Roman Orlik, IATA draft... · · 2017-11-22AIRLINE INDUSTRY: GLOBAL AND REGIONAL VIEW Roman Orlik, ... India 20,319 6.3% 2 Mexico - US 18,858 3.0% ... different form of reports

ECONOMIC PERFORMANCE OF THE AIRLINE INDUSTRY: GLOBAL AND

REGIONAL VIEW

Roman Orlik, IATA

November 17INAIR 2017 Prague 1

IATA 20 year passenger forecast:

7,200,000,000


Aviation’s center of gravity is shifting eastwards


TOP 10 Country pairs Additional x thousand pax per year by 2035 Annual % growth

1 UAE - India 20,319 6.3%

2 Mexico - US 18,858 3.0%

3 Korea - China 17,704 4.0%

4 Malaysia - Indonesia 16,560 6.7%

5 China - Taiwan 15,791 4.2%

6 Saudi Arabia - UAE 14,532 7.7%

7 Thailand - China 13,610 3.9%

8 Hong Kong, SAR - Chinese Taipei 13,275 5.5%

9 Canada - US 13,084 2.2%

10 Singapore - Indonesia 12,800 5.7%


Long-run outlook for air passenger demand


Air passengers volumes ( RPK)


RPK growth by route and market - YTD


The changing face of air pax demand


Ageing populations to constrain pax growth in E.Europe


Varied outlook within Emerging Europe (1)


4.8%

3.7%

3.0%

2.9%

2.8%

2.1%

0% 1% 2% 3% 4% 5%

Turkey

Czech Republic

Hungary

Russia

Poland

Romania

Average passenger growth rate (2016-2036, % CAGR)

Varied outlook within Emerging Europe (2)


77

77

27

15

13

11

196

138

48

22

26

21

0 25 50 75 100 125 150 175 200

Turkey

Russia

Poland

Romania

Czech Republic

Hungary

2016 2036

Million O-D passenger journeys (to, from and within)

Aviation impact on economy� Direct: the output and employment of the firms in the aviation sector.

� Indirect: the output and employment supported through the aviation sector‟s Czech based supply

� Induced: employment and output supported by the spending of those directly or indirectly employed in the aviation sector

� Catalytic: spillover benefits associated with the aviation sector.

Connectivity as the key factor to economic performance


Airport issues


Implications for airlines and key stakeholders

� Complex process – myriads of factors

� Data excess– correlation and causality issues

� Variable trends and external shocks

� Digitalization and customers behavior change

� Transparency – pricing, fees, duties

Complexity


Areas revenue management must consider

� Data collection and analysis

� Protection, forecast and optimization process

� KPI set up and forecast validation ( SLF on highest levels: above 80% except Africa)

� Revenue management vs commercial view paradigm– Human machines

� Market segmentation

� Distribution channels efficiency


Main KPI’s to check


Example: RASK analysis on PRG-MAD


Data sources

� Own database – historical data

� Market intelligence – different form of reports (PEST analysis)

� Industry economic data ( macro) – OECD, Eurostat, WTO

� Business intelligence products

� PAXIS – BSP data only ( book to travel)

� DDS – the PAXIS upgrade with direct sales information

� Airs@t – marketing database

� MIDT different methodology

� OAG – schedules

� Flight global stats – aircraft history, all leasing data, schedules ect

� WATS economic database and reports


DDS database – market share


Revenue and Traffic Analysis


Sales curve – days to departure


Customers behavior


Customers – what they want and how to keep them loyal

� Ticket price – 45% weight in Africa, 30% in Asia, where schedule seems

to be more important

� No surprise that for 46% leisure pax the price is critical compared to

28% for C-class pax, who, naturally, prefer the schedule and

punctuality.

� Gender split: price - ( 43% women vs 34% men), schedule ( women

13% vs 17% men)

� Airs@t respondents age: the older pax are the less price sensitive ( 47%

for 18-24 years old vs 30% 55-64 category) and more comfort

demanding they appear to be ( 13% vs 24% ).

� And what is the least important?.


Technology adoption and innovations� Self service - Booking process & NDC

� Fast travel program

� Baggage RFID – full control of your baggage

� Big data – pros&cons

� Mobile services

� Biometrics

� Face recognition

� Flight updates

� Digital concierge


Thank you for your attention

Questions?

Contact: [email protected]


Roman Orlik, IATA draft... · · 2017-11-22AIRLINE INDUSTRY: GLOBAL AND REGIONAL VIEW Roman Orlik, ... India 20,319 6.3% 2 Mexico - US 18,858 3.0% ... different form of reports

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