How has the pandemic affected your business?
Jessica: AirLink has a diversified portfolio of services that includes air ambulance services, aircraft administration, cargo, executive flights and aircraft maintenance services, all of which were impacted by the pandemic in some way. When borders began to close around the world, there was a short-lived increase in demand for executive and ambulance flights as people wanted to return home as fast as possible. Once these tourists / government officials had been repatriated, combined with a
screeching halt in international tourism, there was a sharp decrease in all flight requests for about two to three weeks. Then, as the pandemic spread, the need for transporting Covid patients has become considerable, and increased over time, until now.
Sergio: “We also experienced a reduction in flight requests from our frequent clients. We are lucky that we have diversified our clientele: we are also a provider to other organizations that don’t depend on tourism, such as the United Nations. Furthermore, we are ready to transport patients with Covid-19. We also actively participated in relief efforts in the Dominican Republic. Another significant point is flight operations and how they have changed, especially when doing long intercontinental flights. Nothing is considered routine anymore; every flight is now dealt with on a caseby-case basis, on which we work with the entire operations team. Every country confronts the pandemic in a different way, and every country is also at a different
stage. This translates into a diverse set of requirements and an increased level of bureaucracy. We experience longer waiting times and more requirements when it comes to securing permits, especially during long intercontinental flights.
Did you have to adapt your business, and how did you do that?
Sergio: Yes, we had to adapt in many ways. Our main focus has been the safety and wellbeing of our team members and the patients we transport. Since March, everyone that can possibly work from home has been equipped and enabled to do so. For the flight crew, maintenance and operations teams, we established a rotation schedule to minimize the number of people at the hangar, enabling social distancing and limiting the risk of cross contamination. From a sociological point of view, the crisis forced us all to change our day-to-day professional and personal life: team dynamics changed, and teams need to be innovative and flexible in the way they collaborate with each other. This has not only required a shift in the way we work together, but also in the way leaders manage their teams. I believe it is very important to listen carefully and support colleagues when needed.
Jessica: That is so true. Team dynamics changed from many face-to-face meetings to online committees, groups and talks. Although it has become the new normal, we did have to adapt, especially in the beginning. Additional to that, we have made considerable adaptations to our business on both the revenue and cost sides in planning for the immediate, and potentially long-term, effects of the pandemic in our industry and region. Our first efforts were to offer the transport of Covid-19 patients by air ambulance.
We took the time to thoroughly research, consult experts, equip our aircraft, and train our teams to ensure we proceeded to launch this service safely.
During July and August, we got more quote requests for transporting Covid-19 patients than for any other type of flight
During July and August, we got more quote requests for transporting Covid-19 patients than for any other type of flight. We expanded our air ambulance service to include helicopter transports within the two largest cities in Mexico. As hospitals reach capacity, we offer a way of distributing patients among them and to hospitals in nearby cities. We have also diversified our services by leveraging our medical expertise.
We offer home and telemedical consults to our clients, their members, and the public. In addition, we have partnered with a certified German lab with services in Mexico to provide at-home / office Covid-19 PRC testing to corporations and the community in Guadalajara. To launch these new services, we followed a deliberate business development process. We held internal strategy sessions and discussed the likely needs the pandemic would generate. On the cost side, we re-negotiated new rates and contracts with our most frequent providers, and amended our purchasing processes to include additional controls. We modified our organization structure to better match our current service offering and demand projections. We are confident we have made the changes needed to continue providing safe, reliable services to our clients in the long run, regardless of an extended economic crisis in our region.”
What effects did the pandemic have on Mexico/Dominican Republic?
Jessica: The effects of the pandemic have hit Mexico hard. The historic challenges we face as a country have been sharply highlighted during the pandemic. Most Mexicans live hand-to-mouth. They must choose between earning a day’s wages to buy food or face the risk of infection, making it economically unfeasible to completely quarantine for most households, and exceedingly difficult for the government to fully enforce strict lockdowns.
Sergio: The short- and long-term effects have hit the Dominican Republic hard. Covid-19 seems to be a magnifier of existing structural problems in LATAM. Also, tourism is one of the three main sources of income for the Dominican Republic.
Jessica: Yes, corona is a magnifier of already existing problems. With a GDP growth rate of -0.1 per cent in 2019, the Mexican economy was not in an ideal position when the pandemic began. The worldwide economic slowdown also drastically reduced crude oil prices, which has made it even more problematic for the government to fund an adequate response. Mexico’s private sector is prepping for a hopeful resurgence of tourism by the end of the year.
