali to Pasto and from Cali to Tumaco during the crisis season. We even achieved connectivity from Popayán to Pasto. We transported 10,600 passengers.
What will Easyfly bet on in 2023?
The challenges that were presented in 2022 are still present in the industry. Fuel continues to be at one of its highest prices in history and the dollar is still high.
This leads us to be extremely careful and responsible with growth.
We are going to open nine more routes during the year, among which are Bogotá-San Gil and Medellín-Nuquí. We have already opened Bogotá-Buenaventura and Bucaramanga-Saravena.
For the June season we open Bogotá-Caño Cristales and Medellin-Caño Cristaleswhile for Holy Week we will have Medellín-Mompox and Medellín-Popayán.
We believe that the future of Colombia and the exponential growth that will come from now on will be in the regions and ecological tourism.
In January and February, versus the same months last year, we grew 25 percent in sales, and we estimate that in 2023 we will grow 20 percent annually.
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How are they offsetting the impacts of an expensive fuel and dollar?
We believe that with an intervention in the price of fuel and VAT there would be fundamental incentives to connect the contributed regions of the country
We have sought as many efficiencies as possible. Hopefully there will be a push towards regional connectivity by the national government. Yes to some regional destinations we can return the VAT benefit to 5 percent (to air tickets) would be a fundamental incentive to develop these markets.
If in some regions the Government managed to subsidize part of the components of the fuel pricewe would achieve greater cost efficiency, and for the client, give a little more incentive to some destinations that have not been served historically and that are pending development.
In Pasto, aviation fuel is 52 percent more expensive than in Cali, while in Puerto Inírida it costs twice as much compared to a city like Medellín, Cali, Bogota or Cartagena. As the price of fuel grew 40 percent last year, airlines were forced to reduce the number of routes we operate to seek cost efficiencies.
We compete against a state airline and we do not have the same subsidies that Satena has, so it is a bit of an uneven competition, for this reason we believe that with an intervention in the price of fuel and VAT (on tickets) there would be Fundamental incentives to connect the contributed regions of the country.
What other proposals do you want to make to the Government?
To give the regions a boost, Easyfly believes that there should be a regulate special for regional slot machines. El Dorado airport is the most congested in the country and since there is such congestion in the good market strips (between 6:00 am and 9:00 am), if I ask for a slot they will give it to me at a time of stuffed. They leave good hours to the big cities and regular hours to the regions, so entering a market with bad hours is very difficult.
If regional slots are determined from the total capacity, companies like Easyfly could start operating at a good time in a market like Bogotá-Puerto Inírida, but the message is that don’t give the bad schedules to the regions. I think that the regions deserve special treatment, it is a bit different to treat what is different.
(Also read: Easyfly opens 9 routes in 2023 and hopes to transport 4% more passengers)
Has the return of the 19 percent VAT not affected the sale of tickets?
It does hit, and what the company did was pare back its network a bit. Last year we closed 16 routes and reopened six, because it is not so easy to cope with the rate increases. In fact, the opposite happens because there is great pressure from the competition to reduce rates.
What has prevented this, moreover, is opening new destinations, since it is in those destinations where you would have to enter with a ticket that would not allow the market to develop gradually.
Are you interested in flying from Colombia to Venezuela?
It has been thought about, but we are waiting to find out what is the development of the market by Satena, with the connectivity that the Government has asked it to serve from Bogotá and from Barranquilla.
We will be waiting to determine if there is a space or not, but for now we are focused on the Colombian regions. There is still a lot of opportunity for regional connectivity in Colombia and we want to develop those markets.