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2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE - June 13, 2013 ...

2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE - June 13, 2013

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  • 1. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE ‘JOIN THE DEBATE’ BUSINESS AVIATION PROSPECTS AWAKENING AFRICA’s SLEEPING GIANT… 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE © 2013 1BlueHorizon Group - www.1bluehorizon.com 01BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved June 2013 The ‘idea factory’ thinking ahead strategies www.1bluehorizon.com
  • 2. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE The aim of today presentation is to enhance our knowledge about the African market to be able to assess potential opportunities in Africa F a c t ‘Aviation can be a vital catalyst for Africa’s Economic & Social Development’ D i l e m m a s Some African Governments are reluctant to cede control to truly autonomous National Civil Aviation Authorities… © 2013 1BlueHorizon Group - www.1bluehorizon.com 11BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Aviation Authorities… Can a developing country promote ‘Open Skies’ and still protect its own Airline Industry? Africa has made some headway in implementing Air Transport liberalization, but still has much to achieve… Full implementation of the Cape Town Treaty that gives Aircraft Lessors and Lenders the ability to repossess their assets worldwide in the event of default with Aircraft Collateral Assurance, 60 Day Repossession and Governments Support… Lack of fixed-base operator (FBO) to ease business aviation operations (crucial matter of attractiveness) and maintenance, repair and overhaul (MRO) facilities…
  • 3. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Awakening Africa's sleeping giant is still to be considered as developing economies region (continent) with a few exceptions Advanced Economies – Post-industrial countries characterized by high per-capita income, highly competitive industries, and well-developed commercial infrastructure. Emerging Markets – Former developing © 2013 1BlueHorizon Group - www.1bluehorizon.com 21BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Former developing economies that have achieved substantial industrialization, modernization, and rapid economic growth since the 1980s. Developing Economies – Low-income countries characterized by limited industrialization and stagnant economies.
  • 4. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Awakening Africa's sleeping giant potential is tremendous with the travel within Africa increasing by 30% in the last ten years Opportunities: – Economy forecast to grow to $2.6 trillion in 2020 from $1.6 trillion in 2008 – Growth in: mining, agriculture, development of ports, roads, and other infrastructure – From 2000 to 2010, foreign direct investment increased six fold to $58.56 billion – Large & Growing Population Challenges: – Poverty © 2013 1BlueHorizon Group - www.1bluehorizon.com 31BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved – Poverty – Mainly Small & Weak National Economies – Low Per Capita Income – Political Instability & Conflicts in Several Countries – Africa ranks low on World Bank’s Ease of Doing Business survey Aviation sector baseline: – Little Disposable Income for Air Travel & Tourism, etc. – Africa is an underserved market where tickets sell at higher fares compared to other markets (Government-Regulated) – Traffic is increasing due to more entrepreneurs doing business abroad – Gradual improvements to Africa’s aviation infrastructure Source: © 1BlueHorizon Group | Management Consulting Research & Analysis
  • 5. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Developing business within the awakening Africa's sleeping giant might be very challenging and required a long term investment commitment Political instability Looking to take immediate profit (upfront…) Weak Intellectual Property protection Bureaucracy and lack of transparency Dual economy / contrasts Accessing capital Partner availability and qualifications © 2013 1BlueHorizon Group - www.1bluehorizon.com 41BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Partner availability and qualifications Finding the right physical resources (office space, utilities, etc.) Understanding local consumers Understanding and working with Family Conglomerates Source: © 1BlueHorizon Group | Management Consulting Research & Analysis
  • 6. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Africa’s Aviation Industry: Challenges and Opportunities The performance of the African aviation industry is still lagging behind those of the rest of the world. Nonetheless, demand for air transport has increased steadily over the past years with passenger numbers and freight traffic growing by 45% and 80%, respectively. Over the period 2010-2015, Africa will be the third fastest growing region in the world in terms of international traffic with an average growth rate of 6.1% compared to the global average of 5.8%. This trend is expected to continue in the coming years due to a number of factors, notably robust economic growth, demographic boom, increasing urbanization, and emergence of the middle class. Air transportation plays a vital role in the country’s growth 5.8 7.9 6.9 6.1 5.8 5 4.9 0 2 4 6 8 10 Global Middle East Asia Pacific Africa Latin America Europe North America Aviation industry growth (2010- 2015) © 2013 1BlueHorizon Group - www.1bluehorizon.com 51BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved class. Air transportation plays a vital role in the country’s growth process by accelerating convergence of goods and persons. East Pacific America America Growth in air transportation has directly maps into economic growth due to spillover effects through creation of direct and indirect jobs in the industry and other auxiliary sectors such as tourism and other service sectors. Expansion in air transportation creates market opportunities for local entrepreneurs by creating regional and global economic centers. In 2010, the aviation industry in Africa supported about 7 million jobs (including 257,000 direct jobs) through the impact on travel and tourism which translated into USD67.8 billion of the continent’s GDP. Forecasts indicate that the aviation industry’s impact on African economies is set to grow. Over the next 20 years, implied job creation by the industry is projected at 1 million. Africa can maintain the growth of its aviation industry if more and more people can afford to pay for the cost of air travel. Currently, only 10% of Africans travel by air but given the current rate of economic growth and emergence of the middle class, there be high demand for services linked to air transportation.
