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CAPA Americas Aviation Summit

Las Vegas, United States of America
11-12 Apr 2016
American Airlines CEO Doug Parker discusses profit sharing, investor metrics, earning employee trust and strategic relationships, including its partnership with Qantas.
Air China VP and GM North America Zhihang Chi outlines motivation for the launch of service from Shanghai to San Jose, the outlook for constrained bilaterals and the airline's relationship with Cathay Pacific.
Delta Air Lines General Counsel Peter Carter on the company's continued push on the Gulf subsidy debate and the timing for adoption of a new US-Mexico air services agreement.
ANA VP strategic planning, Americas Tadashi Matsushida offers insight into the airline's Pacific growth strategy and potential service between Tokyo and Mexico.
The evolution of global and bilateral alliances and the second coming of equity alliances. Are immunised airline JVs sustainable in the long term? Protectionism meets open skies: who wins?
Moderator: CNN, Anchor, Richard Quest
Panel Members:
  • A4A, SVP Legislative & Regulatory Policy, Sharon Pinkerton
  • Allied Pilots Association, Government Affairs, Captain Bob Coffman
  • ALPA, Executive Administrator, Captain Rick Dominguez
  • Delta Air Lines, EVP & General Counsel, Peter Carter
  • FedEx Express, VP & General Counsel, Rush O'Keefe
  • U.S. Department of State, Deputy Assistant Secretary for Transportation Affairs, Tom Engle
Predicting how international markets will perform, even in the medium term, is a treacherous business. For example, the recently-hyped high growth BRICs are hardly performing as projected. Three years ago Brazil was a market magnet; today it is the most notable fall from grace, mired in recession. Deciding on the criteria for a financially successful market presence clearly has to be about more than projected growth. Reducing the risk profile and optimising likely profitability in a market involves anchoring such features as codeshares, partnerships (alliances, equity or otherwise), competitive conditions, the route’s contribution to an airline’s network, even the security profile. Established routes such as the North Atlantic typically display lower risk, particularly where metal neutral JVs are in place, and are inevitably attractive. But they are relatively mature and will not enjoy the future growth rates of more risky markets of Asia Pacific and Latin America. For an airline to continue to grow – and be profitable – new markets must be found.
  • In trading off between risk and reward, where are the likely new expansion routes of the late 20-teens?
  • Does solid performance at home allow more risk taking in exploring new opportunities?
  • Is open skies an important feature in assessing new routes or growing them?
  • Will partnerships/equity investments characterise most future route expansion?
  • What different/similar considerations apply for freight markets?
Moderator: John R. Byerly, Consultant, John Byerly
Panel Members:
  • ALTA, Executive Director, Eduardo Iglesias
  • IATA, Regional VP, The Americas, Peter Cerdá
  • FedEx Express, Managing Director Regulatory Affairs, Nancy Sparks
  • Orlando International Airport, Senior Director, Marketing & Air Service Development, Vicki Jaramillo
  • U.S. Travel Association, Senior Director, Domestic Policy, Erik Hansen
Partnerships, JVs and equity stakes are in the strategic mix for American carriers wishing to tap into Asia’s growth. How are Asia’s airlines tapping into the Americas to expand their global footprints? What are the bilateral trends? US airlines often go outside traditional alliances in ensuring they have blanket coverage of Asia. What are the challenges of distribution in diverse Asian markets, to gain inbound traffic. How do you get the mix right?
Moderator: CAPA - Centre for Aviation, Executive Chairman, Peter Harbison
Panel Members:
  • Air China, VP & GM North America, Zhihang Chi
  • All Nippon Airways, VP Strategic Planning,The Americas, Tadashi Matsushida
  • Hainan Airlines, Vice President, Hou Wei
  • Korean Air, VP Sales & Marketing, North America, John Jackson
  • Las Vegas McCarran International Airport, Director of Aviation, Rosemary Vassiliadis
  • Travelport, VP Product & Marketing, Air Commerce, Ian Heywood
Leadership and a new growth paradigm. American Airlines CEO Doug Parker in a candid interview with CNN's Richard Quest.
Recorded at CAPA Americas Aviation Summit, 11-12 Apr 2016

