Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
0
The future of self-connect
and the implications for the Dutch aviation sector
Presented by:
Kata CserepVice President ICF International
18 May 2016
The Hague, Netherlands
11
Today’s Agenda
Self-connect today
Top candidates for growth
Dutch Aviation: threat or
opportunity?
Where next?
33
Why do people
self-connect?
Source: ICF internal survey, March 2016
0
1
2
3
4
5
6
7
8
9
Lower price Origin and/ordepartureairports
convenient forme
Needed totravel a route
with nothrough-ticket
optionavailable
Convenientschedule
Which factor was most important in your decision to make a self-connecting
journey?
0 5 10 15 20 25
Too expensive
Worried about making theconnection
Journey time too long
Didn't want to pick up and re-check bags at connecting airport
Didn't occur to me to look
Airline takes care when flight mis-connects
Simpler to book one-ticketconnection
Why didn't you buy two separate tickets?
Price
Market not served direct, online or interline
Schedule
Which factor was most important
in your decision to make a
self-connecting journey?
Why didn’t you buy
two separate tickets?
44
The traditional
connections market
in Europe is large,
despite increasing
direct services
Unique services are non-directional and excluding Russian domestic servicesSource: IATA PaxIS 2015, OAG Schedules
>500m intra-EUR journeys per year
42m (8%) journeys connect
Equivalent to 84m connecting airport pax or 168m total airport paxacross EUR airports
Non Stop92%
Cnx8%
>500m4.4k
5.4k
7.3k7.9k
0k
1k
2k
3k
4k
5k
6k
7k
8k
9k
2000 2005 2010 2015
4% CAGR
Intra-Europe Market
Unique Direct Services
2000–2015
Intra-Europe Market
Nonstop vs. Connecting Service
2015
55
Long-haul markets
have a higher
proportion of
connections
Source: : IATA PaxIS 2015, OAG Schedules
Market Size (M)
Non Stop 142
Conx in EUR 53
No Conx in EUR 64
Total 259
>250m extra-EUR journeys per year
117m (45%) journeys connect
Half connect at EUR end
Equivalent to 150m airport pax across EUR airports
1.0k 1.0k1.2k
1.3k
0k
1k
2k
2000 2005 2010 2015
1.7% CAGR
Non Stop55%
Cnx20%
No conx in EUR25%
>250m
Europe-Long Haul Market
Unique Direct Services
2000–2015
Europe-Long Haul Market
Nonstop vs. Connecting Service
2015
66
Self-connections
are estimated at
15m a year in
Europe
Source: CAA Survey, 2015
Independent LCCs are Ryanair, easyJet, Norwegian and Wizz
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
LGW STN MAN LTN BHX
Self Conx
Total ~3M
% of LCCs
self-conx
3.7%
UK SURVEY:
Survey Research on Conx Shares
Other airline market demand
c16mSelf Conx
airport pax
>220m Pax on top ‘independent
LCCs’
UK CAA surveys 100k+ passengers
~4% of independent LCC paxconnecting
Europe-wide 16m airport paxor 4m O&Ds EUR ESTIMATE:
Estimated Self-Connections, UK Airports
2015, In Millions
77
This represents
<10% of all transfer
pax or 1% of total
European airport
pax
0
100
200
300
400
500
600
Short Haul Long Haul
Non Stop Conx in EUR Conx @ Other Self-conx
Self connections 4M 16M
MarketO&Ds
EUR Airport
Pax
SH-SH Connections 42M 168M
SH-LH Connections 53M 150M
Non stop 630M 1,200M
2015 European Passenger
Market Summary
(O&D, Millions)
99
UNALIGNED CARRIERS
LONG HAUL LOW COST
NON HUB
Self-connect is
most likely to take
off at unaligned
carriers
Source: BP Statistical Review of World Energy June 2015, ICF International Analysis
Incremental passengers and revenue
are the name of the game…
…ideally without incremental cost
?
1010
Airports with certain
characteristics will
be best placed to
benefit
Source: ICF International Analysis
Identifying Suitable Self-Connect O&Ds
Self-Connection Opportunity
An acceptable connect time &circuity limit
If there is a short-haul leg, is it served by an LCC?
Will it work both ways...
