#PortadaLat Speaker-Pablo Chiozza of Latam Airlines: “Our New Low Cost Strategy Will Translate into Fare Decreases of Up to 40%”
Travel Marketing is going to play an important role at our ninth annual PortadaLat conference next month in Miami. Pablo Chiozza, Sr. VP USA, Canada & Caribbean, Latam Airlines Group will be one the many major executives present at PortadaLat. Portada interviewed Chiozza to ask him about Latam's new low-cost strategy, the use of marketing tech to acquire new customers and more.
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Portada: We understand that you recently launched and implemented a low cost airline strategy. Can you please explain?
Pablo Chiozza, Sr. VP USA, Canada & Caribbean, Latam Airlines Group: "We are switching to a different business model in our Domestic Operations. Remember we operate domestic in the following countries: Argentina, Brasil, Chile, Colombia, Ecuador and Peru. We started with the buy on board (BOB) project. This is the first initiative of the new domestic business model. "Mercado Latam" will offer passengers a new on-board purchase concept with more and better food options -some with local flavor- allowing each passenger to discover, choose and create their on-board experience. Mercado Latam has been implemented in Colombia, Peru and Chile so far and will be implemented in Argentina, Ecuador and Brasil this year. We are also introducing Branded Fares and unbundling different attributes like luggage, seat selection and others, allowing the passengers to choose their fare according to the type of trip they are doing, paying only for what they need. This will translate in fare decreases of up to 40%."
Portada: How are you marketing this strategy to your prospect customers in the U.S. Canada and the Caribbean? (including your media plan)
P.C: SVP Latam Airlines Group:"The U.S . and Canadian markets are used to this type of product, it has been a local reality for quite a long time. Passengers will benefit from lower prices since they will be able to cater their product according to their needs. We have an important percentage of our sales via www.latam.com, and all the information about the new business model and each fare attribute is well described. Information will be also available in the GDS's and we are email contacting our BBDD with all the relevant information."
Portada: Why didn't you go for the ultra low-cost segment (e.g. Spirit and Ryan Air)?
P.C: SVP Latam Airlines Group.: "Our business model is different. On top of the Domestic flights we currently operate Long Haul flights between South America and US, Europe and Australia. We also operate Regional flights within South America. This makes our value proposition different. We operate wide and narrow body aircrafts, etc. Our Corporate passengers use our entire network and we are keen on covering all of their needs in our flights. There is also an unveiled opportunity to increase domestic traffics in the Region. There is a huge gap when compared to more mature markets like US and Europe. This is the gap we are trying to fill with the new business model."
Digital Technology is the base for our customer acquisition strategy in the U.S. We target all customers across the purchase funnel, from those who are in the early and "dreaming" stage to those who are ready to travel and seeking for the correct flight and fare.
How do you use marketing technology to acquire new customers?
P.C: SVP Latam Airlines Group.: "Digital Technology is the base for our customer acquisition strategy in the US. We target all customers across the purchase funnel, from those who are in the early and "dreaming" stage to those who are ready to travel and seeking for the correct flight and fare. Digital Marketing has allowed us to know what our passengers are looking for, which destinations, which dates, price ranges, etc, and with all this data we are able to reach them with correct and relevant information maximizing each contact with them."
In the U.S., the word "Latam" is also used to refer to the Latin American region. We are leveraging on this fact relating our brand to the Region and positioning ourselves as the experts and best option to fly to and within the Region.
Portada: What role does "Latin America as a concept" play in LatAm's marketing strategy?
P.C: SVP Latam Airlines Group.:" Latam is the new brand for the merger of Lan and Tam airlines. In the U.S .Latam is also used to refer to the Region (Latin America). We are leveraging on this fact relating our brand to the Region and positioning ourselves as the experts and best option to fly to and within the Region."
Portada: What do you think are the key features of a successful marketer in the Travel sector?
P.C: SVP Latam Airlines Group.: "In a nutshell a successful marketer should be able to know who their market (current and potential) is. What are their different needs according to where they stand in the purchase funnel and be able to drive and convert those passengers down the funnel poking them with the correct value proposition."
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