“We want Madrid to be a connectivity hub at the same level as Paris or others”
Ramiro José Oliveira Sequeira (1982, Lisbon) He has more than two decades of operational management in large companies in the aviation sector in his suitcase. After holding positions of responsibility at Iberia Express and Vueling and assuming the interim management of TAP – the Portuguese company that now appears on IAG’s radar -, he picked up his phone last year to assume the operational management of Iberia. And he did it at a key moment: in the prelude to the ambitious strategic plan that involves an investment of 6,000 million euros until 2030. To analyze this challenge, Sequeira sits down with Economic Information in the new Iberia Space in Sao Paulo, within the framework of the presentation of the final routes to Recife and Fortaleza, both in the northeast of Brazil.
What has led you to opt for these routes? What potential have you seen?
Iberia is betting a lot on Latin America. Not only now because there is that flow of demand that is evident, but because it has always opted for it and it has been its core business long radius. The arrival in Recife and Fortaleza occurs at a time when we are eager to grow and we have airplanes, the Airbus A321XLR, which allow us a profitable, sustainable and long-term operation because we do not want to open seasonal routes that are later closed; It is a long-term vision, at the right time and with the right team.
What factors support this commitment to Brazil?
We have a country with growing demand. For Brazilians, Europe is a very well-positioned destination, and we saw an opportunity to reinforce this air bridge. We open routes that connect Europe with Latin America and we align ourselves with a long-term vision: to grow in footprint in Latin America and enhance our hub from Madrid. We want Madrid to be a hub of connectivity from Europe at the same level as Paris or others. Furthermore, with the expected growth – from 47 to 70 long-haul aircraft – it is natural that this capacity will be allocated to America and Latin America. However, not all the growth will be new routes; there will also be more frequencies
What doors does having a more efficient aircraft like the 321XLR open?
It has a perfect flight range and we believe there are many opportunities without diluting what we already have. Not only in Brazil, but also on the American coast, where we can do some more routes. We are going to reach eight aircraft, which was planned, and we have the possibility of adjusting frequencies and increasing destination capacity.
Are Fortaleza and Recife a thermometer to measure demand here?
Within our organization there is a team dedicated to network development that analyzes both the commercial part and profitability. The conversations are constant: new destinations are always evaluated, but it would not be prudent to say that there are commitments beyond Fortaleza and Recife. Right now we open Fortaleza, Recife, Monterrey (Mexico), Orlando (USA) and Toronto (Canada). Are new routes planned? Probably yes. But Now the focus is on opening these and making them as profitable as they need to be to consolidate them. To put it in perspective: this year we are going to close with 5.5 million seats in Latin America, a historical record. We will have four airports in Brazil and four daily flights from Buenos Aires (Argentina), something never seen before. So, while a team thinks about the future and analyzes all these destinations, the reality is that we have to take short but firm steps. As the fleet grows, new opportunities will appear.
What factors tip the balance of its westward expansion?
There is a natural factor: our main markets and the historical and cultural relationship between Spain and Iberia with Latin America. It is a complex market, but we have found a profitable, sustainable model that feeds on both sides. Then there is a commercial challenge: the difficulty of positioning the product in Asia. That said, the Tokyo route, which we recently opened, is being a very good surprise, both operationally and commercially. That encourages us to look there, although it is a more difficult market.
What challenge lies in growing at this pace on an operational level?
We will generate about 1,000 jobs a year, and mobilizing and training pilots, crew members or maintenance personnel without losing efficiency or quality, guaranteeing safety, is a great operational challenge. But we are in a beautiful moment: we have experienced people who provide quick solutions, and young people with new ideas. From a commercial point of view, the challenge is maintaining value; grow in volume without losing quality, We do not want to be the cheapest airline, but rather the one with the best value. Along these lines, having more airplanes also means using technology better. We have incorporated artificial intelligence in sales and operations: it balances aircraft loading, reduces consumption and improves profitability.
Your growth plan coincides with Aena’s largest investment program. What is your opinion of this renewal of infrastructure?
I think it is a very timely and very good coincidence. This is going to come together very well. We want to work very closely with Aena, even in the design phase, contributing our expertise and input on how to optimize the operation and customer experience.
As former interim president of TAP and chief operating officer of Iberia, what would be the natural fit if the Portuguese company finally integrates into IAG?
Iberia is not involved in any analysis or decision on this issue. Naturally there are two hubs that can complement each other, but beyond that I can’t add much because the analysis is being carried out from London.
