Ecuadorean American Aviator Working To Resurrect The Country’s Flag Airline Ecuatoreana As A Regional Carrier
Ecuatoreana de Aviación, Ecuador’s flag carrier, permanently folded its wings in 2006 after years of poor government management and a failed privatization. But while Ecuador’s other government-owned airline, TAME went into liquidation last year during the height of the Coronavirus Pandemic, one intrepid Aviation industry veteran thinks the time is right to launch a new regional, private airline in Ecuador, revitalizing the old Ecuatoreana name.
In the midst of the COVID-19 Pandemic, Los Angeles, California native Eduardo Delgado (above, right) has been hard at work laying the groundwork for an Ecuadorean regional turboprop carrier to service Ecuador’s many smaller cities beyond Guayaquil and Quito, including many hidden tourism destinations beyond the well-known Galapagos Archipelago.
Ecuatoreana’s Delgado recently connected with Finance Colombia’s Executive Editor Loren Moss to discuss his efforts to launch a brand new airline and a new operating model, but with the historic Ecuatoreana brand that holds a lot of nostalgia for many in the Andean country on Colombia’s Southern border.
Finance Colombia: So, you picked a fine time to start an airline!
Ed Delgado: Oh Yes, it’s funny you should say that because I was thinking about this a couple weeks ago, I started a new business, and I still have to laugh because I started a new business in the states in Los Angeles; we actually had a little party, we had champagne, we cut the ribbon on September 10th 2001.
Finance Colombia: Your timing is perfect.
Ed Delgado: Yes, but you know what? That was a very successful business after everything that we went through. The sadness that we went through and all the tragedy, but the business was very successful in the end, and we were good. I don’t doubt for one second, one minute that Ecuatoriana Airlines will be a success just like my other business was.
Finance Colombia: Tell me why? Why now? Why Ecuador? Tame (Transportes Aéreos Militares Ecuatorianos), I think they had an airline there before that. That had state participation it didn’t end up doing really well, We’re in the middle of a pandemic. Why Ecuador? And why right now?. Why will it be a success?
Ed Delgado: It will be a success for different factors, and a lot of factors. You know that in the Chinese (Mandarin) language the word pandemic is equivalent to opportunities and I believe 100% wholeheartedly many figures in history have also said the same: that a pandemic or a crisis should never be wasted because there are opportunities within. You know JFK (John Fitzgerald Kennedy) said it, Albert Einstein said it, you know people that have proven their vision, and it hasn’t changed, I believe that even though we’re in a pandemic, even though we’re in a crisis, I believe that there is an opportunity for an airline here in Ecuador.
We have brand new airports that are sitting empty, that have never had a flight
Why Ecuador? Well, I’m not from Ecuador, I’m from the US, I was born and raised in Los Angeles, but by having parents that are from Ecuador. They’re both from here, from Ecuador, and I’ve traveled here quite a bit. Now what we’ve seen here in Ecuador is the lack of air service throughout the years, and it’s been diminished year after year, and we’ve had to put up with not only the lack of service, but diminished customer service, which is something that we absolutely demand in the US and in other countries, that we have good customer service.
Regrettably here in Ecuador, that is something that’s taken by the wayside, so with Tame exiting the market we started this project. First of all, we started this project a few years back. Unbeknownst to us we didn’t know there was a crisis coming, a pandemic, we didn’t know that; that Tame would be exiting the market. We didn’t know that Latam and Avianca would be declaring bankruptcy, yet we kept to our values, and we kept with our vision to continue forth our plan and nowadays it makes more sense than ever when 85% of the airports in Ecuador are these airports that are serving the communities that surround them and are not being serviced whatsoever.
There’s no service at all, we and we’re talking that the government 10 years ago invested millions and millions of dollars to reconstruct and build out the infrastructure of our airports. We have brand new airports that are sitting empty, that have never had a flight that—I’ll give you a perfect example: the Latacunga Airport (Cotopaxi International Airport) was redone, reconstructed, beautiful airport with all the amenities that you can possibly imagine, it’s got two jetways, they’re installed, they invested money on brand new jetways and all the infrastructure, yet as crazy as it may sound there’s never been an aircraft that’s pulled up to one of those jetways.
