What Avianca’s innovative CEO choice tells us about airlines’ future


Choosing a CEO to implement a visionary strategy for interacting with passengers digitally.

Avianca’s innovative pick as its new CEO, Microsoft Latin America president Hernán Rincón, immediately brought to mind a recent quote from Enrique Beltranena, the CEO of Mexican low-cost carrier Volaris. “I believe that in 5-10 years Volaris will be a digital operation that flies airplanes,” he said in November at the 2015 Latin American and Caribbean Air Transport Association (ALTA) Airline Leaders Forum in San Juan, Puerto Rico.

In other words, Beltranena is starting to think of Volaris primarily as a digital company that just happens to have an aircraft fleet. In an interview this month with The Motley Fool, Beltranena expanded a bit on this notion, explaining that Volaris is seeking to develop “much more touch-points to sell throughout our customer journey,” adding, “We have identified opportunities to sell products and services around [the] traveler’s journey, which will allow us, for example, to have better presence on and the mobile apps … We strongly think we can really improve our onboard variety of products and start selling taxis and hotels and everything onboard.”

Avianca Holdings spent about eight months searching for a new CEO after former CEO Fabio Villegas announced his intention to leave. Their search landed not on someone who had previously run an airline or held high executive positions at an airline or has any familiarity—based on his resume—with the intricacies of how an aircraft works. (His one tangential tie to the airline business comes from having previously worked at Unisys, the IT company that, among other things, provides technology solutions to airlines and airports. But Rincón worked in Unisys’s financial services business, not its transportation business.)

Instead, Avianca chose the man whom Microsoft, the Seattle-based software and technology giant founded by Bill Gates, described as its “ambassador” to Latin America, where Rincón oversaw all of the company’s sales, marketing and services operations and set its long-term strategy for the region.

Avianca did not choose a CEO to manage takeoffs and landings and inspect an A320’s vertical stabilizer. The company’s board of directors, led by chairman German Efromovich, chose someone to implement a visionary strategy for interacting with passengers digitally. This means 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.

I can’t imagine that 10 years ago, or even four or five years ago, a major global airline company would tap someone with Rincón’s resume to be its CEO. But in 2016, it makes perfect sense; Avianca is likely ahead of the game. Ten years from now, I suspect more and more people running airlines will be digitally-oriented rather than aviation-focused.

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