New directions for the airline industry - PowerPoint PPT Presentation

New directions for the airline industry l.jpg
Download
1 / 13

New directions for the airline industry. Robert Kuijpers Former Executive Chairman of SN Brussels Airlines. Background to Airline industry. Not all doom & gloom In Europe: +/- 11 million seats per week 25% are no-frills Load factors: Europe 65% USA 85% Asia 80%

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

New directions for the airline industry

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


New directions for the airline industry l.jpg

New directions for the airline industry

Robert Kuijpers

Former Executive Chairman of SN Brussels Airlines


Background to airline industry l.jpg

Background to Airline industry

  • Not all doom & gloom

  • In Europe:

    • +/- 11 million seats per week

    • 25% are no-frills

  • Load factors:

    • Europe 65%

    • USA 85%

    • Asia 80%

  • 8 million passengers per week

  • Underlying growth of traditional carriers: 4%


The international market l.jpg

The international market

Four types of players:

  • Mega Network

  • Network

  • Non-Network

  • Pure Leisure Non-Network


Mega network carriers l.jpg

Mega Network Carriers

  • Large domestic market

  • Intercontinental flights

  • Interlining/code sharing

  • Alliance member

  • Many primary/secondary feeder markets

  • Multi-class product

  • Complex revenue management system (costly)


Network carriers l.jpg

Network carriers

  • Non-existing/small domestic market

  • Niche intercontinental flights

  • Interlining/code sharing

  • Most carriers join an alliance

  • Some feeding

  • Multi-class product

  • Complex revenue management system


Non network carriers l.jpg

Non-Network carriers

  • Some domestic

  • Simple revenue management system

  • Point-to-point

  • Ancillary revenue is critical

  • Aggressive pricing/cost focus

  • Primary airports (except Ryanair)


Pure leisure non network carriers l.jpg

Pure Leisure Non-Network carriers

  • Some intercontinental

  • Simple revenue management system

  • Point-to-point

  • Set-only product

  • Aggressive pricing/cost focus

  • Primary airports


Challenges 1 l.jpg

Challenges (1)

  • European margin: 0,6% first profit in 6 years (carriers with long haul)

  • Decline in premium passengers in Europe: +/- 13%


Challenges 2 no frill airlines l.jpg

Challenges (2)No Frill airlines

Point-to-point:

  • Exclusive traditional carriers:

    1850 connections

  • Exclusive No-frill carriers:

    700 connections

  • In direct competition: 300 connections

    Example: BRU-BCN -60.000

    CRL-GRO +150.000


Challenges 4 l.jpg

Challenges (4)

Middle East carriers:

  • Emirates: 74+93 (45 A380)

  • Quatar: 23+25 (2 A380)

  • Ethiad: 8+31 (4 A380)


Everyone makes money except airlines l.jpg

Everyone makes money EXCEPT airlines!

Return on Capital Employed:


Conclusions l.jpg

Conclusions

  • The aviation industry is segmenting, regional centres are being served point to point

  • Traditional airlines are reducing costs, thereby using certain aspects of the business model of low fare airlines

  • < e-ticketing - distribution - e-commerce > but also business class, full fare economy, best buy, one way fares and ancillary revenue.


Recommendations l.jpg

Recommendations

  • Direct contact between tourism boards, PCO,s and convention centres with the airline will become more and more important

  • A modern airline can predict its loadfactor 12 months out, passengers for an event are ideal for the airline if the forecast is low

  • Convention centers can use this to attract an event , the event organisors can get more attendants.


  • Login