...and on a reasonable number of
days
Price
Scale of network
Variety of business models, including LCC
Long haul helpful
Geography helpful
1111
Milan is an obvious
candidate for self-
connections
Source: ICF International analysis, PaxIS June 2016 schedules
132 destinations from MXP
17k theoretical connecting markets
2,500 with reasonable circuity and connection time
800 unique markets that work in both directions
360 more than 4pw
40% of these no direct service
13mppa in these O&Ds
SH57%
LH43%
Easyjet32%
Emirates5%
Lufthansa5%Alitalia
5%
Other53% 23m
seats
SH/LH Split of Self-Connection O&Ds
at MXP
No Direct Service
41%Existing
Direct Service59%
Top 360 Self Connections at MXP by
Addressable Market
Annual Seat Capacity
2015
Potential Self-Connecting
O&Ds
1212
….So is Gatwick
Source: ICF International analysis, PaxIS June 2016 schedules
188 destinations from LGW
36k theoretical connecting markets
5,600 with reasonable circuity and connection time
2,200 unique markets that work in both directions
900 more than 4pw
65% of these no direct service
30mppa in these O&Ds
SH53%
LH47%
SH/LH Split of Self-Connection O&Ds
at LGW
No Direct Service
65%
Existing Direct
Service35%
Top 500 Self Connections at by
Addressable Market at LGWPotential Self-Connecting O&Ds
Easyjet44%
British Airways
16%Norwegian
9%
Monarch5%
Other26%
44m seats
Annual Seat Capacity
2015
1414
Schiphol and KLM
and world class
aviation names,
dominating Dutch
aviation
Source: ACI, OAG
AMS 58mppa, 40% transfer
5th busiest airport in Europe
14th busiest airport globally
KLM 28mppa, 70% transfer
8th highest international pax
Netherlands49%
Europe 5%
MidEast 3%
Asia 16%
Africa 6%
NorAm 8%
LatAm 12%
KLM ASMs by Region, 2016
Klm-royal Dutch Airlines
(KL)49%
Home LCC (x1) 6%
Home FSC (x2) 1%
For. LCC (x12) 14%
For. FSC (x65) 30%
81
Airlines
AMS Airlines, 2016
1515
Schiphol accounts
for over 90% of
Dutch aviation
capacity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Other
Rotterdam
Eindhoven
Schiphol
Source: OAG
It’s not all about KLM at AMS….but it is pretty
much
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Other
Ryanair
Easyjet
Transavia
KLMCityhopper
KLM
LCC penetration remains low by European standards
Annual Seat Capacity in Holland Annual Seat Capacity in Holland
1616
LCCs are making
their mark outside
AMS but scale is
limited
Source: OAG, 2016
0
10
20
30
40
50
60
70
80
AMS EIN RTM
LCC
Other
21% 69%99%
Scheduled Seat Capacity by Airport, 2016
LCC
share
1717
Klm50%
Easyjet8%
Transav…
Delta5%
Other32%
Schiphol is not a
typical self-connect
airport….
Source: IATA PaxIS, OAG, ICF analysis
….but it offers significant self-connect
potential for passengers, mostly on long-haul
238 destinations from AMS
57k theoretical connecting markets
7,500 with reasonable circuity and connection time
2,400 unique markets that work in both directions
1,000 more than 4pw
50% of these no direct service
40mppa in these O&Ds
No Direct Service
67%
Existing Direct
Service33%
SH/LH Split of Self-Connection O&Ds
at AMS
SH30%
LH70%
Top 500 Self Connections by
Addressable Market at AMS
Annual Seat Capacity
2015
Potential Self-Connecting O&Ds
67m seats
1818
Taxation adds a
further element of
risk or opportunity;
depending on
where you are
Source: UK govt; France CAA, EBAA, ITA Matrix
Typical Aviation Taxes by Haul and Country of Departure
0
10
20
30
40
50
60
70
80
90
100
UK France Germany Austria Holland
Intra Europe Long Haul
Family of four travelling MAN – LAX to visit Disneyworld would save €200 in taxes by
flying over AMS rather than over LHR
2020
The LCCs are
evolving,
competing with
each other and
with legacy
carriers
Source: OAG Data, ICF International Analysis
Own metal Cnx
LCC Alliance in Asia
2121
ICF believes that
distribution and
risk sharing are the
key hurdles
Who will raise awareness and availability
of self-connections?
Meta search Airports Airlines OTAs Other??
Who will shoulder the risk of
missed connections?
Schedule risk
Lost bags
Directionality
Compensation (EC261)
Operating airline
Travel Agent
Airport
Third party insurance
Handling Agent
2222
Self-connections have always existed, mostly used by
independent, price-sensitive travellers on unusual itineraries
Technology, network densification and passenger acceptance are
leading to increased opportunities for self-connections
Some of this activity will compete with traditional connections;
some will lead to new demand
Largest opportunity at airports with network scale, large share of
LCC, some long-haul and helpful geographic location
Even hubs such as AMS may see some opportunity, especially in
the face of large taxation differences (e.g. ADP)
Although potential is significant, hurdles to large-scale take-up
remain and self-connect is not likely to replace traditional online
and interline connections any time soon
The key business decision for airlines and airports is whether this
is a threat or an opportunity and to plan accordingly
In Summary…
23
For questions regarding this
presentation, please contact:
Kata CserepVice President Airports
[email protected] +44 203 096 4921
18 May 2016
The Hague, Netherlands
THANK YOU!
With thanks to Nishaan Rama and Rob Walker, ICF
2424
ICF is one of the world’s largest and
most experienced aviation & aerospace
consulting firms
53 years in business (founded 1963)
100+ professional staff
− Dedicated exclusively to aviation
and aerospace
− Blend of consulting professionals and
experienced aviation executives
Specialized, focused expertise and
proprietary knowledge
Broad functional capabilities
More than 10,000 private and public sector
assignments
Backed by parent company ICF International
(2014 revenue - $1.05B)
Global presence –– offices around the world
New York • Boston • Ann Arbor • London • Singapore • Beijing • Hong Kong
Airports
Airlines
Aerospace
& MRO
Aircraft Asset
Advisory
joined ICF in 2011
joined ICF in 2007
joined ICF in 2012
joined ICF in 2014