Digital transformation has been relatively slow in the airline industry, but Avianca CEO Hernán Rincón, a former tech executive, has his sights set.
Prior to landing the top job with Colombia’s largest airline, Rincón headed Microsoft Latin America, and was charged with setting the tech giant’s long-term strategy for the region. Technology had long been the focus of Rincón’s career. But in April 2016, he replaced Fabio Villegas at Avianca, ending a long CEO search during which Alvaro Jaramillo Buitrago served as interim CEO. Rincón was an innovative choice: He had not previously run an airline or held high executive positions at an airline. His only apparent tie to the business was an earlier position at Unisys, which provides technology solutions to airlines and airports.
Avianca has an impressive heritage and standing within the global airline industry. It has been the national airline and flag carrier of Colombia since 1919, making it the world’s second-oldest airline. In Latin America, Avianca is second only to regional leader LATAM of Chile. Rincón would like to change that, and is undaunted by the prospect of digitising a nearly 100-year-old business. In the 21st century, airlines must meet the demands of increasingly connected travellers and use technology to improve the customer experience as well as operations. Ultimately, Rincón said, he wants to transform Avianca into a “digital company that flies planes.”
What this means, Air Transport World describes, is “everything from sophisticated, analytics-driven methods of pricing and selling Avianca’s core product – seats on flights – to using the airline and the passenger’s journey as a platform to sell a wide array of services. And using websites and mobile apps to provide the passenger with information that will make his or her air travel experience better and easier.”
Another cornerstone of Rincón’s plans for Avianca is a strategic partnership with United Airlines, America’s fourth-biggest airline by passenger numbers, which he sees as an ideal partner: They have complementary routes across the Americas, and both are members of Star Alliance, the biggest global airline network. Talks between the two started in January.
It would seem that Rincón was off to a running start. However, thus far he has encountered serious turbulence, due to a series of disputes – with striking pilots, and within Avianca’s board of directors. Before he can cement his partnership with United and realize his vision for digitisation, Rincón will need to clear the air. According to The Economist, an acrimonious court battle between two key shareholders is putting the company’s plans into a holding pattern.