Delta’s Q4 earnings results called out Latin America as one of the regions that contributed to the overall success of the airline. The region experienced a 5 percent year-over-year improvement in PRASM in the December quarter, and Delta expects that momentum to continue in 2017 with its recently expanded partnership with Aeromexico.
Delta’s claim of being the best U.S. carrier in Latin America and the Caribbean, and delivering financial and operational results, is the product of years of planning and disciplined execution and of keeping in mind the customers' needs at every touch point.
Nicolas Ferri, Delta’s Vice President – Latin American and the Caribbean, spoke to Delta News Hub about Brazil’s recovery, his plans on keeping regional momentum and the outlook on Mexico as the airline prepares to enter a historic partnership with Aeromexico.
Delta News Hub: Brazil’s road to recovery was called out by Delta President Glen Hauenstein during the earnings call week. What has been the secret to success enduring tough financial times and what are your thoughts to strengthen the market on its road to recovery?
Nicolas Ferri: It is encouraging to continue to see indicators of on-going recovery in Brazil and to have the market’s contribution called out leading the turnaround in the region. The macroeconomic environment in Brazil remains fragile but we are seeing signs of recovery, particularly in the U.S. to Brazil market.
Let’s start with our strategic alliance with GOL which recently reached its fifth year milestone. As partners, Delta and GOL’s commitment to customers is to place them top of mind in everything we do. This drives our team every day to deliver unparalleled operational reliability, introduce together improved services, such as the new lounges in Sao Paulo and Rio de Janeiro, permanent Delta placements on GOL’s website, new products for our customers and strong overall coordination of activity and planning across the business.
Delta’s work with GOL is reflective of two deeply aligned corporate cultures and teams which are focused on working together to improve financial results and to lead in the Brazil domestic marketplace. This seamless work is a critical element of our partnership.
DNH: Latin America had a 5 percent YOY increase. What are the next steps to keep the momentum through the year and beyond? And as Delta’s regional V.P. for the past six years, what has made a difference to the growth and success of the airline in the region?
NF: Every sub-entity in Latin America contributed to positive results on Q4 and we are committed to keep this momentum going. This includes an ambitious stretch revenue plan for the business. We will accomplish sustainable growth and momentum by deepening our alliances, prudent investments and a relentless commitment to safety and operational reliability.
In Latin America we have effectively transformed how we sell, maintained a remarkable team of professionals who have embraced change and fueled a culture of collaboration, transparency and cooperation with our alliance partners. Delta is seen as a pace setter in the airline industry in Latin America and that is a big source of pride for everyone.
Our partners play a key role and the strength of our combined ingenuity, network and resources which makes us stronger than our competitors. We strive to treat our mutual customers as our own and they in turn reflect their increased preference and satisfaction on industry surveys like Net Promoter Score, which measures customer experience and predicts business growth. We have a long way to go still, but we are on the right track.
Having a sustainable growth plan and bringing it to fruition with investments alongside our strategic alliance partners has increased our customer’s loyalty and trust. We will continue to invest in facilities, products, technology and innovation like RFID and to look for more opportunities to increase preference.
When I look back at six years leading the region, there are many things I can list that have been crucial to our success. However, the Delta difference is in our people. I thank each of our employees for living by the Rules of the Road and for their dedication to excellence.
DNH: We are about to start a joint cooperation agreement (JCA) with Aeromexico. This is going to be a game changer for the region. Where are we in the process?
NF: In December the Department of Transportation approved anti-trust immunity, and currently the process of divestitures is on-going. We expect that effective early in Q2 we will be able to start our JCA with Aeromexico. Furthermore, during the second quarter of the year we should complete our tender offer to own up to 49 percent of the outstanding capital stock of Grupo Aeroméxico S.A.B. de C.V.
Our relationship with Aeromexico is very strong, they run a remarkable business and the strategic alignment between our companies could not be stronger. Together we will become the largest operator between Mexico and the United States and that will bring a tremendous amount of opportunity for our customers, our employees and shareholders. Our ambition for the JCA is to build it as the very best in the business and we will not stop until that is accomplished.