  • 7. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Challenges: The rapid expansion in Africa’s aviation industry is hampered by a number of factors The main constraints the industry is facing are : - poor record of safety and security; - lack of adequate resources and infrastructure; - distance and limited connectivity; - lack of regulation and government actions. These constraints add to competition and high operating costs resulting from surging oil prices. Addressing these challenges could significantly unlock the industry’s potential for future growth. © 2013 1BlueHorizon Group - www.1bluehorizon.com 61BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved A recent report on 24 African States sponsored by the African Union, the African Development Bank, the Development Bank of Southern Africa, the Infrastructure Consortium for Africa, NEPAD and the World Bank ‘estimates that US$93 billion are needed annually over the next decade, more than twice what was previously thought’, to fund infrastructure and other development. A substantial amount of this would be required in the capital-intensive aviation industry, therefore it is critical that African countries invest in those infrastructures... The industry is still not the top priority of African governments. More, some African governments are still reluctant to open their skies fearing foreign competition could undercut national airlines. Source: : The Wall Street Journal June 2nd 2013, 1BlueHorizon Group | Management Consulting Research & Analysis
  • 8. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Opportunities: Nowhere is the potential for aviation greater than on the continent of Africa Nowhere is the potential for aviation greater than on the continent of Africa – the home to a billion people spread across 20% of the world’s land mass. Air travel is essential to the prosperity of Africa as it opens up opportunities that did not exist before. Fostering the African aviation industry may be one of the driving forces of regional integration on the continent. Better connected African countries and regions through a viable air transport industry could be the catalyst that can boost intra-African business, trade, tourism as well as cultural exchange. © 2013 1BlueHorizon Group - www.1bluehorizon.com 71BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved cultural exchange. Developing the aviation industry may also represent an opportunity to mitigate chronic transport problems faced by the 16 landlocked African countries. World class safety is possible in Africa and various organizations support their commitment to achieving it by 2015. It will also be a time to remind governments of the many challenges that stand between African aviation today and its potential to drive growth and development – from high costs and taxes, to inadequate infrastructure and unreliable fuel supply… Without any doubt, Africa is a sleeping giant awakening too slowly… Source: 1BlueHorizon Group | Management Consulting Analysis
  • 9. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE General aviation services provider are already active to awake Africa's sleeping giant – transforming marketing events to results might take time Vista Jet promoting their services to Government representatives during a road show in various African countries, here in Kinshasa (DRC) early 2013 (Illustrative) © 2013 1BlueHorizon Group - www.1bluehorizon.com 81BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved ExecuJet Promotes Futuristic Jet Travel to World Cup VIPs for VIPs and sporting personalities passing through its FBO in Cape Town, South Africa
  • 10. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Indisputably the role of business aviation in Africa's economy will grow in the coming years as GDP and other parameters improve Drivers of Business Aviation in Africa… Business aviation has been defined as that part of general aviation that focuses on the business use of aircraft. This excludes regular scheduled airlines and military operations. The raison d'être of business aviation is ‘the need for fast, flexible, safe, secure and cost-effective access to destinations across the country and around the world’. Perhaps, one of the major drivers of business aviation in Africa is, or ought to be flexibility. Business aviation in Africa has continued to grow even though figures may not readily available. However, the African air transport industry is poised for growth of averagely 5.5% in the years to come and many believe this growth should also be felt on the business aviation side of the industry in the same proportion, if not more. While there are © 2013 1BlueHorizon Group - www.1bluehorizon.com 91BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved felt on the business aviation side of the industry in the same proportion, if not more. While there are many factors expected to drive the growth of business aviation in Africa, there exists a number of challenges the sub-sector must wriggle itself out of in order to bring its immense benefits to communities and organizations in Africa. … with administrative and regulatory bottlenecks to be considered Where political and economic situations do allow business aviation to thrive, administrative delays by Civil Aviation Authorities in Africa in processing of flight permits are a major threat to developing African business aviation market. A source at one of the leading fixed based operators in Africa notes that on average CAAs in Africa require 72 hours to process permits. Business aviation is based on speed and flexibility and a 3-day period to process a permit for a business trip does harm to business aviation.