Sergio: The effects of Covid could be divided into political, economic and social inequality problems. If you look at politics, you could very broadly divide countries in Latin America into two categories: the first being countries in which their leaders actively downsized or even tried to ignore the virus; and second, countries where leaders implemented strict measures and lockdowns. Countries that belong to the first group include Brazil, Mexico and Nicaragua.
The consequences are directly visible, as those three countries have a huge amount of deaths reported
The consequences are directly visible, as those three countries have a huge amount of deaths reported. In the news, you see that these countries have received a lot of criticism: that their approach has been too black and white, choosing between the economy and a lockdown. The countries in the second group, for example, Peru, Panama, Paraguay and Colombia, imposed very strict lockdowns. The problem in these countries, however, has been how to control these lockdowns and also, how to manage this financially. Which brings me to the second point: the economy.
As Jessica already mentioned, a large amount of people in LATAM live hand-tomouth. People earn money today to eat tomorrow. Many people can simply not afford to go into lockdown for a longer period of time. And, overall, many countries in LATAM simply do not have the funds to take the financial hit of the pandemic. The third point I mentioned is social inequality. In LATAM, there is a huge difference between the rich and the poor. This large gap is sharply accentuated by Covid. There is a large urbanization in LATAM, which means big cities with large amounts of people. The rich people are likely to have more space and can afford health insurance. The poor, however, are generally living very close to each other, and clean water in certain areas is not always nearby. Structural problems make LATAM extra fragile and the overall consequences are large.
Has the pandemic affected LATAM air ambulance industry differently from what we’ve seen in Europe?
Sergio: I believe that we cannot talk about the LATAM industry without taking into account the broader situation in Latin America. Most of our clients are tourism based, and in order to do air ambulance flights as we did before, tourism and (business) travelling need to re-start. The painful truth is that many people in LATAM cannot afford to stay at home or isolate from others, which gives the virus the space to keep reproducing and infecting more and more people.
Economies are fragile and governments are struggling to handle the response to the virus
Jessica: Economies are fragile and governments are struggling to handle the response to the virus to minimize infections but keep their economies moving. There is little to no funding or subsidies from the government for air ambulance flights to transport patients to better care facilities. The result is a more significant overall reduction in air ambulance flights in LATAM than in Europe, for example. However, Latin America is much larger than Europe, with half as many countries. Flights between countries in LATAM or across the Americas are, on average, several hours longer than those within Europe. In addition, there are far fewer professional air ambulance providers. These two regional phenomena continue to provide an interesting market and opportunity for the best positioned air medical providers.
How do AirLink and Helidosa see the future of the air ambulance industry on the short and long term?
Jessica: LATAM has many small informal air ambulance providers that will be whipped out before the pandemic is over. There will likely be a consolidation through mergers and acquisitions, as poorly performing companies with decent assets in aircraft will be absorbed by companies in a stronger financial position. There will probably be stronger collaboration among friendly competition, which will most likely evolve into formal alliances and shared resources.
Sergio: I agree. I also believe that we will see a reduction in operators. In the short-term, operators will need to struggle through this by diversifying clients, enabling collaboration, reducing costs, being cash flow efficient, etc. We are faced with a world-changing event that will set a new normal: new travel patterns and new ways of working. I also think that transporting patients with infectious diseases will become more and more common.
What lessons have you learned from the situation, and will there be lasting changes as a result?
Jessica: The lessons we have learned during this situation are probably universal and relatable to anyone in the industry. Acting quickly to capture efficiencies in processes, procedures, administration and/ or operations within the first few weeks of the pandemic was critical.
Sergio: I totally agree. Also, we have found the opportunity to come closer to our clients and partners while navigating these new and challenging times. We have been working closer together to provide extraordinary solutions to the difficult logistical and clinical needs of our patients. HELIDOSA and AirLink, for example, have had the opportunity to collaborate and have mutually benefited from that collaboration. Together we are stronger, by sharing knowledge and resources. Collaboration, sharing and working together would be my insights.
Collaborating amongst operators has been incredibly helpful.
Jessica: Absolutely. Collaborating amongst operators has been incredibly helpful. What we also have learned is an openness to service diversification without losing a razor focus on our company strengths and effective results. The fact that shifting towards home offices, virtual meetings and social distancing habits has not affected our performance and, in some ways, has enhanced it, has been an impactful lesson. This adapted way of working will continue even after a vaccine for Covid-19 exists.