"Having attended numerous travel industry events over the past few years, this stands head and shoulders above the rest, particularly in terms of the quality of content and thought leadership." - Samir Shah, Director, Market Strategy, Travelport
"I have attended many such events over the years, but Istanbul was certainly one of the best. I think you have a winner. Its reputation is bound to spread by word of mouth. The choice of speakers was excellent, as was the organisation. Your staff are to be congratulated." - Barry Humphreys, Chairman, British Air Transport Association
	"Thank you for organising a great meeting. I enjoyed the conference, meeting the many colleagues and the insights discussed. The location was impressive and the event was well organised" - Frederik van Essen, Director, Corporate Strategy, Air France-KLM
"Very insightful, excellent content and information. Took away much food for thought to incorporate into our strategic planning process." - Kaylene Shuttlewood, General Manager GSA, Jetset Travelworld Group
	"Airlines in Transition was a very well organised conference; thank you for the effort put in to make it happen."  - Rae Huang, Assistant Manager, Changi Airport Group
"Very useful to exchange info with other airline chiefs." - Lim Kim Hai, Executive Chair, Regional Express
	"Panel and presentation topics were chosen very successfully" - Gulsen Ozbay, Group and Convention Specialist, Turkish Airlines
"The high quality of the participants and open/panel style discussions ensured it was both engaging and informative." - Senem Ozbezeyen, Territory Sales Director, SITA
	"I would like to thank you very much for the excellent organisation and the efficient planning" - Dr Hamdi Chaouk, Civil Aviation Authority, Lebanon
"Well done to team of CAPA organisers, and friendly atmosphere created" -Peter O'Kelly, Commercial Director, Datalex

Airlines in Transition Summary Report

Please note: An in-depth post event report is currently being prepared and will be available for download shortly. Below is a short summary of the event proceedings.

CAPA’s Apr-2012 CEO Summit, Airlines in Transition, held at the Ciragan Palace in Istanbul, sought to address a complex but very important issue to the airline industry as it evolves: allowing integration between all types of airline to create a more effective and, ideally, profitable business.

Since the spread of low-cost airline operations, numerous barriers have existed to prevent cooperation between LCCs and full service carriers.

For example, until very recently, no low-cost airline was a member of a global alliance; variances in distribution platforms have hindered cooperation, even where the will to work together existed.

But, as time has passed, most LCCs have in any event evolved away from the simple point-to-point low-cost unbundled model, adopting greater complexity as they sought to increase yield, grow traffic and differentiate themselves.

Today, both full service and low-cost airlines are increasingly exploring ways of cooperating, as a matter of priority. There are many reasons for this, but the common thread is that there are mutual advantages in working together.

But there are complexities, for example:

–      IT incompatibility, from distribution through data collection and operating systems;

–      Operational issues – delivering a seamless product, coordinating schedules, airport operational friendliness;

–      Strategic airline issues;

–      Integration into global alliances – or not; and

–      Increasingly importantly, how to enhance merchandising/ancillary revenue opportunities.

Because of the range and intricacy of these obstacles, CAPA felt the topic should be addressed at CEO level. We invited the largest-ever mixed gathering of global LCC and full service airline CEOs to discuss these issues under the thought leadership of four highly experienced professionals in a series of panel sessions – in which audience participation was a vital part. In this we were fortunate to have a highly educated audience, provoking what became a very thoughtful debate. We are preparing a full report on the Summit, for publication in Jun-2012.

In a nutshell, the process of mutual integration is a highly dynamic one. For example, American network airlines are rapidly modifying their strategies to emphasise their strengths – and offset their domestic weakness on the cost side. The US majors now operate about 40% and more of their ASKs in international operations and are seeking to grow this. In turn, the domestic point-to-point operators are feeling the need to respond in kind, but mostly without using their own metal to do so.

For the former stripped down LCCs, this means evolving their basic models to establish and work within partnerships, requiring both a strategic shift and complex modifications of their respective IT platforms to allow effective distribution and data communications.

In Europe many of the same underlying dynamics apply, but there are other features too. And hence responses vary. Thus, where the US majors seem to have had their fingers burnt once too often when it comes to using low-cost subsidiaries as a fighting force at home, several European airlines are seeking to move along that track. But unlike the US LCCs, Europe’s largest ones, easyJet and Ryanair at least, appear to have little interest in extrapolating into long-haul partnerships.

Meanwhile, in Asia Pacific, almost anything goes. This high growth market is still in its infancy and a patchwork of lingering protectionism and unfettered competition guarantees a vibrant and exploratory marketplace. Low-cost subsidiaries of full service airlines have become the rule rather than the exception. In an essentially international environment – which is therefore circumscribed by bilateral ownership and access restrictions – cross-border joint ventures are also a vital force.

Then again, among the BRIC markets a whole different range of experiences is unfolding.

The diversity of challenges and of the stages of development in different markets makes for a valuable international exchange of views. There is much to be learned this interchange. It is not a one-off though; in this constantly changing business, today’s solution can be tomorrow’s problem.

CAPA and Airline Leader's Airlines in Transition (AIT) Summit is a CEO forum that brings together full service airlines, LCCs and hybrids to find new partnership models as they evolve strategically and technologically.

In Apr-2012, we invited the largest-ever mixed gathering of global LCC and full service airline CEOs to discuss these issues under the thought leadership of four highly experienced professionals in a series of panel sessions – in which audience participation was a vital part. In this we were fortunate to have a highly educated audience, provoking what became a very thoughtful debate. We are preparing a full report on the Summit - stay tuned for more details.

[more]