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Agenda
About Mauritius and Air Mauritius
Cargo Business in Perspective
Passengers and Cargo Businesses are they
Rivals, Brothers or Cousins
Cargo Business at Air Mauritius
Conclusion
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About Mauritius…
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Dot in Indian Ocean
Dakar
Mauritius
Visit us @
www.airmauritius.com
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Republic of Mauritius - Island Nation
 Mission of National Carrier
Air Links
– Geographical Position - A strategic Hub in Indian Ocean
– Assist in developing International Trade and links
Sustain Tourism Industry
– Promote Up-market and Selective Tourism
Export/Import of Goods
Airline to run on a Commercially Viable Basis
– Annual average air traffic growth of 9% since 1980
Preserve Environment/Ecology of the Island
 Aligned Interest : Country and Airline
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Republic of Mauritius – Fact Sheet
 Main Pillars of the Economy
 Agricultural mainly Sugar, Tourism Industry, Manufacturing Sector
mainly Textiles and Garments, Financial Services, Information
Technology and Services
 Moving to Service Economy
 New emerging pillars – ICT, Seafood Hub and Offshore development
 Main Exports :
 Clothing & Textiles , Sugar, Flowers, etc.
 Main Imports :
 Manufactured Goods, Capital Equipment, Foodstuffs, petroleum
products, etc.
 Member of the SADC and COMESA
 Promote bilateral and regional trade
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Past Successes Do Not Guarantee
Future ones
Competitive Environment
Deregulation
Liberalisation
More sophisticated &
Knowledgeable customers
Increased
Competition
Mergers &
Acquisition
New Entrants
Privatisation
Global Alliances
Regulatory
Barriers
Increased
Capacity
Increasing costs
eBusiness
Globalisation
Worldwide
Economic Changes
Ecological Pressure
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Radical Change to adapt in new aviation landscape 10
arising from technological innovations and new
policies
 Streamlining Business Processes through BPR
 New cost- efficient fleet , adaptable and responsive
organisation structure, cost effectiveness, yield management
 E business and Technology adoption
Competition and New Policy
 Liberalisation Waves a worldwide phenomenon getting to
our shores
 More frequencies and bigger aircraft by existing operators:
AF, BA, EK, SAA
 New players with new business rules
Corsair
LTU
Comair
Air Europe
Lauda Air
Virgin
Condor
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Resistance to change
Technical/Functional
Security / Comfort Zone
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About
Air Mauritius
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Air Mauritius Vision
To Be a
World Class Airline
Air Mauritius
International Airline operating out of Mauritius
Staff Force
of 2800
Fleet of
7 Wide-bodied + 2 A319 Aircraft
2 ATR 42 + 1ATR 72 Aircraft
3 Helicopters
2005/
2006
1,156,820 Passengers
35,666 Tons Cargo
Euro 416.6 million Turnover
28 Destinations
4 continents
About 100 weekly frequencies
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Fleet
5 Airbus A340-300
2 Boeing B767 ER
2 Airbus A319-100
1 DC8-63 Freighter Aircraft
(leased)
2 ATR
3 Bell Jet Rangers
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New Fleet Acquisition
2 A340-300E in Nov/Dec 2006
2 A330 (One in 2007/8 and the other in 2009)
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Route Network
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Cargo Business in
Perspective
Economic Growth as driver of Air Cargo
Growth
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Source: Boeing
World Cargo
Forecast 20062007
•Strong correlation between GDP evolution and Air Cargo Growth
during the past decades
Opportunities & Constraints
for MK Cargo Operations
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Industry
delocalisation
Trade Quotas
& Restrictions
New
Export
Promotion
Currency
Fluctuations
New Trade
Relationships
& AGOA
Government
Initiatives
Products
Freighter
Operations
Open Skies
Policy
Market
Intelligence
World and
National GDP
Growth
Renegotiated
SPAs
Agents
Eductours
Strikes
‘Just-in-time’
concepts
Competition
Time dDefinite
Products
Directional
Imbalances
Renegotiated
Bilaterals
Aircraft Type &
Configuration
Opportunities
Constraints
Passenger vs. Freight Growth
AAGR 2005-09
Passenger
Freight
All International Routes
5.6%
6.3%
North Atlantic
5.3%
4.6%
Trans Pacific
5.8%
6.0%
Within Europe
5.1%
4.1%
Within Asia Pacific
6.8%
8.5%
Europe to Asia Pacific
5.9%
5.7%
Europe to Africa
5.7%
4.5%
Middle East to Europe
6.6%
5.1%
Middle East to Asia Pacific
6.7%
8.8%
N America to Latin America
4.6%
3.7%
Within Latin America
4.2%
5.0%
Source :IATA Passenger and Freight Forecast 2005-2009
Higher Growth for Freight as compared to Passenger!
