low cost carriers – boon or bane? events/waga2011/presentations/… · ys fl united states north...

David Stroud1st November 2011

Low Cost Carriers – Boon or Bane?

Introductions

• EVP Airports - UBM Aviation

• Routes events - at interface between airports and airlines

• Background in Airport Consulting, Airport Management

• Today’s perspective - the side of the opportunity

LCC’s - Boon or Bane?

• Why are we still asking this kind of question?

• LCC’s a reality

• Amongst largest airline brands globally

• For many airports, the largest customers

• Level the same question to all types of airlines

CC Facts and Figures - World s Top 10 Airlines, Pa

s DL United States North America Mainline 162

lines WN United States North America Low cost carrier 882

nes AA United States North America Mainline 86

rn Airlines CZ China Asia Pacific Mainline 764

FR Ireland Europe Low cost carrier 72

M Group France Europe Mainline 713

n Airlines MU China Asia Pacific Mainline 649

LH Germany Europe Mainline 589

s UA United States North America Mainline 540

Source - RATI, IATA 2010

g p ,

s DL United States North America Mainline 162lines WN United States North America Low cost carrier 882nes AA United States North America Mainline 861rn Airlines CZ China Asia Pacific Mainline 764

FR Ireland Europe Low cost carrier 721M Group France Europe Mainline 713

n Airlines MU China Asia Pacific Mainline 649LH Germany Europe Mainline 589

s UA United States North America Mainline 540US United States North America Mainline 518U2 United Kingdom Europe Low cost carrier 488AF France Europe Mainline 470CA China Asia Pacific Mainline 462

n Airways NH Japan Asia Pacific Mainline 457QF Australia Asia Pacific Mainline 444

rlines CO United States North America Mainline 435Corporation Japan Asia Pacific 419

nes OO United States North America Regional 404JL Japan Asia Pacific Mainline 347

éreas JJ Brazil Latin America Mainline 345AB Germany Europe Low cost carrier 335

éreas Inteligentes G3 Brazil Latin America Low cost carrier 329ays Holdings United States North America Regional 319

EK United Arab Emirates Middle East Mainline 314s BA United Kingdom Europe Mainline 305s (THY) TK Turkey Europe Mainline 291

c CX China, Hong Kong Asia Pacific Mainline 267ys FL United States North America Low cost carrier 247ys B6 United States North America Low cost carrier 242

g

Source

LCC’s share of intra-regional capacity globally now 27%LCC annual growth of 15% over last 10 years 3% for legacy carriers

g

Source

LCC’s share of international capacity globally still modest at 8% but share

Source -

LCC’s share of Europe and Americas market 30% +Ryanair now 9% of Intra-Europe capacity

Southwest share of USA market grown from 14%-18% since 2005Westjet now 26% of Canada market

In India LCC’s share grown from 17% in 2005 to 47% of all seats in 2011

g g p y

Sourc

g y , p

Source

UK is largest source of LCC capacity but growth rate 4%German decline due to environmental tax?

g ,

Source

g y ,

Source

LCC Boon or Bane? The side of the opportunity

Fastest opportunity for new routes, traffic growth at regional airports

Prover of markets

Long haul LCC brand attraction

New connectivity

Force airports to be commercially creative, new relationship with passeng

The market disruptor, demand the breaking of conventions, bringing forwa

new custom and practice

Opportunities in differentiation

LCC Boon or Bane? Predictions

One day the largest airline in the world will be an LCC brand

One day all countries largest airlines will be LCC’s

Most connections will be self-built

One day Airports will collect charges directly from passengers

One day passengers will choose which airport facilities they use, not airlin

One day Airlines will operate at Airports free of charge!! (Maybe Airports w

Airlines to fly!!)

One LCC’s will be regarded as legacy airlines, a new disruptor will take th

place.

LCC - Boon or Bane?

Thank You

David StroudEVP AirportsUBM Aviation

david.stroud@ubmaviation.com