Avianca Cargo Latin America’s global carrier

Latin America’s top cargo carrier is repositioning its brand while enhancing customer experience. With global imports cargo markets on recovery thread, it expects better results year-on-year.

“Avianca Cargo operates one of the most extensive networks in the Americas, with approximately 220 weekly freighter flights and over 1,400 passenger flights. The network spans more than 70 destinations across 24 countries in the Americas and Europe, including key markets such as the United States, Colombia, Brazil, Chile, Argentina, Ecuador, Spain, the United Kingdom, and France. As for upcoming developments, Avianca is actively exploring new markets to further enhance its connectivity and strengthen its leadership in the cargo sector.”

By R. Chandrakanth

Avianca S.A, the flag carrier of Colombia, since 1919 (though registered under the name SCADTA) is the second largest airline in South America, after LATAM of Chile, having an extensive network of destinations in the Americas.

But it is the cargo subsidiary – Avianca Cargo – which is doing exceedingly well, having established itself as one of the top six cargo airlines in the world. It is no mean achievement.

Avianca Cargo offers over 220 dedicated cargo flights and more than 1,400 flights with belly cargo capacity. With 70 interline agreements, the airline reaches over 200 markets globally. It currently operates a modern fleet of seven A330 aircraft, with ambitious growth plans including the addition of three A330 P2F planes.

This expansion strengthens their capacity to serve key markets while maintaining operational efficiency. Miami is one of their largest cargo hubs where they continue to consolidate their dominant position by operating 60 weekly freighter frequencies and 64 under belly operation, all out of this important gateway.

Ahead of the Air Cargo Forum in Miami, the Vice President of Cargo Development, Avianca Cargo, Diogo Elias, talks exhaustively to Air Cargo Update about how Avianca has become a favorite cargo airline from Latin America.

At this year’s ACF event, Avianca will be announcing its new brand repositioning, understanding and reaffirming. “Our purpose of doing is our customers and everything that matters to them,” said Elias.

Showcasing at ACF
“This time, after successfully concluding a turnaround strategy that started three years ago, we are proud to see how this effort has paid off, and our customers worldwide are now able to perceive us as an airline that have set bases for consolidation in terms of network and fleet reliability, a more robust value proposition, infrastructure expansion, seamless internal processes, and cost efficiency. We are proud to be among the top three international cargo airlines operating to and from Miami International Airport (MIA),” Elias explained.

Adding, “Our direct services connect Miami with key destinations across Latin America, including Colombia, Ecuador, El Salvador, México, Chile, Argentina, Brazil, among others. On a weekly basis, we handle an average of 2,100 tons of exports, 3,000 tons of imports, and 400 tons of transit cargo to and from Miami. Our inbound shipments to MIA primarily consist of perishables with over 80% and outbound we transport technology, e-commerce, among others.”

Here’s the rest of Air Cargo Update’s interview with Avianca Cargo, one of the world’s busiest airfreight carriers with approximately 220 weekly freighter flights and over 1,400 passenger flights. Its network spans more than 70 destinations across 24 countries in the Americas and Europe.

You have invested in infrastructure expansion in Miami, adding 83% additional capacity – tell us what is your capacity utilization and plans to increase it?
According to our commitment to achieve the highest service levels in one of our largest and busiest hubs, we invested in our facilities and processes to increase capacity and improve time efficiency. During the previous Valentine’s season, we announced an investment in our temperature-controlled facility to increase our handling capacity to 83%.

In general terms, in Miami, on the last year we invested in our infrastructure, improving our delivery times up to 20%. Additionally, we implemented advanced technology for pallet movement within cold rooms. This system enables more efficient flower handling with less effort and resistance, minimizing the impact on the boxes and ensuring better preservation of the flowers. We also invested in a Jet Floor expansion in Bogotá, reducing perishables cargo exposure to ambient temperatures by 40%, which contributed to improved handling efficiency.

Transportation of flowers, key to Avianca
“Avianca Cargo has held leadership, consistency and expertise in flower transportation for more than 50 years of presence in this important market. Over the years, we have proven to customers and other third parties that we are a market reference for confidence by:

▪ Establishing long-term partnerships with our customers amidst seasonality, with a steady and regular capacity offer during pre and post seasons.

▪ Doubling our regular freighter capacity at every peak season.

▪ As a leading carrier of perishables in the region, we are proud to be a top carrier for the largest flower exporting markets worldwide (Colombia & Ecuador). Proving our continuous commitment in handling storing and transporting perishable cargo under the highest industry standards, while recognized worldwide as being the first carrier in the region to obtain the IATA CEIV Fresh Certification.

▪ Working closely with governmental authorities and other third parties, ensuring the end-to-end experience is seamless from all the stakeholders’ interactions within the value chain.

Are you working at a new record in flower processing and delivery times in the coming season?
Currently, we operate 48 frequencies with a capacity of over 3,000 tons per week, and our aim is to continue implementing the best practices to enhance our performance and provide our clients with the highest level of service.