Finance Colombia: Wow, now, is this some kind of government white elephant? Or why do you have an airport that doesn’t have any demand?
Ed Delgado: Well, the government set out years ago, like I said ten years ago because they wanted to stimulate the tourism, they wanted to give incentives, they wanted to make sure the airlines came to Ecuador, that the local airlines can fly. They wanted to do everything on their behalf. And for a government to step up, okay, and go ahead and redo the infrastructure at the airports, it’s because they were all in, they wanted to make this work, and so they were the first to step up to the plate and said: “OK, tell you what, we got dilapidated airports that are no condition to service the public, let’s build this now so that the airlines will feel comfortable coming,” well regrettably, it’s not like that: “if you build it they will come,” they built it and nobody came.
Tame as a national carrier at the time when all these airports were being finished and being opened up, decided, “hey you know what? I’m more interested in international destinations, in long-haul service,” and they forgot about the domestic service. They thought that it was all in the international. They put the cart before the horse because you can’t have an international operation without having your domestic operation foothold strong and operating correctly, and that’s what happened. So, today we have these airports that are standing, well maintained, ready to go, that are just sitting there empty and Ecuatoriana needs to fill that gap, there’s a niche market, and I even feel we’re calling it a niche because it’s a market that’s there, that needs to be attended to.
Finance Colombia: So, we have Guayaquil and Quito, so there’s obviously maybe a demand for a domestic link between Ecuador’s two well-known cities. So you said, you’ve got to have a domestic kind of network. I’m not an Ecuador expert, what does the network look like? Is it going to be between these two principal cities? The is potential demand obviously, between Quito and Guayaquil, but beyond that, are there other cities that are up and coming or that are important domestically, or maybe important internationally?
Is this a carrier that’s connecting Ecuador with the rest of the Americas? Or is it a focus on, like we have here in Colombia, the EasyFly, the SATENA that are really domestically focused? What’s the strategy like that way, in terms of: is it domestic first, or you’re going to run some international routes? How do you see the airline really taking off and gaining success?
Ed Delgado: That’s a brilliant question Loren. Here’s the difference. Ecuador’s has got obviously like you mentioned, Quito and Guayaquil are they are principal ports. We also have other cities that are very important in Ecuador such as Cuenca, we have got Loja, we got Manta, we got Perales, you’ve got Santa Rosa, and this is the way I described. You said you don’t know Ecuador that well, Ecuador is…I better describe this for the US population and in some countries throughout the world. If you’ve ever been to Disney World or Disneyland or any of the parks throughout the world that Disney runs, they have several little countries or seven several let’s say, worlds compacted into a small area (Disney’s EPCOT Centers). OK? That’s Ecuador.
Ecuador has a lot of demand, there’s an increase in tourism that’s coming to Ecuador and no matter what airline from the world comes to Ecuador, to Quito, regrettably their passengers are stuck.
We have jewels of tourism, that the tourist would love to see, that are incredible. Here in Ecuador not only do we have four regions, the Galapagos Islands, we have The Sierras, we have the Amazon, and we have The Coastal routes. We have some of the best beaches in the world here, OK? So, we have so much compacted into such a small little area that it’s easy to come as a tourist, to come and enjoy all the jewels that we have. Now Quito, Guayaquil, yes those are your main routes, Cuenca is very important, and like I mentioned those other cities are very important to us and the world. Now what’s been happening? Ecuador was the only country that did not shut down during the pandemic. Ecuador stayed open, OK? Peru, Colombia, Panama, Argentina closed their countries, totally closed them down to any and all visitors, and Ecuador stayed open. Many of the US carriers started to see that there was an influx of travelers coming to Ecuador and there is—I mentioned to a lot of people that in the last 10 years of me traveling to Ecuador, I have not seen more Americans, quite possibly Canadians because they’re speaking English, so I can’t determine who’s who speaking English—in and around the different cities or the different places that I go. If I go to the park, I hear people speaking, I go to the mall, I go to parks, bars, I go to restaurants, people are speaking English. It’s because people, your tourists are trying to escape from The US or Canada into these regions where it’s not as closed off to the world as it is in the states or other regions.
