Effective cost improvement is essential to any airline’s success story,
especially for FSCs to be able to match the LCCs in operating cost terms.
Airlines worldwide are making tough decision to cut costs, preparing for the rising fuel prices and intensifying competition that could contribute to lowering fares and hampering earnings growth.
Recently in December 2016, Etihad Airways was reported to be eliminating between 1,000-3,000 jobs across several units, highlighting the pressure on carriers to adapt to slowing growth after years of aggressive expansion. Cathay Pacific made an unusual move to cut back on deep-cleaning schedules from once every 14 days to once every 3-4 weeks, although the airline denied the move was a cost-cutting measure.
Other belt-tightening Asian FSCs are report to be considering cutting free in-flight booze, which has been standard on most of the continent’s long-haul carriers for decades.
Cutting jobs, monitoring cleaning schedules and dispensing with free services are not the only options available for airlines feeling the pinch. They could opt to raise prices (admittedly, this would seem controversial given the current climate), or for more progressive measures such as taking inefficient planes out of service and cutting unprofitable routes.
To help understand how airlines can effectively manage their costs, at Aviation Festival Asia 2017, Sam Issac, Director Finance & Strategy, SaudiGulf Airlines joins us to offer his insights.
Sam is an experienced international airline C-Level executive with a strong record in finance consulting work with major airlines Emirates, Etihad Airways, Saudi Arabian Airlines, SpiceJet, and Regent Airways.
Here’s a short abstract of his session:
Cost saved is profit earned: Cost management strategies for FSCs
- Control the controllable: Identifying the controllable cost is the most important but most challenging task in cost control. How to identify and analyse cost to the most detail level?
- Manage costs real-time: How to identify cost leakages real time to take pro-active steps to reduce its impact on the bottom line?
- Reorganising the underlying business and planning for commercial survival: How to further minimise losses and return to profitability?
- Worldwide case studies of airlines streamlining processes, enabling centralised cost control, and cutting overspends: What was the thinking behind each tough decision? What can we learn?
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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