An Example of Good Practice in Low-cost Airlining.
Azul
- Low-cost Brazilian airline established by serial aviation entrepreneur David Neeleman
- Established: 2008
- HQ: Sao Paulo, Brazil
- Revenue: $2bn (£1.24bn)
- Number of employees: 9,000
- Fact: 17 million people flew with Azul last year across Brazil
Achievements
- $30 million stake investment from Investment firm TPG.
- Record- breaking 2.2 million customers in its first year.
- AZUL AIRLINES is named as the Best Low-Cost Airline in South America at the 2012 World Airline Awards.
- Garnering 14.5% of Brazil’s airline market in the space of 4 years.
‘Design Champion’ - David
Neeleman (Age 50 in 2010)
Previous Experience: Morris Air, JetBlue
Airways (JBLU).
Mission: Providing air travel to the masses.
Challenges: Taxes, Infrastructure, Public’s
attachment to bus travel.
Customer Focused Service
·
Low Flight Fares
‘Tickets, if purchased in advance, run about the same as a
bus trip. Traveling from São Paulo to Salvador by bus, for example, costs about
$150 each way and takes 23 hours; on Azul, the lowest one-way fare is just over
$100. Cristina Maisonnette of Rio de Janeiro had been planning to drive to
Natal, a coastal town, before opting to fly. "I hope they survive,"
she says of Azul. "I want to be able to fly more often."
·
Founding and
implementing of ‘Open Skies’.
The online
check-in and reservation system which was eventually acquired by HP. The system has been employed by several airlines
including RyanAir.
·
Free Taxi services for
customers to catch flight at airport.
“ Complementary transportation is all the more crucial
because Azul, like Southwest and Ryanair, flies nonstop between secondary
airports. Its main hub is Viracopos/Campinas International Airport in Campinas,
an attractive and well-run city about 50 miles north of São Paulo. Campinas has
about 2.6 million people, and some 30 million live within a 120-mile radius.
Azul offers bus service from pickup points in seven cities, with about 50 bus
trips a day”
·
The ‘Little Things’
‘Azul offers online booking, automatic check-in, sleek plane
interiors, and chatty flight attendants who carry baskets of snacks, telling
customers to take as much as they want. Neeleman says Azul's reservations staff
often take longer on the phone than at JetBlue because "they're explaining
that there's a bathroom on board and a light above the seat."
Unlike most other
low- cost airlines, Azul evidently goes the extra mile to provide the
proverbial little things that go a long way. As mentioned in a previous post by
one of my colleagues the service provided among the low-cost carriers are often
all too similar and sometimes customers ultimately make their final decisions
based on fine details such as provision of extra snacks or that little more leg room.
- For typical customer reviews see ..http://www.airlinequality.com/Forum/azul.htm
To the Future
Commentators purport the safe route
for Neeleman’s Azul would be to keep it growing within a sustainable berth – ‘Like JetBlue in its early days, Azul now
has the benefit of a brand-new fleet of planes and a young staff, which means
low maintenance costs and cheap labor. Profit margins could come under pressure
as costs rise over time and as competitors come in with lower fares to steal
business. Even before the ice storm, JetBlue's profitability had been eroding
for those very reasons.’
According to the CEO of Brazil’s
largest airline – Tam, the projected
level of flying in 2027 Brazil will be on par with the rate of 1970s USA.
Currently, the US air travellers fly eight times more than their Brazilian
counterparts. Azul intend to
address this by honing in Brazil’s rising middle-class. – These make up just over 50 per cent of
households in Brazil bringing in about $600 to just over $2560 per month.
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