Now, American Airlines for example started, I think March first, three daily flights from Miami to Quito, one of them is on a Boeing 787. Even before the pandemic hit, American was only offering twice daily service. Delta Airlines is now using a 767-300 where before they used the Boeing 757. United Airlines, Yes has put a 757 daily into Quito, and they’ll have a 737-700 four times a week, so on certain days you have two flights a day on United, OK?
We’re seeing that the airports in the US are saying: hey Ecuador has a lot of demand, there’s an increase in tourism that’s coming to Ecuador and no matter what airline from the world comes to Ecuador, to Quito, regrettably their passengers are stuck. There’s no connect connectivity inside of Ecuador at all, so a passenger is coming from, let’s say, I don’t know, Amsterdam, from Madrid that needs to get to Santa Rosa, to Cuenca, to Loja, to all the cities that I mentioned previously, their option is to take a taxi to the bus station, and take a bus to your destination, and that bus is going to take you anywhere between 6-to-14-hour travel time, there are no connections inside. And that’s why it will be successful.
Finance Colombia: I’ve been on buses in Colombia back when I first started coming down here, I’ve known Colombia for almost 20 years and some of these bus trips can go beyond 18 hours. I think once I went from Barranquilla to Medellin, it was like an 18-hour bus trip.
So I’m surprised, I didn’t realize that there was no connectivity. Now, you know, you have the chicken and egg thing there because there’s bus travel, there’s bus service, but then you’ve got to operate an airline very efficiently to be able to compete price wise, and then one of the things—and I’m no airline expert—one of the things I’ve seen is that I look at the Caribbean and it has been kind of a graveyard for local airlines because…I mean my grandfather’s from the Bahamas and moved to the US like 150 years ago or whatever, but the problem is that you have destinations besides the big epicenters like Jamaica or The Dominican Republic or Puerto Rico or something like that, where the population doesn’t support bringing in…or the infrastructure doesn’t support coming in with an Airbus or a Boeing 737 or something like that.
Beyond the principal cities in Ecuador, is the route network economical? How do you plan operationally to be able to run profitably? I’m sure that there’s a lot to see there when it comes to tourism and ecotourism, obviously the Galapagos are world famous, and there’s got to be a demand there, but is the demand there? And I would imagine you’ve got to count on a certain degree of domestic traffic, you can’t really count on international traffic—or maybe you can, I’m just a journalist, I’m not an aviator.
Ed Delgado: Well, and thanks, you know what? There’s pent-up demand for air travel inside of Ecuador right now, and a study came out a few years back that the ecotourism and exotic tourism was on the rise. As a matter of fact, if I’m not misquoting, in 2016 there was a 13% increase in ecotourism and exotic tourism. It was moving upwards, that exotic tourism and ecotourism was, directly in Latin America and the African continent, OK?
They did this study specifically with Chinese travelers. Chinese love to travel, but the Chinese have started to gravitate to these other countries where their parents didn’t take them when they were younger. For example, they don’t want to go to Las Vegas, they don’t want to go New York, they don’t want to go to Paris, London, Rome, they’ve been there, done that. Now they want to go to the Patagonia down in Argentina, maybe they want to go to Easter Island, maybe they want to go to the Galapagos Islands. There’s that pent-up demand, we’re talking about pre-COVID. Now with COVID in our daily lives, what’s happening now is that since in the US and Europe and all that, everybody’s been stuck at home, and they want to get out, and they’re looking for places in the world that they can do tourism that’s outdoors,
It’s not with large amounts of crowds of people like we see in London and in Paris and Rome where there are a large amount of people trying to visit one location that’s very tourism driven. So what are they doing? They’re picking Galapagos…You know our ships in Galapagos right now, our cruise ships are only at 50% capacity, not because they want to; it’s because that’s what they they’re operating at: 50%. So everybody feels comfortable onboard and where the catamarans were used to be, you know they have a capacity of 30-32 passengers, they’re at 16 because the tour operators want to give that feeling of security to their passengers, and it’s working.
