For eight years, airline industry veteran Barry Biffle played a key role in expanding Florida-based Spirit Airlines into a profit-making machine while maintaining some of the lowest costs in the US airline sector. He now hopes to do the same at the helm of VivaColombia, which is on the cusp of launching its first international flights this year.
Biffle, the former chief marketing officer of Spirit, became chief executive at Medellin-based VivaColombia in August 2013. Aside from learning Spanish, he has kept himself busy preparing for what is set to be a busy year for the Colombian carrier, which began operations only in May 2012.
The airline will open its second base in Bogota in June, and base two Airbus A320s there. In July, VivaColombia will launch its first international flights to Panama City from both Medellin and Bogota. It will follow this with flights to Quito from Bogota in October, and then launch Bogota-Lima in November.
VivaColombia's new international flights will pit it against the region's legacy carriers that have traditionally dominated on those routes, such as Avianca and Copa Airlines. "It's not that we are targetting the legacies, that's all there is here," Biffle tells Flightglobal. Pointing out that Latin America lacks the scale of the US and European markets, he adds: "There's not a lot of room for a bunch of LCCs. To be the one LCC [on those routes] is a really good thing."
Observers familiar with Spirit will know its strategy well, which Biffle espoused for years when he was the public face of the airline along with chief executive Ben Baldanza. Spirit's business model has remained largely unchanged in recent years - the key thrust is to identify markets where fares are high, enter those routes, drop the average fare and stimulate traffic as a result.
At Spirit, fares usually went down 25-30% after it entered a market, notes Biffle. At VivaColombia, which operates in a lower-cost environment, the airline can pull average fares down by 50-60%, he says.
"We believe we can cut [Panama City] fares by half," says Biffle. He estimates that round-trip fares from Colombia to Panama now go for about $400-$500 on full-service carriers. Biffle believes VivaColombia can break even at $50 each way. "If you look at us versus Avianca, our costs on a CASK [cost per available seat kilometre] basis will be half of theirs."
VivaColombia route map
Source: FlightMaps Analytics
Aside from debuting its first international flights, VivaColombia has also set its sights on expanding its market share in the domestic market. Its market share is now just under 10%, putting it in third place behind big players Avianca and LAN Colombia. Biffle believes this could grow to 25-30%.
"Obviously all that will be stimulation, and not stealing it from LAN or Avianca or Copa [Colombia]. We carry a different clientele," he says. Drawing similarities with Spirit, Biffle says the airline sees potential in both domestic trunk routes and launching service to smaller cities that are not well served.
"There are opportunities to fly routes that have not been flown like in my past time [with Spirit]," he says. "There are also opportunities in big markets where people are priced out, and they go do a bus. It's a little bit of both. Spirit flew to Atlantic City, no one else did it. But they also flew to Dallas and Chicago."
Like at his previous employer, Biffle says the airline sees immense potential in offering air travel to a segment of the Colombian population that was not able to afford it previously. He cites an example from his Spirit days, when the airline launched service between Fort Lauderdale and Port au Prince, a route that only American Airlines had served.
"The average GDP per capita in Haiti was $700. American was selling $700 fares... We were able to go in and drop fares by 70%," says Biffle. "Most of what we do here [at VivaColombia] are more similar to Spirit's Haiti example... It's really neat to be part of that, changing the country."