A New Unified Industry Seminar for: Wired in Travel

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A New Unified IndustrySeminar forWired in
Travel

• November 2007

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The Aviation Business used to be easy to
categorize
Unit Costs
TraditionalNetworkCarriers
Yield
EfficientLow CostCarriers
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The Aviation Business used to be easy to
categorize
Unit Costs
TraditionalNetworkCarriers
Old, Out-dated,Unprofitable,Have Nots
Yield
EfficientLow CostCarriers
New, Up to Date, Profitable, Haves
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Then the Network Carriers started attacking
unit costs
Unit Costs
High Utilization,Fleet StandardizationValue
Added Services
TraditionalNetworkCarriers
Yield
EfficientLow CostCarriers
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And LCCs started concentrating on yields
Unit Costs
TraditionalNetworkCarriers
Yield
EfficientLow CostCarriers
Wider Distribution,More complex
pricing,Revenue Management
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Network Carriers loosened the networks
Unit Costs
Hub De-peaking,Point-to-Point,Rapid Turns
TraditionalNetworkCarriers
Yield
EfficientLow CostCarriers
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And LCCs introduced more complex networks
Unit Costs
TraditionalNetworkCarriers
Yield
EfficientLow CostCarriers
Long-haul Operations,Alliances,Higher Service
Levels
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But, capital requirements and costs skyrocketed
Unit Costs
Capital Requirements
TraditionalNetworkCarriers
EfficientLow CostCarriers
Yield
Fuel Hedging Capital,Fleet Financing,Sharehold
er returns
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The Aviation Business really only has one model
now
Unit Costs
Capital Requirements
Not That MuchDifferenceAnymore
TraditionalNetworkCarriers
EfficientLow CostCarriers
Yield
Fuel Hedging Capital,Fleet Financing,Sharehold
er returns
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In the future, Aviation will split into Market
Segments
Frequency
BudgetAirlines
BusinessAirlines
Service
VIPServices
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But the finances, will not be a lot different
Unit Costs
VIPServices
BusinessAirlines
BudgetAirlines
Yield
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But the LCC Badge will Stick for investors
Frequency
LCCs
BudgetAirlines
BusinessAirlines
Service
VIPServices