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Suresh NairRegional Manager, India, Sri Lanka & BangladeshAirAsia Group
World’s Best Low-Cost Airline2009-2010-2011
How LCCs can open up the African Aviation Market
The Air Asia Perspective
World’s Best Low-Cost Airline2009-2010-2011
3
How we did it…
…the AirAsia Story
How we did it: The AirAsia story
December 2001 Tony Fernandes takes over AirAsia with two ageing 737-300 & USD 11 mill in debts for a token 1 Ringgit (USD 26 cents).
Today in 9 years AirAsia with 105 Aircraft operates more then 140 routes to 78 destinations in 27 countries.
Vision to be the largest Low-Cost Airline in Asia serving 3 Billion people.
With the Tag line “Now Every One Can Fly” . AirAsia was established with the dream of making flying possible for literally everyone.
50% of AirAsia travelers are first time flyers.
How we did it: The AirAsia story
2004 2 JVs Thai Air Asia based in Bangkok & Indonesia AirAsia based in Jakarta formed leading to exponential growth.
2007 the First Long Haul Low-Cost model is launched with the start of AirAsiaX on long haul routes.
In the pipe line Vietjet AirAsia based in Hanoi & AirAsia Philipines based in Clark.
Success Strategy
Innovative solutions.
Cost efficiencies.
Passionate approach to business.
CAN DO SPIRIT .
TEAM WORK.
Success Strategy
Safety First.
High Aircraft utilization- Turnaround time of 25 min (avg. Aircraft utilization 13 hours a day).
Low Fares no frills-Guest are given choice of customizing services .
Worlds lowest operating cost.
Lean distribution system.
Point to Point Network.
Average volume post-AirAsia entry
* AirAsia commenced service to Phuket in December 2003 Source: Malaysia Airports Holdings Berhad
Market volume pre-AirAsia entry
LOW COST CARRIERS PROVEN TO STIMULATE DEMAND
GROWTH OF PASSENGER TRAFFIC VOLUME (KUALA LUMPUR – PHUKET)
Q4-03
Q1-04
Q2-04
Q3-04
Q4-04
Q1-05
Q2-05
Q3-05
Q4-05
Q1-06
Q2-06
Q3-06
Q4-06
Q1-07
Q2-07
Q3-07
Q4-07
Q1-08
Q2-08
Q3-08
Q4-08
Q1-09
Q2-09
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Examples of phenomenal growthKUL – Phuket grown by 172%
Average volume post-AirAsia entry
* AirAsia commenced service to Shenzhen in July 2007 Source: Malaysia Airports Holdings Berhad
Market volume pre-AirAsia entry
LOW COST CARRIERS PROVEN TO STIMULATE DEMAND
Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 -
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Examples of phenomenal growthKUL – Shenzhen grown by 210%
Our Network
This… Time for Africa !!
56 countries.
1.05 billion people, more than half under the age of 25.
2,436 airports.
Approx. 600+ aircraft.
Average economic growth of 5.5%.
Boeing & Airbus predict between 700 – 1270 aircraft requirement till 2028 for Africa.
Of CAPA’s 6 designated ‘Hottest Airlines of 2011’ for Africa, 3 are LCCs.
Exports and related business travel, tourism will be the key drivers for Africa in the next decade.
Opportunity Africa !
Size of market and location of key cities make it a natural market for LCCs.
The fastest growing airlines in Africa are all LCCs (Air Arabia Egypt, Air Arabia Morocco and 1Time).
Why LCC?
The way forward…
Possible hubs in Africa for LCCs
Johannesburg Casablanca Cairo Nairobi Addis Ababa Lagos
LCC – Africa’s need of the hour
AirAsia Berhad
AirAsiaX Sdn Bhd
Thai AirAsia
Indonesia AirAsia
Next stop: Africa?
An example of LCC connectivity
Dakar
Freetown
Abidjan
Douala
Accra
JNB Entebbe
Djibouti
Khartoum
Dubai
Cairo
TripoliAlgiers
Lagos
For short haul/regional LCC
Connect intra-African points
Promote regional tourism, trade
Stimulate demand by ensuring high frequencies between national capitals and key cities
Develop local infrastructure and ancillary businesses such as hotels, surface transportation and entertainment
Provide employment generation opportunities
For long haul LCC
Replication of an AirAsiaX model that connects key gateways and cities with Europe, Far East, Gulf & Middle East and the Americas.
Offer of unbundled services very attractive to the price consicous business traveller.
Highly competitive prices as compared to full service carriers.
Simpler processes and greater distribution reach through greater use of web technology
16
Ample opportunity
Open Skies and Liberal bi-lateral agreements between countries in Africa.
Low-Cost Airports.
Trained personnel specially Pilots/Engineers.
Marketing of Africa as one BIG tourist destination.
What we Need
For AfricaSky is the Limit…
Thank You