CAPA Airline Leader Summit: Making Money 2019

CAPA - Centre for Aviation, Executive Chairman, Peter Harbison

A compelling review of latest global economic and trade trends, and what’s in store for 2019/20. You’ll walk away with numerous insights on how your business and sector will fare, and what it means for aviation around the world. 

CAPA - Centre for Aviation, Chief Financial Analyst, Jonathan Wober

Blockchain’s role in reshaping the way businesses are run is gradually being appreciated. While frequently associated with various cryptocurrencies, its significance runs much deeper than popular cryptocurrency investment. Yet it has limitations at this stage – for example, is it ready yet to introduce changes in the distribution systems? Perhaps not, but…

This keynote from a leading industry expert explores many of the key interfaces between Blockchain and the airline business.

ConsenSys, Managing Director, Lory Kehoe

Norwegian Air Shuttle, EVP Strategic Development, Tore Østby

TravaCoin, Founder and CEO, Brian Whelan

OpenJaw Technologies CCO Bryan Porter believes the most significant change in the industry in the past two decades has been the customer. Customer expectations have changed significantly and he believes it is now not a question of whether to invest in new technology but how much and how we use the investment to achieve the maximum return in terms of value proposition taken to the consumer. He discusses how the company is building partnerships with airlines to support their retail strategies by using more readily available big data and technology and highlights how airline structures are beginning to evolve to meet changing customer expectations.

There are no more valuable market segments than the repeat travellers in corporate programmes and SMEs. Yet airlines have mostly failed to capitalise fully on these opportunities. Imagination, innovation and new technology are opening up new avenues for exploitation.

Understanding the needs of these segments more effectively – because they are part of the same economic environment and also feeling the pain – will pay dividends, both in the short and long term.

In a downturn, corporate travellers are increasingly vital but what do they want?
Corporate travel is the lifeblood of full service airlines and an increasingly high yield source of business for LCCs and hybrids. What’s more, in a downturn, it’s a more reliable and consistent source of traffic when leisure demand becomes more fickle. 

Moderator: Sixt Rent a Car, Managing Director, Growth, Lisa Akeroyd 
Panel:

• Air China, Vice President & General Manager, North America, Zhihang Chi
• American Express, Vice President, Travel Strategy & Partnerships, Johnny Thorsen
• CTM, Global COO, Laura Ruffles
• Microsoft, Global Employee Experience Lead, Julia Fidler

Combatting commoditisation is a constant battle. But there are many peripheral areas – most effectively around FFPs – available to airlines to expand their offerings. The list is long, and there are many variations on the theme, all of them involving direct additions to revenue, but more importantly capturing the loyalty of the passenger.

Moderator: On Point Loyalty, Managing Director, Evert de Boer

Panel:

• Amadeus, Senior Manager, Solution Management, Luca Balbiani
• Amazon Web Services, Head, AWS Travel, Massimo Morin
• Lufthansa Group, Manager Passenger Experience Design, Ole Lindner
• Saudia, VP Sales, Richard Nuttall
• Volantio, CEO, Azim Barodawala

As innovations affecting distribution increasingly challenge the status quo, opportunities abound for those airlines which have the flexibility and insights to understand the trends and the ability to adapt rapidly.

This can take the form of direct investment in resources and skills, as well as securing strategic technology partnerships with forward looking operators. The result: better merchandising opportunities and more effective marketing, at a time when players like google are taking on a dominant role.

Successfully delivering the 2020 vision

• What is the end point?
• What are the complexities of the process?
• What impact will this have on your bottom line?

Moderator: Travelport, Global Head of New Distribution, Ian Heywood
Panel:

• IATA, Director Industry Distribution Programs, Yanik Hoyles
• Farelogix, CEO, Jim Davidson
• OpenJaw Technologies, CCO, Bryan Porter
• SkyTeam, VP Customer Experience & Commercial, Mauro Oretti

There are one or two examples of effective airline groups, notably IAG. But other opportunities exist. The regulatory system limits options where international airlines are concerned, so an element of creativity is necessary – but that can lead to problems, as is evident from the present issues in Air France-KLM. Domestically the regulatory constraints don’t constrain multi-brand operations in the same way, yet few airlines have embarked on the opportunities that flow. Qantas/Jetstar is a prime example.