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Expected Growth for 2006
 World Economy –
3.1%
 Passenger Travel –
4.9%
 FREIGHT –
6.1%
(source : Boeing 2006 Market Outlook)
Higher Predicted Growth in Freight compared to PAX business!
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Type of Products
 Growth of air-freight due to time sensitive products
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World Freighter Fleet
Source: Airbus
Global Market
Forecast 20042023
•Number of freighters expected to exceed 3,500 by 2023, representing an
annual growth of 4.3% p.a.
Conversions of aircraft to cater for
increasing freight demand
According to Airbus, higher rate of conversion for regional
freighter fleets to cater for the rapidly growing Asian Market.
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Relationship Pax and Cargo
Similarities & differences between PAX
and Cargo
PAX
CARGO
•Bilateral talks
•Bilateral talks
•Airline to Airline Agreements
•Airline to Airline Agreements
•Fleet Planning
•Fleet Planning
•Route Deployment/Profitability
•Route Deployment/Profitability
•Distribution Channels:
Tour Operators – Travel Agents – PAX
•Logistics :
Check-in counter
•Product definition:
Travel Packages
•Development Strategy:
Stop over
•Distribution Channels:
Shipper – Freight Forwarder – Consignee
Emergence of Consolidators!
•Logistics:
Warehousing
•Product definition:
Destination + Connection + Rates +Timings
•Development Strategy:
Transshipments
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PAX vs Cargo - Technology
PAX
CARGO
•Inventory
•Inventory
•Booking Engine
•Booking Engine
•Fares
•Fares
•Decision Support System
•Decision Support System
•Yield Management
•Yield Management
•Technology E business
•Customer self-service
•Customer self-service
Flight and Booking status
prior to uplift
Online Sales – B2C
•Departure Control System
Track and trace facilities to
know shipment status
Online Sales – B2B
•Handling and Warehousing
System
•ULD Management
AIR MAURITIUS IN THE
CARGO VALUE CHAIN
OTHER
OTHER
TRANSPORT
TRANSPORT
MEANS
SHIPPER
FORWARDER
FORWARDER
HANDLING
HANDLING
CARRIER
GROUND
GROUND
HANDLING
HANDLING
MULTIPLE
CARRIER
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CUSTOMS
CUSTOMS
FORWARDER
FORWARDER
HANDLING
HANDLING
CONSIGNEE
CONSIGNEE
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Sources of Rivalry
 Route definition
 Days of operations and Timing of operations
 Capacity deployment
 Offloading priority
 Type of Aircraft
 Distribution/ Choice of GSA
 Funds for development
 Resources
 Alliances and Partnerships
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Sources of Partnership
 Significantly contributes to the Socio economic development of a Country
 Tourism
 Manufacturing Services
 Transhipment
 Bilateral Talks/ Airline to airline talks/ Holistic approach
 Contribution to overall Route /Network Profitability
 operations
 Fleet investment
 Economies of scale for Handling cost
 Treated on Basis of Marginal Costing for mixed flights
 Increase Asset Utilisation by operating Pax aircraft for freight only on
short sectors
 Compensating for seasonality
 Security
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Summary
 Cargo is a significant contributor to the Overall Aviation Industry
 Fleet development
 Aircraft Manufacturers New and conversions
 Handling Agents
 Airports
 Airlines
 Supports the Passenger business both in terms of Logistics and Economic
Justification
 Competes with the Passenger Business for resources and often differs in
Schedules, route planning and choice of Aircraft
 Has a roadmap of development which can be mainly based on Mixed
aircraft but also dedicated Freighters
 Has its own needs of People skills Procedures , Security needs, Yield
management process and Logistics facilities
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Cargo Business at
Air Mauritius
Air Mauritius
Cargo Objective
TO MAKE CARGO BUSINESS A SIGNIFICANT
CONTRIBUTOR TOWARDS THE PROFITABILITY
OF AIR MAURITIUS BY ENSURING OPTIMUM USE
OF CARGO CAPACITY AND PROVIDING HIGHLY
RELIABLE, INNOVATIVE & COST-EFFECTIVE
SOLUTIONS TO OUR CUSTOMERS
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Strategic Intents
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 To optimise the use of belly capacity throughout the network
as established by passenger operations & complement with
freighter operations
 To have a Revenue Management process optimising capacity through a
dynamic pricing policy based on demand
 To closely monitor Sales performance/Route contribution and take
proactive actions
 To develop Mauritius Cargo Hub through regional freighter operations
 To build loyalty with all stakeholders of the industry
 Develop Incentive mechanisms to promote both volume sales and growth
 Gear the organisation structure to provide personalised services to main
distribution channels
 Develop an effective and efficient Customer Relationship Management
for personalised services to shippers and consignees
 Develop Partner Programs with stakeholders
 To Streamline and improve processes ie Quality
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Strategic Intents
 To develop new products attractive to the customers
 Time-definite services
 Deferred services for price-sensitive customers
 Multi-modal services and Partner Programs to extend our reach
 To develop Product specific expertise
 To develop a flexible Organisation Structure that promotes accountability,
collaboration and teamwork which fosters decision-making through the
empowerment and continuous development of staff
 Leverage on modern Technologies to develop systems & tools that will
enhance processes thereby bringing us closer to the market and be more
responsive in meeting customers’ needs.
