Issues facing regional airlines and smaller markets

Transcription

1 Issues facing regional airlines and smaller markets Tampere Aviation Forum Simon McNamara Director General European Regions Airline Association (ERA)

2 Contents What is a regional airline The role of regionals in remoter regions Market developments affecting the business Attracting air services to smaller markets Future challenges for the business

3 What is a regional airline?

4 What we do Founded in 1980, ERA is a European airline trade association representing European air operators: 52 airline members 22 Airports 115 manufacturers and support industry The only European airline trade association which represents and brings together the entire aviation community

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6 Wideroe Air Greenland Air Iceland bmi regional Titan BAE Corporate Air Travel Jota Aviation Atlantic Airways Braathens Aviation West Atlantic Cargo DAT DOT Stobart Air Eastern Airways Cimber Avion Express Jet Time Belavia CityJet KLM Cityhopper ASL Airlines Ireland Denim Air Avanti Air Flybe. VLM Hahn Air Blue Islands HOP! Luxair Air Urga Aurigny Air Services ASL Airlines FranceSky Work Airlines ASL Airlines Hungary Adria Airways Carpatair ASL AirlinesSwitzerland Trade Air Etihad Regional Blue Air Montenegro Mistral Air Borajet PGA Express Astra Airlines Sata Air Acores Binter Air Nostrum Amapola Sky Express Nordic Regional Airlines Oy Nordica

7 Who flies short haul anyway? Source: ATR

8 Characteristics of regional airlines Business models Independent Wholly owned subsidiary Franchise Capacity Purchase Agreements/Wet Lease/ACMI

9 ERA in numbers

10 The market size

11 Where do regionals fit in?

12 GDP per inhabitant Conclusion Workers migrate to higher GDP concentrations Higher GDP concentrations need air links to allow migration KEY: Darker blue = higher GDP per capita Lighter green = lower GDP per capita Source: Eurostat 2014 yearbook. Data for 2011

13 Population density KEY: Darker brown = higher population density Lighter brown = lower population density Source: Eurostat 2014 yearbook. Data for 2012 Conclusion Higher population densities require transport links Links are needed between high and low density populations

14 Employment rate Conclusion Workers migrate to where jobs are Workers need air links to move to where jobs and business is KEY: Darker brown = higher employment rates Lighter brown = lower employment rates Source: Eurostat 2014 yearbook. Data for 2012

15 Density of rail networks Conclusion Where no competing or complimentary mode exists, air transport becomes more and more vital KEY: Darker green = higher density of rail networks Lighter green = lower density of rail networks Source: Eurostat 2014 yearbook. Data for 2012

16 Where do regionals fit in Regionals several key markets Feeding major hubs (especially from the regions) Feeding secondary hubs Linking lower volume point to point services Providing essential services where no other mode can compete Ensuring Europe s remoter regions stay connected

17 How do ERA members fulfil this need?

18 ERA s network

19 The Finnish Network

20 Linking remoter regions

21 Linking remoter regions

22 Linking remoter regions

23 Linking remoter regions

24 Feeding primary hubs

25 Connecting Europe s secondary capitals

26 Connecting Europe s secondary capitals

27 Market developments affecting the business

28 Key market developments Consolidation Competition

29 Consolidation

30 Attracting air services to smaller markets

31 Key factors The market for travel business, leisure, social The size of the market Alternative means of transport/communication The cost of travel Competition (by air) The use of Public Service Obligations The ease of operation

32 The future of the industry Continued strong competition in the sector Pressure on costs will continue to be strong Price will remain a strong driver for competition Consolidation will continue Regional services will feel the pressure

33 The future of the industry A major regional airline CEO s outlook on the future of the industry: The air traffic market in Europe is moving to a situation dominated by a mix of 3-4 legacy carriers, 3-4 low cost carriers and a variety of regional airlines exploiting specific niche markets

34 Conclusion Remoter regions still rely heavily on air transport European demographics, employment and GDP spread mean air transport will continue to play an important role transporting people from the regions to the core Regional carriers play an important role in supporting the movement of people now and in the future As an industry regional aviation should be encouraged and supported But in a competitive and consolidating market actually attracting air services is hard!

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