Regarding our processes, we achieved record performance through meticulous planning involving all stakeholders. This successful season was marked by exceptional teamwork and coordination with local US hub customer authorities, including Customs and Border Protection, to review itineraries, identify peak periods, and proactively organize processes.

As a result, we saw a 40% reduction in breakdown time last year, which includes unloading flowers from aircraft, depalletizing them into individual boxes, inspecting for quality, and transferring them to temperature-controlled storage or refrigerated trucks. Overall, our delivery time improved by 20%.

We are currently implementing a new truck dock management system through our allies, allowing clients to coordinate and schedule appointments in real time, reducing waiting times and improving tracking and visibility. Since the beginning of this year, our delivery process in Miami has been 100% paperless, enhancing control and traceability. Additionally, we implemented a Truck Appointment Management System in Bogotá, reducing paper usage by 30% and cutting waiting times for cargo delivery by almost 60%. We are also activating this system in Medellín for the upcoming season to further optimize our operations.

With your expertise in the flower supply chain, are you also looking at other flower exporting nations, if yes, which ones?
In addition to Ecuador and Colombia, we also export flowers from San José (SJO), Guatemala City (GUA), and Lima (LIM). We are continuously exploring new opportunities in other flower-exporting nations to further diversify our supply chain and meet growing market demands.

Given that over 50% of cargo transported consist of flowers, fruits, vegetables, meat and other perishable goods, isn’t it skewed in favour of perishable goods and with that you carry enormous risk?
What constitutes the other 50%? Latin America is by nature a highly concentrated perishable export market. Being a leading operator in the region and while the demand for perishable goods continues to be relevant in global trade, strengthening our product portfolio with these will still be part of our strategy.

Within the perishable markets, there is room for diversification. Our product portfolio has a strategic combination of perishables from different countries, such as salmon from Chile, fruits from Brazil, Colombia and Central America, flowers from Ecuador, the berry and cherry season from the south, seeds, and vegetables, among others.

Additionally, the other 50% mainly consists of General Cargo (30%), which includes, for example, textiles, auto parts, medical equipment and e-commerce. We also transport dangerous goods (10%) and special products (10%), which include pharmaceuticals, AVIs, human remains, and valuable goods.

With demand for lithium going up exponentially, how have you positioned yourself in connecting the markets? Could you give some figures on lithium carried by Avianca Cargo?
Indeed, the recent demand surge of lithium has brought Latin American countries such as Bolivia, Argentina, and Chile into the global spotlight as these allocate the largest reserves identified worldwide, and at Avianca cargo we are positioning towards it.

So far, we have captured more than 30% increase in Sep’24 versus last year in the transportation of lithium batteries. As an IATA CEIV lithium-certified operator and connecting to global manufacturing regions through gateways such as Miami (MIA), Los Angeles (LAX) and Madrid (MAD), Avianca cargo keeps committed to support lithium industry growth under the highest standards of quality, service, and safety.

Combining our freighter operation with belly capacity, we operate +20 weekly frequencies from Santiago de Chile (SCL), +30 from Buenos Aires (EZE) and +20 from Bolivia (La Paz – LPB and Santa Cruz de la Sierra – VVI), and our plans going forward points for a continue capacity growth effective Q4’24 and beyond.

What was the overall cargo tonnage carried in 2023 and what do you estimate to be end of 2024?
Air cargo traffic in 2023 was still marked by an industry yield contraction—the return to pre-pandemic levels—and load factors down from the effect of capacity increase and demand year-over-year decline versus 2022. As consequence, Avianca cargo ended with over 430,000 tons transported, a -5% versus 2022. 2024 started with a recovery in worldwide volumes, yet Latin America started to capture from that momentum from 2H’24 onwards, therefore, our estimation for this year is to close in line with last year’s results in tons transported.

You have three Airbus A330 on order, could you tell when they are likely to be delivered, will they be available for the Valentine season? Also, what kind of capacities will the three aircraft add to Avianca?
As part of our expansion plan, we enhanced Avianca cargo’s fleet with the addition of +3 A330-300/200 P2Fs. We looked for an integrated network and fleet expansion strategy aimed at delivering value to our customers and meeting their preferences.

The first P2F joined our commercial partner AeroUnion fleet recently in July and represented a 60% increase in capacity vs the previous aircraft. By 1H’25 we will receive 2 more A330-P2F, and these are expected to be available by Mother’s Day Season. This focus lies in presenting a robust proposal with a clear product offering, high service levels, and other attributes highly valued by the customers. A330s are more fuel efficient than their counterpart, it has better volume payload and volume capacity than other medium-size WB while still allowing for flexibility in medium-range routes.

