Seeking a world class marriage between aero nautical and non aero nautical revenue

Transcription

1 Dan Cappell VP non aero nautical revenue & business development ADAC Seeking a world class marriage between aero Hosted by

2 2008 / 09 most challenging period global economies have ever faced. Some economists state the worst the world has ever seen. Focus on reducing costs and restructuring. Protecting our profitability.

3 The Trinity Forum Macau 2009

4 The fundamental thought process behind the original Trinity discussions which started in 1994, focused on the airport authorities concession model for retail being challenged to ultimately deliver a better end product our customers.

5 Global Duty Free 1993 Penetration 30% Conversion to purchase 50 % visitors = customers

6 Airport Authorities Retailers Brands AIRLINES Customers

7 How many airline management / airline marketing management excluding In Flight sales are present today? How many airport authority airline management are here today? How many retailers do we have present?

8 How many suppliers are with us? How many airport authorities are represented here today? How many suppliers have held meetings with airport authorities and airline management within the past 24 months for joint initiatives?

9 The Trinity Forum Macau 2009

10 Highly capital driven. Long term P & L sustainability is a Must have. Oil prices. Global recession. Reduced seat loads. Lower yields per seat.

11 Mergers and acquisitions Reduction in routes Moth balling aircraft Redundancies Salary reductions Terminal status

12 The Trinity Forum Macau 2009

13 Major progress in airport design and construction. Retail execution. Brands presentation and exposure. T 5 LHR. T 3 Changi. T 3 Abu Dhabi. New Airport Larnaca.

14

15

16 Global Duty Free 2009 Penetration 30% Conversion to purchase 50% visitors = customers

17 3 + 2 remain the norm. Highest bin wins. PAX modifiers. many would argue that this assistance is limited in its scope

18 Global recession. Swine Flue. Additional security. Terrorism. Baggage restrictions. Secure hold rooms. The FUTURE does not look bright.

19 The Trinity Forum Macau 2009

20 Serious relief in landing and parking charges? Management of the non aero nautical and aero nautical drivers in these times? How has the Industry helped the Airlines?

21 BAA half year results 2009 Turnover billion GBP Aero nautical income 624 m GBP Retail Income 285 m GBP Duty & Tax Free 63 m GBP 84.4%

22 The Trinity Forum Macau 2009

23 Is it therefore impossible to seek a world class marriage between aero nautical, non aero nautical and all other aspects of the Trinity?

24 US$ v Sterling exchange rates. 15% differential with domestic. 30% more expensive than key European airports. 70% transfer traffic.

25 1.5 m $ incremental growth to maintain net cash retain. Over & above a budgeted 15% year on year increase. 22 % total revenue v 8.4% PAX. P & C 20% +.

26 The Trinity Forum Macau 2009

27 Examples of world class partnerships???? HKIAA extended core category concessions Citing current global conditions. Step in the right direction ref Trinity principles.

28 AN Other airport re issued tenders. Strategic Alliance between major competitors. Over night elimination of competition. Potential loss of highest bid rational. Potential for the consumer to get a better offer???????????

29 OUT OF THE BOX THINKING. WAKE UP CALL. HISTORICAL MODEL IS FLAWED.

30

31

32 Traffic year to date + 8.4%. July, August and September mtd Retail sales more than double traffic growth. 6 new airlines. Abu Dhabi tourism authority, ADAC board, joint approach, consolidated business plan.

33

34 30 % total costs new fleets. 50% older fleets. 130 $ a barrel. 70$ + a barrel.

35

36

37 ONGOING KNOCK ON IMPACT ON OUR RETAIL BUSINESS.

38 Facilitate proven structural changes to the existing model. Things will NOT change. The reality is that the numbers and RISK is to BIG.

39 Abu Dhabi approach. Non aero nautical and aero nautical teams could work much closer together. What are we doing as an industry to address this challenge?

40 Airline Partnerships. Operate Virtual retail sales. Ability for home delivery anywhere world wide. Collection upon arrival anywhere world wide

41 Re think commercial landscape FOCUS on arrival shopping. Technology to communicate with our customers. Loyalty programs to influence customers. Reduction in packaging, Green & weight impact.

42 Commit to workshops, debate out of the BOX thinking. Utilize and capitalize on the expertise of this audience. Be more open and challenge the way we do business.

43 How will we sell in 10 years time? Create trials today re think the model. Airlines marginalize costs. Charging for all hand baggage inc Duty Free purchases.

44 CHANGE OUR MINDSET. PRICE & PROMOTIONAL DRIVEN. MARKETING FOCUS IN STORE. NEED TO ACT NOW. WE ARE NOT DOING ENOUGH.

45 The Trinity Forum Macau 2009

46 Ostrich mentality contracts. Highest bid wins. No marriage. Potential disarray.

47 Thank YOU Shukran