Airline Business Trends and Challenges 2008
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This document discusses trends and challenges facing the airline industry. It covers topics like rising fuel costs, heavy taxes, different airline business models including network carriers, alliances, low-cost carriers, and cargo carriers. It also discusses new competition from high-speed rail and airlines from China and India, changing regulations, the importance of hubs and networks, new aircraft types, and challenges around increasing revenue, optimizing operations, and improving the customer experience. The future of the airline industry is predicted to include a small number of long-haul network carriers and low-cost providers, along with regional and niche players.
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Airline Business Trends and Challenges 2008
- 1. Airline Business - Trends and Challenges Lucas den Boer Airline Business Executive Consultant LUCASBUSINESS B.V. January 2009, Netherlands
- 2. Financials and Business Models www.lucasbusiness.com ( ) This report or any part of it, may not be copied, circulated, quoted without prior written approval from LUCASBUSINESS B.V.
- 3. www.lucasbusiness.com ( ) Net Result: World Air Transport
- 4. Fuel price is soaring (*) including hedging policy effect oct. - déc. 03 (brent 28 $) oct. - déc. 04 (estimated 8/10/04) oct. - déc. 04 (estimated 26/10/04) + 66 % 105 175 160 On a flight from Paris to Asia : 2003 2004 www.lucasbusiness.com ( )
- 5. www.lucasbusiness.com ( ) Heavy Taxes
- 6. Source: BAH/ adapted AEA www.lucasbusiness.com ( ) Airlines business models
- 7. www.lucasbusiness.com ( ) “ Stuck in the middle”
- 8. www.lucasbusiness.com ( ) EBIT Margins
- 9. Air France - KLM : to combine the networks ... to sustain profitable growth 2 complementary airlines fare combinability common bottom-line Network airlines - Cooperation & Integration
- 10. Oneworld; like United Airlines, Lufthansa and SAS SkyTeam; like American Airlines, British Airways and Iberia Star Alliance; like Delta, Northwest, Air France-KLM and Alitalia … Together 60% of the market Alliances
- 11. Dilemma: Joining alliances, or Staying independent Regional airlines
- 12. More profitable than passenger business More grow than passenger business Less pressure from Low Cost Airlines Cargo airlines
- 13. Strong increase of low cost airlines Low cost airlines
- 14. Source: UK CAA Low cost airlines
- 15. (Environmental) Trends www.lucasbusiness.com ( ) This report or any part of it, may not be copied, circulated, quoted without prior written approval from LUCASBUSINESS B.V.
- 16. Railteam: new alliance of West-European highspeed trains Competition: highspeed trains
- 17. Competition: new airlines from China
- 18. Competition: new airlines from India
- 19. New laws and rules
- 20. Before: London – Frankfurt – New York After: London – New York Open skies
- 21. Network is key
- 22. Growing importance of ME in network
- 23. Hub, heart of the network
- 24. A hub to link small markets to the rest of the world
- 25. Special branded network connections
- 26. Current situation Possible future situation Hub airports of different size Megahubs Regional/ P2P airports “ Specialist” Hub airport Regional / P2P airports Hubs in development
- 27. Fuel saving Twin-engines Reducing emission per flight More quiet, less noise B787 New aircraft types A350XWB
- 28. Airline Challenges www.lucasbusiness.com ( ) This report or any part of it, may not be copied, circulated, quoted without prior written approval from LUCASBUSINESS B.V.
- 29. A seamless ground experience
- 30. Increasing revenue Optimization of capacity Increasing commercial load factor (%) e-Ticketing e-Services Payment methods Streamlining processes Mobile solutions Portals Websites (total travel experience) Commercial goals
- 31. Greater differentiation, better customer care
- 32. Customer loyalty
- 33. Operational Excellence On-time performance Cost reduction Operations
- 34. Amadeus creates dominant position …
- 35. Project Falcon - 3 Year Recovery Plan Fundamental Changes World-class customer service Brand & marketing strategy Call centre in MCT People Redesign network planning concepts Leisure brand airline Focus on yield Cost Reductions and efficiencies ... to position Gulf Air as a World-class airline with unique Arabian hospitality Typical airline transformation
- 36. Future of Airline Business www.lucasbusiness.com ( ) This report or any part of it, may not be copied, circulated, quoted without prior written approval from LUCASBUSINESS B.V.
- 37. 3-5 Long-haul Network Dominators Low-cost Service Providers No Frills (2 to 3 majors) Charters (2 to 3 majors in Europe) Niche Carriers Regional or national Cargo and Integrators Future of airline business in Europe
- 38. For more information please contact: Lucas den Boer phone: +31 (0)6 22 241 508 email: [email_address] My references