Now like I mentioned, there is that pent-up demand, not only on the corporate side—the business side here in Ecuador, but the tourism side and local tourism, like I mentioned previously. You know, you had Air Canada and Air France, Gol, AeroMexico, Avianca, Delta, American, United, Jet Blue, Spirit, they all come into Quito, and I’m missing a couple. Eastern is also going to be starting routes in Quito. Hey that’s fabulous, I promote that. But you know what? The thousands of passengers that are arriving on all these airlines, they don’t have that option to be able to connect to the other cities. It’s like an example: if you had all these airlines flying into New York, a massive amount of people coming into New York, and you told that passenger coming in from London: “hey guess what, you want to go to Pittsburgh? You’ve got to go down to the local bus station. You want to go to Chicago? Bus station! It’s exactly what’s happening here, there’s no connection to the outlying cities and that’s where it’s going to thrive, that’s what we’re going to do.
We’re going to do code-share agreements, alliances or direct agreements with these airlines such as KLM, a Delta, American, like the ones I just mentioned so that we can transport their passengers to their final destination. So if somebody gets ticketed in Amsterdam they’re going to be holding a ticket that’s going to allow them to get on the airplane, but their final destination on their ticket stub is going to say Esmeraldas, it’s going to say Santa Rosa because it’s a code share agreement with KLM. And that’s something that doesn’t exist.
Finance Colombia: Operationally how close are you to launch? What does your fleet look like? What does your initial route map look like?
Ed Delgado: So we’ve chosen the De Havilland Q400 as our aircraft of choice. It’s a 78 passenger turboprop aircraft. It’s what’s needed due to cost inside of Ecuador. Our longest route point to point is 55 minutes, maybe an hour. Our average route is about 45 minutes, 40 to 45 minutes.
The Q200 which is a 37 passenger aircraft, will be used on our thinner routes, the routes that need to be matured, let’s say, that haven’t had service in years. When we introduce that air travel to the local economy and get people to fly us to Quito or Guayaquil, the Q400 will be used mainly on our routes that are already mature, such as the Quito to Guayaquil, Quito to Cuenca, the Galapagos Islands. We will be able to service the Galapagos Islands from three different cities in Ecuador, meaning from Quito non-stop to Galapagos, from Cuenca, the first time that’s ever been done to Galapagos, and Guayaquil to Galapagos, and offering fares that are within reach of everybody that wants to travel right now. You know there were fares on Avianca and Latam upwards of $600-$700 round trip from the continent to the islands and back. And we’re talking, that’s an hour and a half trip! You know in the states or other regions in the world, if you say for an hour and a half trip, round trip, I’m going to pay $700, that’s a little outrageous! But that’s what the airlines were charging here. With us, you’ll be able to fly there at more economical rates and we’ll be able to offer our flights to everybody, it’s within reach of everybody.
Finance Colombia: When are you going to be flying, when will tickets go on sale? When is your fleet going to be delivered? How far along are you in the process? I mean, if you look at the point of where one person has an idea and they go, “I’m going to launch an airline” to, “I’m flying routes,” where are you in that continuum?
Ed Delgado: Well, you know what we started this two and a half years ago with some very keen advisors in Europe and in the UK, some really good advisors, and also down in Santa Monica, California, aviation advisors that have thousands of years of experience. Right now Ecuatoriana is in the AOC (Operating Certificate) process, we are in the certification phase. You know due to Covid, we had to delay it a little bit, we had to make sure our timing was just right. We have this new variant of the disease that’s coming out at the same time we do have the vaccine that’s coming up.
We start operations hopefully sometime in July or very early August.
It helps us, we anticipate having our AOC sometime in June, and we start operations hopefully sometime in July or very early August. Our ticket sales should start live sometime in May once we know within reach of that AOC because obviously we don’t want to do something that we we’re not prepared for. We want to be cognizant of that so we’re going to start our sales in probably May.
The law in Ecuador states that you cannot start sales within 30 days of receiving your AOC, which is something that we have to be aware of, so we can’t do like other airlines do. You’re starting to sell tickets six months out, three months out, we’re restricted to 30 days, but by the same token what we’re doing as a team in Ecuatoriana is we’re visiting all of our local municipalities, our local governments throughout Ecuador, we’re visiting every two weeks, we’re in a new city letting them know: “Hey we’re coming be prepared, we’re going to service your city!”
