Transcript Who Gets What? A Convention Centre Perspective

New directions
for the airline industry
Robert Kuijpers
Former Executive Chairman of
SN Brussels Airlines
Background to Airline industry
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Not all doom & gloom
In Europe:
• +/- 11 million seats per week
• 25% are no-frills
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Load factors:
• Europe 65%
• USA 85%
• Asia 80%
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8 million passengers per week
Underlying growth of traditional carriers: 4%
The international market
Four types of players:
 Mega Network
 Network
 Non-Network
 Pure Leisure Non-Network
Mega Network Carriers
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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
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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
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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
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Some intercontinental
Simple revenue management system
Point-to-point
Set-only product
Aggressive pricing/cost focus
Primary airports
Challenges (1)
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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
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)
Middle East carriers:
 Emirates: 74+93 (45 A380)
 Quatar: 23+25 (2 A380)
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Ethiad: 8+31 (4 A380)
Everyone makes money
EXCEPT airlines!
Return on Capital Employed:
Manufacturers
Lessors
Handling
Catering
Airports
115%
110%
GDS
125%
Airlines
95%
Conclusions
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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
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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.