Biggest challenges coming 2018

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Transcription:

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

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

Passenger numbers are expected to increase to 4.3 billion in 2018. 3.1% expected GDP growth (the strongest since 2010). An improvement in net margin to 4.7% (up from 4.6% in 2017) Source: iata.org

Oil and jet fuel estimated prices continue to rise throughout 2018 Oil 2017 2018 $54 per barrel $60 per barrel Jet fuel $65 $73 per barrel per barrel Source: IATA

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

2018 Projected Passenger Demand and Capacity Growth Africa Asia / Pacific Europe Expected small losses of $100 million in 2018 +8.0% 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

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

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

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

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

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

Overall satisfaction with the airline industry in 2017 increased by a significant 30 points - continuing a trend of steady performance increases that began in 2013. - JD POWER Source: A4A

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.

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

2007 2 airlines 7 avg flights/day 4 city pairs SFO LAX MEL SYD BNE

2018 6 airlines 16 avg flights/day 9 city pairs YVR SFO MEL SYD BNE LAX DFW IAH

129% increase in average daily flights

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.

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

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

All flights operated by the 787 Dreamliner

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

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