LatinPass: From "a Bunch of Bananas" to Respected Partners of American Airlines
Problem: Aggressive US carriers (American, United, Continental) enter Latin American markets, promote their loyalty programs and "steal" the most frequent Latin America-based business travelers, those individuals paying the highest yields and representing Latin carrriers' largest and most predictable revenue sources.
Strengths: US airlines dominate gateway service, but Latin American airlines offer 92% of US-Latin America and intra-Latin America service combined.
Weaknesses: Latin American carriers' intra-regional service dominance is largely unknown, and most offer no interior US service behind the traditional Miami gateway. In addition, Latin American airlines have a serious consumer image deficit. One Latin American carrier CEO termed the carriers' image "a bunch of bananas".
Opportunity: "Offer a competing FT Program", sure, but how can more than a dozen "bananas" compete with decade-old, heavily-promoted AAdvantage, MileagePlus and OnePass?
Solution: Select R.W. Mann & Company to strategize, design, implement and merchandise "LatinPass".
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In May 1993, at a Cartagena, Columbia conference, Latin American airline CEOs met to discuss the problem of US carrier aggression and their resulting loss of revenue share. In November 1993, R.W. Mann & Company's Bob Mann, Inside Flyer's Randy Petersen and others presented to the carriers a feasibility study for a multi-carrier frequent traveler (FT) program by which to compete with the growing threat of American, United and Continental.
In early 1994, six Latin American carrier investors formed "LatinPass Corporation" with the purpose of developing and operating a "world class" FT program and "settlement bank" for the partner-carriers. During 1994, R.W. Mann & Company, working at the request of Aviation Management Services, developed the business plan for what became twelve Latin airline partners, contracted for software development, pitched and closed paid participation agreements with Hertz, Avis, Hilton, InterContinental, American Express, Mastercard, Diners Club and AT&T, selected and implemented a US carrier tie-in with USAir (now USAirways), offered the program as the "host" of several new FT programs in the region and implemented a Miami-based Service Center. LatinPass launched in January 1995.
Speaking at the 1996 Annual Latin American Airline CEO Conference, according to the Latin American carrier CEOs who partner and operate the program, "LatinPass is the single most successful marketing program [their carriers have] ever engaged in". The program has recaptured Latin-based business traveler revenue and created new US-based revenue contributing many times the program's total cost, in its first year. The program's success was reinforced by the recent announcement that for the first time ever, LatinPass would receive the benefit of $4-5 million in US-based advertising.
Perhaps most telling of all, in 1996, American Airlines' strategists confirmed the value and impact of LatinPass in proposing to honor the program in in an equal partnership with their own, innovative and industry-leading AAdvantage program, on more than 200 weekly American and TACA Group carrier (TACA, LACSA, AVIATECA, COPA, SAHSA) code-share services from the US to and beyond the TACA Group carrier gateways.
From "a bunch of bananas" to respected international partners, R.W. Mann & Company was pleased to assist in updating Latin American carriers' image and competitiveness. What can we do for you?