The structure of full-service carriers is expected to change significantly in coming months as they revisit their business models in order to remain commercial viability.
Over the past decade, the average airline returns were rarely as high as the industry’s cost of capital, until the turn of 2014, since when we’ve seen the industry reporting three years of positive results.
Nevertheless, profits may be insufficient to cover the cost of capital in the coming years and full-service carriers still face critical challenges, given the overall weakness of the global economy, LCCs undermining legacy carriers’ in short-haul markets and the impact of the rapid expansion of Gulf carriers on their long-haul markets.
This is striking as FSCs are working in the growing air travel industry, yet not growing at the pace of the industry. In terms of competitiveness, they are lagging behind their competitors and their cost structure is still too high. There’s still work to do and at Aviation Festival Asia 2017, we look at how FSCs are responding to these challenges.
At the start of the Aviation Strategy track focusing on business strategies for FSCs at Aviation Festival Asia 2017, we invite Richard Nuttall, Vice President, Commercial Transformation, Saudia Airlines to cast his views on the FSC business models.
Richard is an experienced international airline C-Level executive with a strong record in delivering turnarounds. His airline experience ranges from a world-class Asian airline (Cathay Pacific and Philippine Airlines), to major regional carriers (Royal Jordanian Airline and Kenya Airways), and from the biggest 747 freighter operator (Atlas Air) to an LCC (Bahrain Air).
His major career achievements include restoring Philippine Airlines from impending bankruptcy (US$2.2B debt on US$1B annual revenues) to operational profitability, as well as delivering a huge turnaround at Royal Jordanian Airlines in 2015, generating the best results for many years in the face of major regional turbulence, lost key routes and reduced visitor arrivals.
Having seen the ups and downs of airline industry worldwide, he will share with us on how the FSC models are changing to be more competitive in the following presentation. Prepared to take a lot of notes from his insights.
Airlines in transition: How the FSC models are changing to be more competitive
- Biggest issues in the outlook for FSCs in 2017 and beyond
- Do we need to reinvent the FSC business model? If yes, how should we do that?
- How can FSCs regain short haul share from LCCs?
- How have the long-haul low-cost LCCs affect FSCs’ behaviours in the market?
- Comoditisation is a big challenge for airlines and a race to the bottom on fares benefits no one: How to differentiate your airlines? How to create values that customers appreciate and pay for?
Check out our website here to see how you can get involved.
Want to join us as a guest speaker? Email me at email@example.com
About Aviation Festival Asia
Now entering its 13th year, Aviation Festival Asia is one of the largest and most well-established commercial aviation shows for airline and airport executives from both the Asia Pacific region and across the world. In 2017, we are expecting to welcome over 2,000 attendees to the event, with over 900 airline executives across 7 premium conference tracks covering full service and low cost airline strategy & business models, passenger experience, marketing, IT systems, retail, human capital and more. Book your ticket now
(*) See IATA Report