AIR BERLIN PLC SHAPE & SIZE ANALYSTS & INVESTORS PRESENTATION

Transcription

1 AIR BERLIN PLC SHAPE & SIZE ANALYSTS & INVESTORS PRESENTATION Berlin, 21 September 2011

2 2 Management summary Shape & Size targets for EUR 200m earnings improvement CURRENT CHALLENGES Overall economic development considerably affects the aviation industry Economic trend of cyclical imprecision calls for cautiousness Development of yield and bookings for 2011 is not encouraging; outlook statement difficult AIRBERLIN S WAY FORWARD airberlin continues its proven business model which spans a network mix of scheduled and leisure routes While consolidating airberlin s set up we established the project Shape & Size which targets to achieve earnings enhancement of EUR 200m The triggered measures will neither affect our safety, the customer service nor the quality of full service package Shape & Size is 1 st priority for management and airberlin

3 3 Originally a pure touristic operator, airberlin has evolved into offering a combination of touristic and full-service scheduled traffic Positioning with respect to generic business systems FULL SERVICE Service leadership Dense network / premium traffic Business & private travelers Multiple channels / corporate accounts BENEFITS Trend anticipation Growth potential Productivity Low fares + ancillaries Point-to-point routes No frills service Cost efficiency LOW FARE/ LOW COST TOURISTIC Touristic travel / holiday destinations Off-peak scheduling flexibility Little service / no end customer loyalty Distribution through tour operators

4 4 Consolidation of airberlin's current setup SHAPE & SIZE Capacity deployment Process efficiency Operational complexity Organizational alignment TOURISTIC Protection and foster Reduction of seasonal imbalances Redesign of sales channel strategy FULL SERVICE Profitability improvement Selective growth with focus on market coverage Development of hubs and alliance cooperation

5 1. airberlin organizational structure 5

6 6 Organizational structure Air Berlin PLC BOARD OF DIRECTORS Air Berlin PLC CHAIRMAN Dr. H.-J. Körber EXECUTIVE COMMITTEE G: CEO H. Mehdorn F: CFO U. Hüttmeyer C: CCO P. Gregorowitsch O: COO C. Debus CENTRAL FUNCTIONS GC: Communication FC: Controlling CN: Network OF: Flight OPS Air Berlin OG: Ground Operations DIRECTORATES GN: NIKI N. Lauda GI: Internal Audit FA: Accounting/Tax CS: Sales Scheduled services OB: Flight OPS belair OP: Contracting GT: Maintenance H. Himmelreich GA: Aeropolitical Affairs FF: Asset and Finance Mgmt CT: Sales Touristic services OC: Crew Operations OS: Customer Services GP: Product T. Ney GL: Legal FI: Investor Relations CM: Marketing OO: Operations Control OF: Facility Mgmt OH: Human Resources C. Debus GS: Strategy/ Corp. Development FP: Procurement CA: Alliances OI: IT OT: Ticket desk OA: Administration E. Schütt FM: M&A CD: Cooperations & Distribution OY: Safety OX: Corporate Gov./Compliance new/changes

7 2. Project: Shape & Size 7

8 8 Shape & Size Steering Board: H. Mehdorn and U. Hüttmeyer 1. Topline Sponsor: P. Gregorowitsch 2. Network & Fleet Sponsor: U. Hüttmeyer 4 C L U S T E R S Projekt Management Office (PMO) 3. Costs Sponsor: C. Debus 4. Maintenance Sponsor: H. Himmelreich M 1.1 Ancillary revenue 2.1 Aircraft sourcing 3.1 Airport sourcing 4.1 Production O D U L E S 1.2 Enhancing PoS 1.3 Fare strucure 1.4 Marketing 1.5 oneworld 1.6 Product 1.7 PSS 1.8 RMS 2.2 Building Vienna Scheduled Touristic 2.4 Increase earnings capacity 2.5 Sustainable network 2.6 Seasonal imbalances 2.7 Fleet productivity 3.2 Onboard services 3.3 Crew base concept 3.4 Crew productivity/ travel 3.5 Enhancing e-check in 3.6 Fuel saving 3.7 Improvement PMI punctuality 3.8 Compensation payments 3.9 OCC punctuality processes 3.10 IT 4.2 Engineering 4.3 Material & Logistics 4.4 Strategic Procurement 4.5 CAMO 4.6 ABT HR 1.9 Yield development 3.11 Overhead 3.12 Procurement/ admin cost saving