Cargo revenues have seen a dip of 6.7% decrease in second quarter of 2024 (despite doing about 300 cargo flights in a short window), is the competition really hotting up from Latin America?
Early 2024, we evidenced an overall recovery in global cargo markets, mostly from Asia Pacific and Middle East driving the demand surge. Yet, momentum in Latin America started stronger by Q3’24 with a lower growth compared to other regions, since the largest long-haul markets from United States to South America were still contracted.

In addition, the freighter capacity remained up versus 2019 while passenger widebody continued the recovery path by then. All these, impacted industry load factors and Latin America’s yields at a worst level compared to other global markets, explaining the decline of cargo revenues in second quarter 2024 versus 2023. By Q3’2024, Latin America’s imports cargo markets recovery, mostly from e commerce, will contribute to better results year-over-year and versus 1H’24.

What is the present cargo network like and the new markets Avianca will be connecting in the near future?
Avianca Cargo operates one of the most extensive networks in the Americas, with approximately 220 weekly freighter flights and over 1,400 passenger flights. The network spans more than 70 destinations across 24 countries in the Americas and Europe, including key markets such as the United States, Colombia, Brazil, Chile, Argentina, Ecuador, Spain, the United Kingdom, and France. As for upcoming developments, Avianca is actively exploring new markets to further enhance its connectivity and strengthen its leadership in the cargo sector. These initiatives aim to expand the reach of its network, enabling more efficient logistics solutions across additional regions.

You have entered into partnerships with several GSAs in different countries, could you walk us through some key partnerships and the projections of cargo you are likely to be carrying?
For the past year, we began the process in which we worked around our objective of rapidly expanding our global footprint by restructuring our network of GSA in record time across countries like the United States, Chile, the Netherlands, Belgium, India, Japan, China, among others. New highly qualified partners such as ATC Aviation, HIT Cargo, Hermes Aviation, ECS Group, GSA Force, and GOCargo, who share Avianca Cargo’s values, have been selected to ensure a coordinated sales approach in various markets with their expertise, dynamism, proximity, and rigor.

Tell us how your partnership with Turkish Cargo is going? Will you be entering into any other tie-ups with other cargo airlines?
A year after signing the memorandum of understanding (MOU) in April 2023, we proudly announced the launch of a new service between Liège and Miami. This initiative represents a significant milestone in our ongoing efforts to create synergies and explore opportunities for mutual growth. With this new service, we have enhanced cargo connections between the regions, providing customers with increased capacity and access to a more extensive and interconnected global network.

Through our partnership with Turkish Airlines, we connect to a network of over 340 destinations. Our primary focus is on establishing connections with Asia and other regions where we currently do not operate. Additionally, we aim to integrate various points into our network, such as linking Europe to our key locations.

Tell us the kind of investment you have made in digitalization and how it has helped in cargo movements?
We are deeply committed to expanding our digital booking channels to improve accuracy, reduce confirmation times, and enable our clients to plan, confirm, and manage reservations digitally 24/7. In 2024, we undertook several key projects to enhance our digital capabilities. One of our significant initiatives is Qanty, our truck turn management system implemented in Bogotá and Medellín. This system optimizes cargo delivery times for our customers, ensuring more efficient operations.

We also achieved a milestone in Marketplace Integration. Avianca Cargo became the first airline to connect with all three major cargo marketplaces—CargoAI, cargoONE, and WebCargo. This integration allows us to offer 100% of our routes for GCR cargo, significantly expanding our reach and service capabilities.

Through Airblox, we utilize an online marketplace to exchange cargo capacity via electronic block space agreements (eBSAs). This platform enables us to offer over 280 flights for the next two months, providing greater flexibility and options for our clients. Our CargoWise Integration spans six countries: Panama, El Salvador, Brazil, Colombia, Ecuador, and the United States. This integration streamlines operations for over 25 key cargo agents, enhancing our overall efficiency and service delivery.

Additionally, our partnership with DB Schenker marks a significant achievement. Avianca Cargo became the first airline in South America to implement an integrated system with DB Schenker, which enhances operational efficiency and coordination. These initiatives not only strengthen our operational efficiency but also position us as leaders in digital innovation within the cargo industry.

Participating in freight marketplaces, how has that helped Avianca Cargo, can you quantify?
Sales through digital channels experienced significant growth of 55% in the last quarter compared to Q2. These channels are primarily leveraged in Europe, which accounts for 78% of the total sales generated through this platform. However, we are actively working to increase this figure by encouraging broader adoption of digital channels across other regions, aiming to further optimize our sales processes and enhance customer experience globally.

Where does Avianca Cargo see itself by 2030?
Our vision with Avianca cargo is to position it as a leading cargo operator in the region and be the preferred cargo carrier within Latin American markets, by 1) offering a consistent network with the most modern medium sized cargo fleet; 2) robust customers’ value proposition; 3) driving a process simplicity organization and 4) maintaining cost efficiency as a priority. We are still on our path towards that goal, while we have started achieving a market consolidation that is being recognized by our customers worldwide.