ALPA Update

Air Line Pilots Association, Captain Rick Dominguez, gives insight into foreign ownership and control and the evolution of labour-management relations.
Canada’s aviation market is very different from its larger southern neighbour. It is a seemingly solid duopoly domestically and, unlike the US’ liberal policy, is a global standout for protectionism internationally. Attempted new domestic entrants have not been successful and Canada’s newly released policy document notes that "Canada is the only major air market without an ultra-low-cost carrier” and implies a move to allow 49% foreign ownership would help to rectify this failing; but meanwhile both Air Canada and WestJet have established long haul low cost operations. The policy document also raises the prospect of changes to airport ownership and control, a relatively innovative change. This would substantially alter the way the airports operate. To become more commercial, the airports may need to reclaim some of the traffic that is currently diverted over US hubs due to Canada’s restrictive access regime.
  • Is there room in Canada’s domestic market for new ULCC entrants?
  • How would the proposed new airport ownership policy change the aviation scenario?
  • Are consumers’ interests adequately represented in the Canadian system?
  • Does Canada’s international aviation policy best serve its national interest?
Moderator: University of Winnipeg, Associate Professor, Faculty of Business & Economics, David Duval
Panel Members:
  • InterVISTAS, Chief Economist & Chief Strategy Officer, Mike Tretheway
  • NewLeaf Travel Company, President & CEO, Jim Young
Shareholders have been the main beneficiaries of the outstanding profits of the past two years. Pilots and other staff have also participated in the upside. How that occurs varies from airline to airline; some deliver bonuses, others prefer salary increases. But whatever the delivery mode, there is a rising tide of belief that a new phase has been reached, and that the privations of the past decade of bankruptcies and wage declines now need to be redressed. This can create issues for management, well aware of how capricious the external environment can be. Raising benchmark salaries in good times has arguably led to vicious downward cycles in past decades. But management through these times has frequently been lacking in long term direction. Today’s unions are increasingly well educated in the need for cooperative action. Can the current tide be effectively navigated, while satisfying increasingly voracious investors/analysts?
  • Some US pilot contracts have been rejected in the past two years due to unhappiness with profit sharing and work rules, rather than pay rates. It is hard to discern patterns in voting on different issues. Where are we headed in the coming cycle of negotiations?
  • Metamorphosis of Pilot relations: Is it, simply the passage of time, or is it company size – as you get bigger people lose personal contact? How much is the result of internal union ambitions?
  • Is there a “fair” distribution of benefits between employees and shareholders?
Moderator: Cowen & Company, Managing Director, Helane Becker
Panel Members:
  • Allegiant Travel Company, SVP Planning & COO, Jude Bricker
  • Allied Pilots Association, Government Affairs, Captain Bob Coffman
  • ALPA, Managing Director, David Krieger
  • Association of Flight Attendants, International President, Sara Nelson
  • Southwest Airlines, Senior Director Labour Relations, Naomi Hudson
Hainan Airlines president Hou Wei discusses the importance of the North American market and the performance of the airline’s new Shanghai base.
Association of Flight Attendants International President Sara Nelson shares her views on obstacles to changing the relationships between airline management and employees, and progress on flight attendant negotiations at United Airlines.
Recorded at CAPA Americas Aviation Summit, 11-12 Apr 2016

ALTA Update

ALTA Executive Director Eduardo Iglesias offers insight into prospects for further LCC growth in Latin America, the planned joint venture between LATAM Airlines Group and American Airlines and key issues facing airlines operating in the Latin American market.
NewLeaf Travel Company President & CEO Jim Young discusses the company’s approach to adopting the ultra low cost model in Canada and the outlook for the summer travel season in Canada.
Search: It’s where customers begin their journey, searching for their flights. What's the new dawn of search? Staying efficient: How can airlines cater to the growing demands of connected travellers, particularly corporate travellers? Is the answer in the cloud? Channel churn: What are the implications for airlines as the cost of distribution and revenue model changes, as more people move to meta-search and mobile?
Moderator: MW Travel Consultancy, Principal, Martin Warner
Panel Members:
  • Amadeus IT Group, VP Airline Commercial, John Dabkowski
  • Korean Air, VP Sales & Marketing, North America, John Jackson
  • MTT, Director of Consulting & Digital Insights, Glenville Morris
  • Orlando International Airport, Senior Director, Marketing & Air Service Development, Vicki Jaramillo
  • SAP Mobile Services, Senior Director Value Services, Johnny Thorsen
  • UATP, Manager, Product Development, Rachel Morowitz
Las Vegas McCarran International airport Director of Aviation Rosemary Vassiliadis talks about growth prospects in 2016, and the airport’s pursuit of additional service from Asia.
Allegiant Travel Company SVP Planning and COO Jude Bricker discusses the company’s continuing expansion into medium sized markets and current pricing trends.
Allied Pilots Association government affairs representative Bob Coffman examines ways to sustain favourable labour relations and the proposed profit sharing scheme from American Airlines’ management.
Amadeus IT Group VP Airline Commercial John Dabkowski discusses the spread of fare families to online travel agencies.
CAPA TV
Recorded at CAPA Americas Aviation Summit, 11-12 Apr 2016

SAP Update

SAP Mobile Services Senior Director, Value Services Johnny Thorsen offers perspective on catering to the growing demands of connected travellers and predictions for the future of airline distribution technology.
Disrupting ‘sameness’: What can airlines do to differentiate and create new customer value propositions? Owning the customer journey: Do airlines have to become shrewd retailers to maximise revenue from every seat? Getting the right internal structure to shift data from the IT geeks to the business strategists: Airlines are sitting on mountains of data and discovering a strategic opportunity
Moderator: McKinsey & Company, Partner, Will Coleman
Panel Members: 
  • ADARA, SVP Business Development, Tobias Wessels
  • Allegiant Travel Company, SVP Planning & COO, Jude Bricker
  • Chubb, SVP Global Head of Travel Insurance, Alex Blake
  • Hertz Global Holdings, VP of Merchandising & Ancillary Revenue, W. Brian Casebolt
  • Travelport, VP Americas, Chris Engle