9 9 Topline goals Increase yield Enhancement of average yield per sold ticket on certain route bundles Increase Seat Load Factor Enhancement of average load factor per sold ticket on certain route bundles Increase toolbox Expansions of business know-how especially with regard to IT progresses for example Increase of ancillary revenue from surcharges and other non-tariff components (e.g. piece concept) Maximizing positive network effects from partnerships Entering oneworld alliance in spring 2012 Increasing sales share in international markets Enhancing point of sale Entering oneworld alliance in spring 2012 enables access to global network which encompasses an increased attractiveness, especially for business travelers Increasing load and controlling availabilities through the implementation of PSS Implement new passenger service system (PSS) State of the art sales platform to optimize existing sales channels and enable the alliance membership entry Implement new revenue management system (RMS)

10 10 Goals defined for improving airberlin's network & fleet structure Current focus on short-term improvements Goals Reduction of total asset ownership cost by improving productivity of fleet Increase network sustainability Reduction of complexity CURRENT FOCUS: Network efficiency Reduction of seasonal imbalances between Winter and Summer production Cancellation of network elements with poor result contribution and tied A/C resources and/or little strategic importance Improved schedule adjustments between business segments during Summer peak times IN PROGRESS: Operational efficiency Adapted aircraft and crew station concept Improved utilization of crew/maintenance resources Efficient fleet structure

11 Net reduction of 141 weekly frequencies in winter schedule 2011 and of 100 weekly frequencies in summer schedule 2012 Average weekly frequency changes airberlin group [weekly frequencies] CHANGES WINTER 11/12 VS. 10/11 CHANGES SUMMER 12 VS. 11 2, , , , W 10/11 Total Reductions Increases W 11/12 Total S 11 Total Reductions Increases S 12 Total Cancellations Frequency adjustments New routes excl. touristic routes and NIKI 11

12 12 airberlin's fleet will be reduced by 18 aircraft in 2012 Target fleet now 152 aircraft Total fleet airberlin group summer 2012 vs. summer 2011 [Bh '000] Base FY 2011 Target aircraft # Aircraft (Ø) % # Block hours 544,295-4% Ø Productivity BLH per A/C p.a. 3,250 >+ 7% Average summer 2011 Cancellations Expansion Productivity Target summer 2012 Ø Cost of asset ownership per block hour [ ] 950 <- 9%

13 13 Cost goals Reduction of cost in 2012 of about two digit million Euros as compared to 2011 Lowering DOCs / admin costs Important to reflect that no cost reductions will be made that could suffer the customer services Optimizing processes Increase efficiency and automatization of processes Crew efficiency planning Optimization of crew base concept in order to reduce proceeding cost for example Review and optimization of current supplier contracts, e.g. airports and service providers Best product at lowest cost possible commitment to current concept Reducing fuel cost and ETS costs Achieving personnel level in line with market benchmark Streamlining and simplifying procurement Streamlining of processes while maintaining flexibility and motivation Introducing state of the art IT processes Enhancing e-check in; increasing self-service rate to more than 60% of all passenger selected stations Improve punctuality Reduction of seasonal program variations Increasing crew productivity and reducing operating cost by adjusting the base concept

14 14 Maintenance goals Further cost cutting Achieve net unit cost savings Streamlining and automating processes Improve efficiency throughout the organization for example Line maintenance Increase productivity of constant technical level Base maintenance Reduce of C-check waiting times & improve on-time performance Strategic procurement Improve supply chain and supplier management Renegotiate contract terms (existing contracts) Streamline overhead organization Engineering Optimization of maintenance programs and escalation of individual tasks Improve adherence to processes and improve productivity through atomization Increase of external customer share Leverage own cost base Expand 3 rd party business especially for line maintenance

15 Thank you for your attention! 15