How Digital Transformation Helped Avianca Survive the 2017 Pilots’ Strike

Nearshore Americas’ Alcides León spoke with CTO/CDO Santiago Aldana about Avianca’s digital transformation experience and how it helped them not only to survive the changes in the regional market, but also to face unforeseen events such as the pilots' strike in 2017.

digital transformation

Avianca, a company of almost 100 years old, went from being a modest regional operation centered in Colombia, to being the second largest airline in the region, with a fleet of around 190 aircraft, although it is in the process of reducing that to between 150 and 160. This growth put the established paradigms of the company to the test and forced it to digitally transform itself in order to be able to compete.

The great change for the company began with the arrival of Hernán Rincón to the presidency in 2016. Avianca decided to seat an executive from the technology sector in the chair of the president, with the intention of preparing the company for the great challenges imposed by an increasingly connected and globalized market.

Rincón, who had been a successful president of Microsoft in the region for several years, established a work plan to achieve the digital transformation of the company, and brought in Santiago Aldana to occupy the Digital and Technological Vice Presidency of Avianca (CDO/CTO).

Aldana is an industrial engineer who graduated from the Universidad de los Andes in Bogotá and holds several Master’s degrees in economics and administration. His youth and jovial tone is in keeping with a company that is proud of having more than 60% of its employees in the category of millennials.

A long-standing process

Aldana has been in the company for a couple of years, fulfilling a novel role, that of CTO/CDO, which forces him to see beyond technology. He is responsible for the user’s digital experience, which encompasses the entire user’s journey, from before the purchase to after the trip.

Rincón invited him to be part of the team with the promise of advancing together in turning Avianca into “a digital company that handles airplanes”, a concept that involves transforming the customer’s experience mainly, but that touches deeply two other areas: operations and personnel, which can have an important impact in achieving a “wow” experience, assures the executive, who recently presented the success case of the digital transformation of Avianca before thousands of people at the Adobe Summit.

Simplify Above All

Simplifying the airline is key to improving the customer experience and this is underpinned by improving the operational aspect of the airline.  And to achieve that improvement, employees needed the right tools to facilitate their work.

In short, Avianca had to focus on three main areas in order to carry out its transformation:

  • Clients
  • Operations
  • Employees

The main idea has been to improve the customer experience, personalizing it as much as possible, understanding the customer and significantly improving the points of contact with the brand, to improve the value that is offered and reduce the effort you need to make at each point of contact (web, app, counters, etc.). But a lot of work has been done in the two other areas to improve the customer experience as well.

Fundamental Alliances

Avianca’s technological platform before initiating this process was not the most modern in the industry, as Aldana acknowledges. However, the need to update it and optimize processes has allowed them to recover much of the lost time, in particular when making important alliances with large suppliers that have brought a very important know-how for the airline.

“The idea was not to look for large suppliers but rather important allies who work with Avianca and who develop their products with us, allowing us to take advantage of their great capabilities,” says Aldana. This allows them to serve as pilot tests of new technology, taking them to the forefront of the industry in some aspects.

Avianca’s technological allies are: Telefónica, Adobe, Microsoft, Amadeus, SAP, Accenture and Google.

These allies have also established alliances among themselves to promote technologies that interest a company like Avianca. For example, “Amadeus and Adobe have developed an alliance that allows them to combine the interaction with the client with the booking process,” says Aldana. He adds that this can be combined with technology supported from an alliance between Adobe and Microsoft, and reinforced by Accenture that allows them to integrate different elements in the Avianca channels.

Another example is the agreement between SAP, Adobe, Microsoft and more recently Amadeus, who work in the Open Data Initiative that allows sharing all the necessary information of the operational part and even take it to the client if necessary.

An Endless Journey

When Aldana joined Avianca almost two years ago, he had the difficult task of digitally transforming the company. “The cultural change of the organization was the most difficult thing to face,” says Aldana. An organizational change was needed where the company flattened the existing hierarchies. But one thing was clear: the client has to be the center of innovation and the most benefited from any change.

In addition, the company, which had grown to be the second largest in Latin America, had to face a change in its business paradigm to assimilate growth and seek greater profitability. Technology served as an enabler and inspiration for this change, supporting the decisions that had to be made with large amounts of data.

2018 was a fundamental year for the transformation process, developing a series of platforms such as CRM, Web page, a mobile app, operational platforms for employees and aircraft management, Adobe tools for managing customer relations, and so on. But this was far from the end of a journey; it had just begun.

Aldana is emphatic in stating that having these platforms is key to making decisions that increase profitability, but that part of the process is just beginning and very dynamic. Circumstances such as the pilots’ strike in 2017 can drastically change the company’s objectives in a given timeframe, but the important thing is to have the information that allows the company to make the right decisions.

“With the use of tools such as Adobe’s and others, we have improved sales by 340% in email campaigns,” says Aldana as a sample of the potential of the digital transformation process. The process that measures the turn-around time of the aircraft – the time from landing to a new takeoff – has also been transformed, eliminating paperwork, doing all the paperwork digitally and online, and allowing the company to manage any delay in this important meter in real time, and not later. This is an example of how the digital transformation of operations directly impacts the end user.

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Digital Transformation: Improving Operations Profitably

The aviation industry is quite particular and one of the main performance indicators is the number of aircraft available to an airline at any given time. When comparing the cost to add an airplane, or several, with the cost of a digital transformation process, it is obvious that this is a lower investment for the company, but with a great capacity to impact the business.

This is corroborated by Aldana when he points out that improving and simplifying user interaction with the brand, while maintaining or improving satisfaction is key to the growth of an airline and the cost of this process is many times less than any aircraft acquisition, so it is a very logical option to implement.

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