Finance Colombia: Great, so the planes are ordered, are they being manufactured? You’re going to get them used? You’re going to lease them? What can you tell me about that? We’ve got to talk a little bit about the financial side of things because airlines are a fascinating business to me, because they are financial companies that tend to operate aircraft.
Ed Delgado: And lose money! Of course, the old adage: “how do you become a millionaire in the airline business? You start off as a billionaire! “No our aircraft are being leased. We have a great relationship with De Havilland in Toronto. They’re advising us on the different aircraft models and types and what not; we’re working with our lessor. We don’t want to make the mistake that many airlines made. I was told this today because, we’re starting our certification, yet we don’t have an aircraft on the ground and in our on property let’s say. Why? I don’t want to have an aircraft, when I’m still five months from getting my certification because I’m paying lease rates every single month which is draining our bank accounts. So we have to be very careful on when we actually take delivery, yesterday I spoke with the (authorities) and I said: “when do I need to actually have the aircraft on property before our phase four of our AOC process?” And what they told me goes: “Ed, if you’re here three days maybe a week before fantastic! It’s what you need, don’t bring in any time sooner, you don’t need it.”
Great, so I can tell the lessor “hey you know lessor, I want my lease to start on such and such date because I know that I’m going to enter the final phase of our certification, our performance, our flights,” and then we can start operating two weeks later or what not, three weeks later. We’ve chosen like I said, the Q200 which is available. We’re going to have to modify it somewhat. The Q400 doesn’t come with the oxygen system from the factory, we’re going to have that installed and that will also be coming forth. We’re looking for the new gen Q400s with a fantastic interior that, when you climb onboard you really don’t know whether you’re in a turboprop or you’re in a Boeing or an Airbus.
Finance Colombia: So, right now the focus then it sounds like, is a purely domestic operation and maybe you’ll do codeshares and different partnerships with international carriers, but you’re really focused on a short haul except for the Galapagos, of course. But you’re really focused on a short haul domestic network and that seems to be your business strategy, right?
Ed Delgado: Yes, that’s right. Remember this airline structure is coming in five different phases, so our first phase is the domestic. We have to make sure that our hub and spoke system inside of a country such as Ecuador is functioning well, a well-oiled machine. We’ll introduce Galapagos in our phase 1.2. Let’s say we’ll start our Galapagos operations and at the same time we’re going to introduce our trans-border flights. Very unique to this region is the trans-border flights, meaning I can fly as a domestic airline and almost like a domestic destination into certain cities that are considered trans-border cities. from within Ecuador to these trans-border cities in Colombia and in Ecuador. We’re talking cities that have a population of 600.000 and about a million surrounding this particular city that doesn’t have air service, and we’re going to jump in there, and we’re going to offer these trans-border flights.
I’ll give you an example: Tame was very successful on a trans-border flight that went from Quito to Esmeraldas inside of Ecuador, and Esmeraldas to Cali, Colombia. Incredibly lucrative, well done city pairs that were they were fantastic not only for time or for the end user, the customer. And Cali no longer had a transition through Bogota because just like in the states, everything goes through major hubs. They can go directly into Esmeraldas, which is a beautiful coastal city here in Ecuador; beaches and resorts, or they can continue on to Quito and then connect to other parts of the region…or the world. They don’t have to particularly go through Bogota.
Finance Colombia: That’s interesting because I was talking recently with people in the government, in Nariño, which is there on the border with Ecuador: Ipiales and Pastó and Tumaco and they have the San Luis airport there in Ipiales and Nariño, and they were very keen on promoting their cross-border trade with Ecuador.
I think one of the good things about Ecuador…but then sometimes it hurts Ecuador, is Ecuador has a dollarized economy and while that helps as it kind of takes away some of the chicanery that the government can do, central bankers can do there, but it also puts Ecuador to a slight disadvantage with Colombia as far as cost. But then, you know they’re trying to promote free zones and cross-border trade and things like that, and that’s one of the strategic objectives of the Nariño government, to really boost Ipiales and Pasto as destinations for cross-border business with Ecuador.
