Struggling Avianca To Lose CEO

Colombian airline, Avianca, has faced some financial difficulties. After three years as CEO, Hernan Rincon will be departing the airline next week. As Avianca turns to a new page in their operations, they will have to face some of Hernan Rincon’s ongoing projects and keep Avianca profitable.

Avianca will be losing their CEO amidst difficult times. Photo: Oliver Holzbauer/Wikimedia

Hernan Rincon

Hernan Rincon joined Avianca three years ago in April of 2016. Under him, Avianca has grown in many different spheres. Avianca introduced Carla, a Facebook bot designed to help travelers, as well as a redesign of Avianca’s digital sphere, app improvements, and the introduction of internet connectivity on Avianca planes. His main focus has been on improving the customer experience. Avianca has taken delivery of new planes, including 787 Dreamliners since 2016 and aimed to retire older aircraft.

Hernan Rincon has been CEO of Avianca for the last three years. Photo: Star Alliance

On the global side of things, Hernan Rincon focused on building up Avianca’s hub in Bogota, forging Avianca’s joint venture with Copa and United, and promoting operational excellence. Airbus even bestowed upon Avianca an award for having the best operational performance of A320 aircraft in North and South America.

Even with his successes, Hernan Rincon has seen a few struggles. Most notably, he faced a few crew issues including cabin crew scheduling errors and a strike. Avianca also has to face new challenges from subsidiaries throughout Latin America. The most famous of which is Avianca Brazil.

Avianca Brazil

Avianca Brazil, formerly known as OceanAir, started off as a small carrier with feeder operations in Brazil. To more closely align OceanAir with Avianca, OceanAir was rebranded as Avianca Brazil. However, Avianca Brazil’s livery was nearly identical to Avianca’s livery and there was little to distinguish Avianca and Avianca Brazil.

Avianca Brazil then began to expand with international flights and increased domestic operations. They took on A330 aircraft, more A320 family aircraft, and leased some new A320neo aircraft. Avianca Brazil grew to become Brazil’s fourth largest airline.

Amid all this expansion, however, debt started to accumulate and the airline faced financial difficulties. In December 2018, Avianca Brazil filed for bankruptcy. And, throughout 2019, Avianca Brazil has seen their fleet size deplete. Now, only about seven aircraft are still in operation with Avianca Brazil.

Avianca Brazil is hard to distinguish from Avianca. Photo: Rafael Luiz Canossa/Wikimedia

Avianca’s finances

Avianca itself has seen some financial difficulties. With higher fuel costs, lower travel demand to South America, and development costs as Avianca strives to improve their products and online offerings, they saw their profits fall. Avianca took some steps to correct this by reducing their order book and focusing on profitable routes. Ultimately, 2019 will show if these methods help Avianca’s books.

Avianca’s hoping 2019 will bring better financial results. Photo: Boeing

Overall

Avianca announced that Hernan Rincon will be pursuing other opportunities after departing from Avianca. Hernan Rincon has experience with other large corporations. It will be interesting to see what he will do in the future. For example, some former airline executives have gone on to propose plans for a new airline.

Have you noticed any of Hernan Rincon’s work with Avianca? Do you like Avianca? Let us know in the comments!

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