Iberia rethinks its strategy in Ecuador

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Iberia rethinks its strategy in Ecuador after almost 50 years of uninterrupted service in the country, The main Spanish airline was forced to modify its operation in order to continue flying to Ecuador, the historic triangulation with Madrid ends.

The leading airline in connections from the old continent with Latin America is making some adjustments in its markets and Ecuador is one of the most historic and important for the airline., which has witnessed the large migratory flows between both countries historically and culturally connected. Given the economic complexity of Ecuador, new competitors on the route and the decrease in the traditional migratory flow, is that Iberia has made the decision to eliminate the traditional triangulation between Madrid, Quito and Guayaquil, This last city being the one that will stop receiving flights from this important world-class airline.

The “triangulation”

The well-known triangle that is formed between Madrid, Quito and Guayaquil have been operating for at least 20 years with the entry into service of the Airbus A340 fleet, With which the airline stopped its operation with several stops between Latin American countries to begin direct flights from Madrid to the vast majority of capitals in the region.. Remember that before the entry into service of the A340 transcontinental, Iberia operated in Ecuador with its Douglas DC-8 and McDonnell Douglas DC-10 aircraft.

This triangulation was born out of the need to have a direct flight from Ecuador to Europe., at that time the old Quito Airport, because of the height at which it was (2.800 meters above sea level) and its short track (2.800 meters), made direct flights impossible without a prior stopover. Guayaquil entered that panorama, as the perfect stopover and solution so that from sea level the company can fly without restrictions to Madrid and on the way, serve with daily flights to the economic capital of Ecuador, given that, throughout the history of Iberia in the country, both cities have been permanently served due to their importance and market.

in the last 10 years of operation of this connection between both Ecuadorian cities and Madrid, It operated daily on Airbus A340-300 and later with the incorporation of the larger Airbus A340-600 the airline increased its capacity., also facing a growing demand. But it does 4 years, with the start of operations of the New Quito Airport, This operation towards Guayaquil changed. The new terminal runway offered the unique opportunity to start for the first time in the capital's history, direct non-stop flights to Europe. Given an increase in 14% in international passengers in Quito after the opening of the new terminal, Iberia made the decision to start direct flights in November 2013 with 3 exclusively operated weekly flights, for its capacity and high performance due to the greater power of its motors for operation at height, with the A340 in its version -600 with capacity for 346, although they will soon be reconfigured with a new class.

Apart from Ecuador, The airline has also made adjustments to its operation in other countries, as is the case of Colombia, where the triangular operation was also applied, here after just over a year its triangulation between Madrid, Medellin and Cali, eliminating the stoppage in the latter since April, starting to operate with 3 weekly flights on Airbus A330 from “The City of Eternal Spring”.

The new operation

With the start of direct flights between Quito and Madrid, the city of Guayaquil was reduced to 4 weekly flights to Madrid, but thanks to its partner LATAM, clients were able to continue using their services in shared code. Guayaquil in December celebrated the arrival of Air Europa, offering a new service to the Spanish capital, but also putting greater competition in an Ecuadorian market that is currently going through an economic downturn., which has diminished for the first time in 4 years the growth of international passengers.

Given this complex panorama, where the high operating costs of operating in 2 airports in the same country and the decrease in migratory movement, is that Iberia announced at the beginning of this 2017 the closure of its Guayaquil base to focus all its efforts on Quito, where this change has been in effect since the end of March, and from which it will operate exclusively on A340-600 type aircraft for the reasons explained above., although Iberia has also managed to operate directly with its new Airbus A330 since this year.. The “new” flights will be 6 times a week, ceasing to operate only on Wednesdays, this until demand adapts to the new service and signs of recovery in occupancy and demand are shown.. It is practically a relaunch of a route that will benefit Quito, which continues to be the main gateway for foreigners to Ecuador.

For frequent customers of Guayaquil there will continue to be the option of their commercial partner LATAM Ecuador, which in the coming months will increase an additional direct weekly flight from Guayaquil to Madrid and will also be able to connect with the domestic flights of LATAM Ecuador between Guayaquil and Quito with the 6 direct flights and vice versa.

Strategies

Within these changes of the airline in Ecuador and seeking to attract new customers and reposition the brand in the consumer, is that in March Iberia launched a new credit card together with Visa, called Iberia Produbanco, which will allow its users to accumulate Avios for every dollar consumed and multiple additional benefits such as access to VIP lounges in Ecuador and the world.. This implementation is part of a regional loyalty strategy that began in Central America, covering countries like Costa Rica, The Savior, Honduras, Guatemala, Nicaragua, Panama and the Caribbean Dominican Republic.

Technical data

Iberia Statistics

Source DGCA.

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