What can you tell me about yourself and your own background? Do you come from the aviation business? If I’m not mistaken, you’re from the US, but you’ve got an Ecuadorian heritage. Tell me about a little bit about yourself, and what you can tell me about the investors or the backers? Who is the team behind this new airline?
Ed Delgado: I was born in Los Angeles, grew up, and did all my everything in Los Angeles. Got married there and I’m divorced, but was married to a beautiful Ecuadorian woman who, we’re still very good friends. My family is from Ecuador. My background is in aviation. I started in Delta Airlines in 1990, and so that you that—Jesus! 31 years ago—I’ve been in aviation, jumped from Delta Airlines, I went to Continental airlines, I went into their in-flight department, and I was a flight attendant…and I’m very proud to say that I was a flight attendant. I flew transatlantic routes, I dabbled a little bit trying to become a pilot and got my private pilot’s license, but I really didn’t think that was a place for me, being in the cockpit.
I respect our pilots very much, they have hard work to do, and I respect them very much, but I decided not to go into that region. I went into inflight. From inflight, I went into corporate security. I had a law enforcement background at the beginning, so I went into corporate security, I went into management…went into management of Inflight, returned to inflight, but I was in management and have been involved in the airline business ever since.
The Ecuatoriana Airlines name is very potent, it’s got a lot of goodwill behind it, and a lot of interest. And people all over the world are excited to see Ecuatoriana Airlines come back. The Ecuadorian population is excited to see their flag carrier once and for all a privately held airline come.
I left Continental in 2005. I’ve advised as a consultant, airlines here in the Latin America region, and then worked in the transportation sector. Ground transportation sector, logistics with a company that I created. A company that owned buses and the vans, and we did a lot of ground transportation which, you know, maybe there are many similarities between the ground transportation such as a limousine company and an airline: you’re transporting passengers from point a to point b, and there’s lots to do on the back end of that.
So, I’ve got a lot of experience there, and from there, two years ago, like I said, I went into Ecuatoriana Airlines. I had purchased the name several years back, and since our launch, our beginnings back on August 31st, the airline has had a tremendous amount of interest, not here locally in Ecuador, but throughout the world.
The Ecuatoriana Airlines name is very potent, it’s got a lot of goodwill behind it, and a lot of interest. And people all over the world are excited to see Ecuatoriana Airlines come back. The Ecuadorian population is excited to see their flag carrier once and for all a privately held airline come.
About our investors, right now I’m the only one that’s currently behind the project, I’ve used my capital to get us to where we’re at. We are very close to launching several different products to get investors, we will be holding road trips here pretty soon, we wanted to hold off to get investors in the airline because we wanted to make it tangible, more tangible than it was back in September when it was just an idea and something on paper.
Now we’re in the. certification phase, now we have a lot of attention and now it’s more viable. It’s a more viable project that can be seen. We’ve signed on with KPMG, a worldwide company. They’re actually redoing our business plan and finalizing it, they’re redoing our financials, and they’re doing all the projections necessary for that investor. So with KPMG and with what we have, we’re going to go out and seek investors for our long-term commitment.
Short term, we’ve had a lot of interest from the local Ecuadorian citizens saying “hey I’m in love with the Ecuatoriana, I remember Ecuatoriana when my parents took me to Miami for the first time, we flew in Ecuatoriana, and I’m excited to see you guys coming back!” I see the airline coming back even though we’re not the same they’re excited, so they’ve asked us: “How can I partake? How can I be a part of Ecuatoriana? How can I be part of the history that’s being reborn?
So we’re going to be launching our Club de Fundadores, which is the Founders Club to everybody in the region, anybody who wants to join. There are four different levels to join Ecuatoriana and with that you get a tremendous number of benefits, so you become a founding member of Ecuatoriana.
You put a certain amount in and with that it’s almost like a, it’s a crowdfunding event. There are only going to be 10.000 memberships that are going to be given out, you get your personal card with your name on it. It’ll say the number of a membership that you’re in, you know you can be number one like you can be number 999, or 9,999, so we’re only going to allow 10.000 members and with each membership with each new level you’re going to have a tremendous amount of benefits that are going to be afforded to you: free flights, free VIP passes, you’re going to be the first to board on the aircraft even before our elite members on our frequent flyer program, and you’ll become part of it. Your name will forever be part as the founding members of the Ecuatoriana as long as the airline is in existence, for hundreds of years let’s say. Hopefully, you’ll be part of it, your name will always be there to say you were a founding member of Ecuatoriana airlines.
