Wednesday, December 05, 2007

Future of Air Transport Conference

I have been fortunate enough to attend iea’s Future of Air Transport in London this week (click here). As with the majority of other industry conferences there is limited new information to gain, but one can get deeper, more subjective insight into issues from those that may be directly involved

Here are some highlights that were gathered:

  • Rigas Doganis stressed among other things that legacy carriers must look at price simplification (e.g. SAS, Air Canada, Aer Lingus) to reduce complexity and challenge LCCs
  • Dermot Manion, Aer Lingus, spoke about their up and coming web-link with JetBlue, which will allow a passenger to purchase LAX-DUB in a single transaction, though it was not clarified whether there would be an interline agreement and what solutions will be offered in the event of irregularity.
  • The managing director of Zoom UK spoke how 15% of long-haul low-cost passengers are already connecting of their own accord, which is interesting to point out that passengers will work around obstacles if necessary. At a low enough fare passengers are willing to gather their bags and check-in again; the transfer time may be 2-3 hours but passengers do not mind if the fares are low enough. The MD also discussed how the airline found a solution to the problem of having capacity in the Canadian winter but no destinations, since southern routes were already full. The airline opted to start a UK operation and shift capacity to the UK during the winter and operate to leisure destinations from Europe. Flexible and innovative solution to a seasonal problem.
  • The discussion regarding the 2nd stage of Open Skies was very lively and interesting. It was concluded that the EU may place their demands too high by expecting cabotage, while US carriers have already obtained what they wanted: LHR access. The final winner in the end is the consumer though.
  • Simon Lilley of flybe gave a fascinating presentation regarding the carrier’s transformation from a struggling regional into a hybrid low-cost regional. One ear-perking comment is the interest by the carrier to expand their business model to other regions on continental Europe, such as France, Italy, or the Nordic countries.
  • Continental Airlines has a Senior Vice President of Customer Experience, which is a fascinating title within an airline. This signals the emphasis the airline has on the product delivered to its customers.
  • Air Berlin’s global expansion and its segmentation will be in premium and leisure. Air Berlin will focus on premium traffic to the US and Asia, while LTU will provide operations for the leisure segments to the Southeast US and South African destinations.
  • The presentation by Car Trawler drove home the understanding that Ryanair is a low-fare airline but a premium marketplace. The airline has some of the lowest air fares but some of the highest car rental fees; a balance of the two is a successful formula.

There were many more presentations from companies such as Emirates, Ryanair, Car and Trawler. And to the end the day I noticed that at CPH they have placed a lighted Christmas tree offset from the runway; great little touch from the airport.

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