Biggest challenges coming 2018

Transcription

1 Biggest challenges coming 2018 Oil prices still increasing Heightened Competition Uncertain Political Environment Labor Costs increasing $ Reducing debt

2 Despite these challenges Demand all time high Improving Economies Airlines investing in products Increasing focus on customer More efficient flight routes

3 Passenger numbers are expected to increase to 4.3 billion in % expected GDP growth (the strongest since 2010). An improvement in net margin to 4.7% (up from 4.6% in 2017) Source: iata.org

4 Oil and jet fuel estimated prices continue to rise throughout 2018 Oil $54 per barrel $60 per barrel Jet fuel $65 $73 per barrel per barrel Source: IATA

5 Five fastest-growing passenger markets 1. China 2. US 3. India 4. Indonesia 5. Turkey Source: iata.org

6 2018 Projected Passenger Demand and Capacity Growth Africa Asia / Pacific Europe Expected small losses of $100 million in % Low cost carriers intensifying Competition and keeping profits low +7% Strong economic recovery in home markets +6% Passenger Demand +7.5% +6.8% +5.5% Latin America International traffic from Latin America remains healthy Middle East Slowest capacity Growth since 2002 North America forecasted to generate the strongest financial performance Capacity Growth +8.0% +7% +3.5% +7.5% +4.9% +3.4% Source: iata.org / December 2017

7 The cost of air travel, adjusted for inflation, has declined more than 17 percent since 2000, driving ticket purchases. Source: Airlines for America

8 Customer loyalty and retention will rely on value-driven and personalized offers New forms and methods of payments Bundles and customized ancillary products Targeted marketing offers Utilizing customer data smarter and more efficiently Source: IATA

9 82% of travelers would like to use their smartphones for as many travel activities as possible, from booking flights to passing through security, and boarding the plane. Source: IATA

10 Evolving technology is key to airlines success. Passengers want: Automation of more airport processes Real-time information sent to phones More efficient security process Electronic bag tags Better inflight connectivity Source: IATA

11 Airlines are responding by re-investing in the customer experience 1,674 $1.5B Brand new planes delivered in 2017 worldwide Average spend per month investing in product and customer experience Source: IATA/CAPA

12 Overall satisfaction with the airline industry in 2017 increased by a significant 30 points - continuing a trend of steady performance increases that began in JD POWER Source: A4A

13 Among business travelers, 21% posted a comment about their airline experience on social media nearly ¾ of social media comments are described as positive When an airline responds to any social media post whether it s positive or negative there is a noteworthy 121- point lift in passenger satisfaction.

14 Where will US travelers go in 2018? I C E L A N D A U S T R A L I A P O R T U G A L S P A I N U.S. Tour Operators Association

15 airlines 7 avg flights/day 4 city pairs SFO LAX MEL SYD BNE

16 airlines 16 avg flights/day 9 city pairs YVR SFO MEL SYD BNE LAX DFW IAH

17 129% increase in average daily flights

18 New nonstop! SYD IAH Service Started January 20, 2018 Only nonstop service between Australia and Houston offers customers from Sydney one stop connections to more than 70 cities across the United States including Chicago, New York, and Denver. United continues to serve Sydney nonstop from Los Angeles and San Francisco.

19 Launching the world s 4 th longest flight took a lot of coordination and support

20 United to Australia SFO LAX MEL SYD IAH #1 US carrier to Australia

21 All flights operated by the 787 Dreamliner

22 United has the best network from the U.S. to Asia/Pacific Daily nonstop flights between the U.S. and Asia/Pacific Source: Diio for TME Nov 2018

23 United has the best network from the U.S. to Asia/Pacific Sydney now has better access to major cities on United and over 70 cities across the U.S. Houston Toronto Orlando Miami Connects in one direction Connects in both directions