ECONOMIC PERFORMANCE OF THE AIRLINE INDUSTRY: GLOBAL AND REGIONAL VIEW. Roman Orlik, IATA

Transcription

1 ECONOMIC PERFORMANCE OF THE AIRLINE INDUSTRY: GLOBAL AND REGIONAL VIEW Roman Orlik, IATA INAIR 2017 Prague 1

2 IATA 20 year passenger forecast: 7,200,000,000 INAIR 2017 Prague 2

3 Aviation s center of gravity is shifting eastwards INAIR 2017 Prague 3

4 TOP 10 Country pairs Additional x thousand pax per year by 2035 Annual % growth 1 UAE - India 20, % 2 Mexico - US 18, % 3 Korea - China 17, % 4 Malaysia - Indonesia 16, % 5 China - Taiwan 15, % 6 Saudi Arabia - UAE 14, % 7 Thailand - China 13, % 8 Hong Kong, SAR - Chinese Taipei 13, % 9 Canada - US 13, % 10 Singapore - Indonesia 12, % INAIR 2017 Prague 4

5 Long-run outlook for air passenger demand INAIR 2017 Prague 5

6 Air passengers volumes ( RPK) INAIR 2017 Prague 6

7 RPK growth by route and market - YTD INAIR 2017 Prague 7

8 The changing face of air pax demand INAIR 2017 Prague 8

9 Ageing populations to constrain pax growth in E.Europe INAIR 2017 Prague 9

10 Varied outlook within Emerging Europe (1) Turkey 4.8% Czech Republic 3.7% Hungary 3.0% Russia 2.9% Poland 2.8% Romania 2.1% 0% 1% 2% 3% 4% 5% Average passenger growth rate ( , % CAGR) INAIR 2017 Prague 10

11 Varied outlook within Emerging Europe (2) Turkey Russia Poland Romania Czech Republic Hungary Million O-D passenger journeys (to, from and within) INAIR 2017 Prague 11

12 Aviation impact on economy Direct: the output and employment of the firms in the aviation sector. Indirect: the output and employment supported through the aviation sector s Czech based supply Induced: employment and output supported by the spending of those directly or indirectly employed in the aviation sector Catalytic: spillover benefits associated with the aviation sector. Connectivity as the key factor to economic performance INAIR 2017 Prague 12

13 Airport issues INAIR 2017 Prague 13

14 Implications for airlines and key stakeholders Complex process myriads of factors Data excess correlation and causality issues Variable trends and external shocks Digitalization and customers behavior change Transparency pricing, fees, duties Complexity INAIR 2017 Prague 14

15 Areas revenue management must consider Data collection and analysis Protection, forecast and optimization process KPI set up and forecast validation ( SLF on highest levels: above 80% except Africa) Revenue management vs commercial view paradigm Human machines Market segmentation Distribution channels efficiency INAIR 2017 Prague 15

16 Main KPI s to check INAIR 2017 Prague 16

17 Example: RASK analysis on PRG-MAD INAIR 2017 Prague 17

18 Data sources Own database historical data Market intelligence different form of reports (PEST analysis) Industry economic data ( macro) OECD, Eurostat, WTO Business intelligence products PAXIS BSP data only ( book to travel) DDS the PAXIS upgrade with direct sales information Airs@t marketing database MIDT different methodology OAG schedules Flight global stats aircraft history, all leasing data, schedules ect WATS economic database and reports INAIR 2017 Prague 18

19 DDS database market share INAIR 2017 Prague 19

20 Revenue and Traffic Analysis INAIR 2017 Prague 20

21 Sales curve days to departure INAIR 2017 Prague 21

22 Customers behavior INAIR 2017 Prague 22

23 Customers what they want and how to keep them loyal Ticket price 45% weight in Africa, 30% in Asia, where schedule seems to be more important No surprise that for 46% leisure pax the price is critical compared to 28% for C-class pax, who, naturally, prefer the schedule and punctuality. Gender split: price - ( 43% women vs 34% men), schedule ( women 13% vs 17% men) Airs@t respondents age: the older pax are the less price sensitive ( 47% for years old vs 30% category) and more comfort demanding they appear to be ( 13% vs 24% ). And what is the least important?. INAIR 2017 Prague 23

24 Technology adoption and innovations Self service - Booking process & NDC Fast travel program Baggage RFID full control of your baggage Big data pros&cons Mobile services Biometrics Face recognition Flight updates Digital concierge INAIR 2017 Prague 24

25 Thank you for your attention Questions? Contact: INAIR 2017 Prague 25