CAPA Airline Leader Summit

Dublin, Ireland
11-12 May 2017
DAY 2 – FRIDAY 12 May 2017
09:00 Chairman's Welcome
CAPA – Centre for Aviation
, Executive Chairman, Peter Harbison
  Part IV: How do airlines prepare for the new environment?
If disruption occurs of the scale envisaged, airline managements will need to address ways of preparing for the change – now. Change is much more than incremental. Do Managements have the tools to deal with it?

We have assembled two management boards with their respective advisers, to assess options for future. The first will review the operational market evolution, partnerships and ownership issue; the second will address how to respond to the inevitable inroads into data manipulation that external companies will control.

In an innovative and challenging format. A panel of leading executives will explore options available to management in the new marketplace.
Boardroom Session 1: Operational - Assessing strategic options
Whatever the status of disruption in the short and medium term, what can airlines do to prepare for a new environment which will exist in 2025? Creating a bridge to the future. Getting it right now will not just be optional, but a matter of survival – or not. As the old system dies, there will be casualties.
This Board meeting will explore the options available to airline managements, notably the shape of alliances and airline partnering, the role of equity acquisitions, how regulatory bodies will view JVs; can inter-governmental bilateral relations adapt fast enough to allow airlines the scope to prepare for the future. Is there scope for large non-airline investors to help?
  • What are the pre-requisites for successful partnerships as a platform to a more viable future?
  • Should cross-border JVs be adapted formally into bilateral agreements?
  • Are JVs the future (with potential for further equity links)?
  • Where do the anti-trust bodies sit now – what attitudes are they exhibiting towards JVs?
  • Is it useful to plan on the assumption that O&C rules will be reduced or removed – and if so what can be done?
Possible Case Studies #1: What’s the future on the North Atlantic? The new international battleground. Norwegian has added new trans-Atlantic competition to a dozen markets, and has 100 B737MAX aircraft it will use to the US. Meanwhile, British Airways is now responding with new flights to non-traditional markets like Fort Lauderdale and Oakland. Wow Air and Thomas Cook are adding competition, and JetBlue is threatening to use A321neos across the Atlantic.

Possible Case Studies #2: Chinese airlines and long haul lower cost Asian carriers are becoming powerful on the Pacific and European routes. How do foreign secure viable positions in these markets.

Possible Case Studies #3: Gulf airlines are the most efficiently positioned geographically and in terms of fleets and cost bases. There are only three (along with the other super-connector, Turkish Airlines); what partnership options present themselves – or should they be stopped on the grounds of unfair competition?

Chairman: CAPA - Centre for Aviation, Executive Chairman, Peter Harbison

Third parties: 
  • Aeroflot, Deputy General Director for Strategy & Alliances, Giorgio Callegari
  • European Commission, Director General MOVE, Henrik Hololei
  • IAG, CEO, Willie Walsh
  • Irish Aviation Authority, Chief Executive, Eamonn Brennan
  • Malaysia Airlines, Group MD & CEO, Peter Bellew
10:25 Airlink
BKH Aviation, Chairman, Barry Humphreys [Download Now]
10:30 Coffee & Networking 

In an innovative and challenging format. A panel of leading executives will explore options available to management in
the new marketplace.
Boardroom Session 2: Marketing and Sales - Coming to grips with the data revolution (and consumers)
The most significant disruption that has occurred to date in the aviation and travel industry (and retail generally) is the shift in behaviour of consumers.

The app-empowered consumer is more knowledgeable today, leveraging greater transparency, wanting direct control and unwilling to accept arcane rules that have governed airline operations for decades. And when they behave as business travellers they demand to be rewarded and treated with some recognition of the value they bring to the airline – something airlines are rarely able to deliver.

In short, consumers have been liberated (and captured) by technology. Small businesses are able to compete in global markets in ways that would not have been possible 15 years ago (CAPA is one of them!); B2C consumers are equipped with the information to see into the market – and the tools to get what they want. And if they are prevented for what they consider unnecessary reasons, they will make their concerns felt vocally through social media outlets. For an industry which has so often relied on opacity to extract greater benefits, transparency can hurt.

Many airlines are now aware of this new consumer power – and they are making all the right noises, talking of the need for personalisation and understanding the customer. Yet very few airlines are actually doing anything effective to implement the words they are using; they know they need to, but rarely have the instruments to convert words into action.

Third party data aggregators, like Airbnb, Amazon, or messaging functions such as Facebook's WhatsApp or China's WeChat - which now enables travel bookings - illustrate how every word spoken can be used to capture consumers. A private conversation where people discuss a football match can translate into an offer of travel and accommodation for the game. And WeChat can book it all.

For an airline, even with a willing management and the ability to fund a few billion dollars’ worth of investment (that narrows the field significantly), it would take at least two years for even the most innovative airline to achieve “personalisation” on a useful scale. And it cost money. The airlines’ lack of enthusiasm for investing heavily in big data “could be due to the fact that many big data projects don't have a tangible return on investment (ROI) that can be determined upfront" (Gartner).

Some airlines are trying, with tech labs and the like, but even the best pale into insignificance when faced with the scope and scale of the major analytics aggregators.

So these third party data hegemonists are able to offer a growing array of “solutions” to the providers, all the while strengthening the reliance of their hotel, airline and other clients.

The end game would appear to close out airlines, GDSs and other traditional sales outlets – or would it? Whatever the overall outcome, airlines have a massive job to do to approach the sort of data reach and personalisation opportunities that the third parties have.

This second board room discussion will explore the options available and what is possible, or not.
  • Can airlines organically develop big data solutions
  • Is the prospect of “Data partners” – which have the ability to deliver all that airlines need in terms of data aggregation and application in the market – a realistic proposition?
  • How valuable are the goldmines of FFPs in this process (for example is it preferable simply to focus on the higher end traveller and ignore the once-a-year passenger, or try to attract those who do not fly on the airline at all)?

Chairmen: CNN, Anchor, Richard Quest

Third Parties: 
  • easyJet, Group Director Strategy & Network, Cath Lynn
  • ForwardKeys, CMO, Laurens van den Oever
  • OpenJaw Technologies, CEO, Kieron Branagan
  • Travelport, Global Head of Product & Marketing, Air Commerce, Ian Heywood
  • WebinTravel, Founder & Editor, Siew Hoon Yeoh
12:30 Lunch and Conference Close
Golf Day: THE CAPA CUP: Europe vs ROW  Tourism Ireland are kindly hosting a special Golf Day at the Powerscourt Golf Course. Tee off will be at 13:15 following lunch at the end of the Summit for those golfers already registered to play.