Moderator: John Byerly, Consultant, John Byerly

Panel:

• AAPA, Director General, Andrew Herdman
• Croon Callaghan Aviation Consulting, Partner, Jim Callaghan
• European Aviation Club, Chairman, Rigas Doganis

Large strides have been made in generating non-ticket revenues. Yet technological advances are making wider opportunities available. Not only new forms of distribution, but also using more straightforward methods such as incentivising staff and expanding the use of inflight wifi to generate totally new sources of income. A focus on enhancing customer experience rather than a reliance on unbundling also provides more attractive relationships.

Capturing more of the passengers’ travel wallet: Capturing more of the passengers’ travel wallet not only improves an airline's own economics but makes it more relevant to the passenger and hence improves their stickiness/loyalty (e.g. premium passengers are not just looking to reduce their air spend but their entire travel spend so if if airlines can leverage their buying power with hoteliers and other suppliers and offer good value bundled travel packages to their passengers through their holidays brand)

Maximising ancillary revenues: Given ancillary revenues are typically not part of the initial purchase decision they are more resilient than air fares. But they must be merchandised (right offering to the right person at the right time and at the right price) rather than merely being passively offered.

Moderator: APEX, CEO, Dr. Joe Leader
Panel:

• CellPoint Mobile, SVP, Head of Global Sales, Airline and Hospitality, Noel Connolly
• easyJet, Head of Proposition, Kim McDonnell
• PROS., Principal, Travel Division, Surain Adyanthaya
• Ryanair, CMO, Kenny Jacobs
• Sabre, VP & Regional General Manager, Alessandro Ciancimino

Airlines have limited options in removing costs in the face of downturn. One area for action is to revise network operations, even fundamentally redirecting strategy, particularly where new market directions are emerging, such as the impact of new aircraft types and new entrants. For this, management must ideally seek the engagement of labour, to ensure effective implementation.

With a great majority of costs both external and largely uncontrollable, reducing that one third of costs that relates to labour inevitably also comes under the microscope. In a reducing market there is often much pain to be shared, but intelligent and rational – ideally consensual – courses are available. These should take account of the short term need for action as well as providing that the patient will be healthy when it emerges from whatever surgery has been necessary to ensure survival.

Moderator: John Byerly, Consultant, Consultant, John Byerly
Panel:

• ALPA, First Vice President, Bob Fox
• CityJet, CEO, Pat Byrne
• European Commission, Director for Aviation, Filip Cornelis

There are ways of finding tailored options for working together through more challenging times. These imply relieving current financial burdens while preparing the way for a more valuable post-downturn relationship.

Some fresh thinking around the financial aspects of running an airline is urgently required. From payments to high finance, transformation is taking place in the way airlines tackle this side of their business. But who is ahead of the curve?

Moderator: CAPA – Centre for Aviation, Chief Financial Analyst, Jonathan Wober
Panel:

• Aircastle, EVP Porfolio Management, Paul O’Callaghan
• BOC Aviation, CCO, Steven Townend
• Embraer, SVP - Global Leasing & Strategy, Ron Baur

By virtue of its very nature the airline industry is highly dependent on partnerships of one kind or another. In times of stress, reliance on these partners – and enhancing shared goals – becomes a high priority. These partners range from all parts of the supply chain, notably airports, to fellow airlines and agencies.

• Have you got the right partnerships?
• Who you do business with can be a key determinant of success or failure.
• Undergoing a transformation can put pressure on business partners, suppliers and other stakeholders.

Moderator: Skylight Aviation, Senior Advisor and former easyJet Group Strategy & Network Director, Cath Lynn
Panel:

• Gatwick Airport, Head of Airline Relations, Stephen King
• Ryanair, COO, Peter Bellew
• Travelport, Global Head of Air, Travel Partners, Damian Hickey
• UATP, Commercial Director, Europe, Gabrielle Hoffman

As airlines are shackled to their nationality, globalising the product means a need for partnerships in one form or another. This in turn means interpreting existing and future attitudes of regulators in key markets, notably towards immunised JVs, but also lesser forms of presence-enhancing partnerships.

Moderator: Baker McKenzie, Partner, Kenneth Quinn
Panel:

• ERA, Director General, Montserrat Barriga
• European Commission, Director for Aviation, Filip Cornelis
• Star Alliance, CEO, Jeffrey Goh
• U.S. Department of Transportation, Director, Brian Hedberg