 Information management
 To Develop Modern Logistics Infrastructure
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Evolution of Cargo Business at MK
1,700
40,000
34,836
35,706
35,000
31,290
28,824
1,608
28,596
30,000
1,500
1,551
1,448
Weight (Tons)
25,000
1,400
1,340
20,000
1,300
15,000
1,200
1,100
1,185
1,144
10,000
5,000
Revenue (MUR m)
1,000
-
2000-1
2001-2
2002-3
2003-4
2004-5
2005-6
Financial Year
CARGO REPRESENTS 13% OF MK’s TURNOVER
Weight (Tons)
1,600
Revenue (MUR m)
36,717
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Cargo Business @ Air Mauritius
• CARGO CONTRIBUTION
– Cargo represents 13% of the company’s turnover & our
operations are primarily based on belly-hold passenger
aircraft though increasing importance of freighter
operations.
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Cargo Revenue Breakdown
60.00
22%
Revenue (EUR m)
55.00
50.00
45.00
40.00
35.00
30.00
25.00
20.00
02/03
Freight
03/04
04/05
Mail and Courier
05/06
Due Carrier
Cargo Revenue inc Surcharges on
Freighter and Pax flights – Eur M
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60.00
50.00
Eur - M
40.00
30.00
20.00
10.00
0.00
2002-3
2003-4
Revenue on Freighter - Eur M
2004-5
2005-6
Revenue on Passenger flight - Eur M
Note: Cargo revenue includes Freight Revenue, Mail and Courier and Surcharges
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Fleet Cargo Capacity
Cargo Capacity
Fleet
No of PAX
Pallets
Containers
Bulk
A319
120
-
-
√
1,000
B767
175
3
2
√
9,000
A340
294
6
2
√
12,000
A340E
313
6
2
√
15,000
-
18
-
√
40,000
DC8
Vol. Wgt
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Air Mauritius - Cargo Worldwide Offices
US/Canada
No of Offices: 2
Asia/Middle East
No of offices:15
Europe
No of offices: 25
Dakar
Mauritius
Africa/
Indian Ocean Is.
No of offices: 7
Worldwide Summary:
No of offices: 52
Australia
No of offices: 3
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HUB STRATEGY
Whatever Your Direction…
Europe
24 Flights/Week
Capacity: 305 Tons
Mauritius is the Hub
Europe
India
9 Flights/Week
Capacity: 110Tons
Dubai
India
Far East
Dakar
Nairobi
Madagascar
8 Flights/Week
Capacity: 31 Tons
Madagascar
Mauritius
Johannesburg
South Africa
12 Flights/Week
Capacity: 80 Tons
Cape
Town
Reunion
Durban
Reunion Island
10 Flights/Week
Capacity: 120 Tons
Australia
3 Flights/Week
Capacity: 33Tons
Perth
Melbourne
Enabling Systems for Cargo Business
at Air Mauritius
To optimise our aircraft cargo capacity…
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Implemented a Cargo Reservation System across the
Air Mauritius network.
To provide better customer service…
Integrated to a number of Cargo Community
Systems worldwide.
To better control our revenue processes…
Developed a Cargo Revenue Accounting System.
To assist decision making processes…
Implemented a Decision Support System.
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MK Cargo Challenges
• NEW MASTER AIR TERMINAL PLAN
– Creation of an AIR CARGO LOGISTICS CENTRE
– Increased Capacity for DRY WAREHOUSING SYSTEM
– Centralised COURIER CENTRE
– NEW COLD ROOM Facilities with Extra Space
– Permanent DISPLAY CENTRE of Products
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Summary
 Cargo is a significant contributor to the Overall Aviation Industry
 Fleet development
 Aircraft Manufacturers New and conversions
 Handling Agents
 Airports
 Airlines
 Supports the Passenger business both in terms of Logistics and Economic
Justification
 Competes with the Passenger Business for resources and often differs in
Schedules, route planning and choice of Aircraft
 Has a roadmap of development which can be mainly based on Mixed
aircraft but also dedicated Freighters
 Has its own needs of People skills Procedures , Security needs, Yield
management process and Logistics facilities
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Cargo has indeed become
a major player of the
Aviation Industry --Dominant Cousin---
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