Finance Colombia: Yes, I was reading about that on your website. Now speaking about that passenger experience, a couple questions: One I neglected to ask you earlier, your operating model is it going to be like a low low-cost carrier? Is it going to be like a full-service carrier? And all that kind of feeds back into the reason that you and I made acquaintance was because you had very shabby treatment by Avianca. In airlines, Delta, Continental at one point tried to be both a traditional carrier and a low-cost carrier but you can’t do both. You can be Emirates, you can be Spirit, but you can’t be both. So is your operating model, the low-cost model is it a traditional model?
Ed Delgado: You’re absolutely correct. These legacy carriers in the US, each one of them believe it or not, each one of them, I think with the exception of American Airlines if I’m not mistaken, tried to do that model where they were trying to do two things at the same time. You had United that created Ted—remember Ted, that Airline within the Airline? Each one of those models failed because the user has a certain experience that they want to have when they board. At United, at Delta or at Continental, back in the day they have a certain expectation, and when you give them this lite or this watered-down version, they’re like “whoa I don’t like that!”
In Ecuatoriana we’re going to be, we’re going to be this, I’m going to be very upfront Loren, we have to be a hybrid of an airline. We’re the flag carrier of a very proud country, and we have to stay within those parameters of being a flag carrier of a country and act accordingly. However, hybrid internally, we will be a low-cost carrier. Why? Because we have to really make sure that we adjust our cost to reality and not charge our customers for something that isn’t really necessary, but at the same time we have to be a hybrid between a legacy carrier and a (low cost) carrier internally.
We are going to offer onboard service, there’s no reason why on a 45-minute flight there’s no service onboard. Currently here in Ecuador the airlines, the two that are functioning: Latam and Avianca will go from Quito to Guayaquil, which is a 35-minute wheels up to wheels down, and you will not see the flight attendants in the aisle whatsoever. In years past, they used to give you a sandwich and a drink then, they then it went down to a drink, then it went down to just candy, then it went down to: “we’re gonna offer you water” down to nothing. And you know what? Regrettably the Ecuadorian citizen has got to put up with that because they’re saying: “there’s no other way I can travel, I got to put up with this there’s no service on board, and now my expectations is I’m not going to get anything!”
But Ecuatoriana is going to be very different, we’re going to offer services onboard, on our 6 am flights at a different destination, we’re going to offer you coffee which is the minimal. I would say this Loren, if I invite you to my house, I say “Loren come over to my house, we sit down in my living room,” the very minimum is I’m going to say: “hey Loren can I get you a cup of coffee? can I get you some water? can I get you a soft drink? can I get you something that maybe we could pick at while we’re having a meeting,” and that’s what I want the Ecuadorian citizens or the passengers that fly aboard Ecuatoriana, I want them to feel the warmth of you being in my house sitting down.
I’m going to offer you at the minimum a cup of coffee and something to eat, especially on a 6am flight because we’re rushing to have meetings, and you rush out of the house and you’re trying to get to the airport on time, you’re going to be boarding, I’m going to offer you a cup of coffee, something to eat; the minimum, I can do. And that’s my promise to the passengers on my aircraft and that’s going to cost me on average 27 cents, maybe 35 cents per passenger over 76 passengers. I’m OK with that. It’s that feeling that you’re going to take away, that you’re going to come back time and time again.
Finance Colombia: You’ve got a tremendous task ahead of you. You’ve been very generous with your time, launching an airline is, I think probably one of the hardest businesses to do. It’s a highly regulated business, it’s a capital-intensive business, it is a business where you have to manage safety and operational issues, but at the same time it has a very—it’s like banking in a way. It’s financial, you’ve got to deal with investors, you’ve got to raise money, you’ve got to manage money, you’ve got to look at things like interest rates, fuel prices and futures, hedging and things like that. I can’t think of a harder business to go into, so my respects to you. You’ve been very generous with your time I appreciate it.
Ed Delgado: Thank you.