  • 11. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Africa's need for business aviation is expected to increase correspondingly as long as Africa's resources keep attracting investments As example, the Chinese way… © 2013 1BlueHorizon Group - www.1bluehorizon.com 101BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Implementing FBOs in those countries is highly advisable Source: Chinese investment offers in Africa (2010), 1BlueHorizon Group | Management Consulting Research & Analysis
  • 12. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Even Africa's giant is still sleeping, the future is definitely bright for business aviation in Africa – B e re a dy t o la nd in A f ric a … OEM Pilatus launches a new jet that aims at Africa, presented as ‘the world's first super versatile jet’. The new PC-24 not only has the ability to use short runways but can also land on unpaved surfaces and will have a cargo door fitted as standard. ‘The PC-24 is the first business jet to have the ability to use very short runways, paved or unpaved, and a © 2013 1BlueHorizon Group - www.1bluehorizon.com 111BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved SHOUKRAN - THANK YOU runways, paved or unpaved, and a cargo door as standard’ said Pilatus chairman Oscar Schwenk. EVENT: The African Business Aviation Association (AfBAA) Regional Symposium next September in Marrakech (Morocco) will debate the future of business aviation, discuss different business models, enhance the knowledge about the African market, and learn about the regional infrastructure development, and network with leading experts as well as business aircraft operators. (Thursday, 26 September, 2013 to Friday, 27 September, 2013)
  • 13. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE MANAGEMENT CONSULTING SOLUTIONS PACK P R O P R I E TA R Y I N F O R M AT I O N 1BlueHorizon Group | Management Consulting Management Consulting: How assisting management to solve a wide range of critical issues… © 2013 1BlueHorizon Group - www.1bluehorizon.com 121BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved A s s e t M a n a g e m e n t | M a n a g e m e n t C o n s u l t i n g | I n t e g r a t e d C o m m u n i c a t i o n We generate 1BlueHo rizo n ® out of the Rough... www.1bluehorizon.com March 2013
  • 14. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE ‘Big Four’Law firm Management 1BlueHorizon Group | Management Consulting (MC) is providing clients a comprehensive approach, no matter how complex the issues Innovative – Hands-on Knowleadge transferconsulting P R O P R I E TA R Y I N F O R M AT I O N © 2013 1BlueHorizon Group - www.1bluehorizon.com 131BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Operational Improvement Creating 1 B l u e H o r i z o n ® to solve a wide range of critical issues BUSINESS DEVELOPMENT IMPLEMENTATION Project Management Office Source: © 1BlueHorizon Group | Management Consulting Business model
  • 15. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Do you need help starting a new venture? Is it time for a Due Diligence as next step? Are you in need of a strategic business review? Looking for ways to differentiate from competitors? Aiming to restructure a poorly performing business? Are you in need of a sound Project Management office? Illustrative Aviation 1BlueHorizon Group|MC senior personnel core competencies lie in Airlines, General Aviation, Airports, Aerospace and Defense and are deployed on-sites P R O P R I E TA R Y I N F O R M AT I O N © 2013 1BlueHorizon Group - www.1bluehorizon.com 141BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Are you in need of a sound Project Management office? In today’s Aviation & Aerospace business environment, the margin of error is thin; clients need and expect seasoned advisors. With their respective disciplines, 1BlueHorizon Group senior personnel have experience in various corner of the world. 1BlueHorizon Group |MC is ready to field a team of relevant aviation and aerospace experts whenever and wherever they are needed Airlines Air Cargo Corporate Jet Airports MRO GCAA Source: © 1BlueHorizon Group | Management Consulting Industries & Capabilities – Core competencies Aviation
  • 16. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Project Management Office According to recent studies, 68% of projects do not meet time/cost/scope targets. The PMO strives to introduce economies of repetition in the execution of your projects and Providing innovative solutions, hands-on and knowledge transfer are our difference to maximized value creation - continuously ahead of strategies Operational Improvement Our understanding of operational improvement is quite simple: Whereas restructuring is about stabilizing a company and fixing how it does things, operational improvement is Interim Management Management trainer Finding talent is difficult even at the best of time. Finding resources to assist for a short- term assignment of a proven heavyweight interim executive manager to manage a period 1BlueHorizon Group |MC senior personnel assists - ahead of strategies - stakeholders and management of companies in a variety of sectors who are faced with operating challenges, support of a project management office and/or requesting senior executive interim management support. Ahead of Strategies If you want a feasibility study or business plan to assess the case or are burning cash and running into trouble as you approach launch or help the executive teams assess the case for entering immunized P R O P R I E TA R Y I N F O R M AT I O N © 2013 1BlueHorizon Group - www.1bluehorizon.com 151BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved execution of your projects and we participate actively in Strategic project management as facilitator… 1BlueHorizon Group |MC can help give comfort and control through our hands- on experience to maximize value creation… operational improvement is about seeing a company through the transformation of becoming more competitive. 1BlueHorizon Group |MC works side by side with you to maximize the potential of your people… manager to manage a period of transition, crisis or change within an organization or to take on critical projects or senior positions for a limited time is even more difficult. 1BlueHorizon Group |MC quickly understand what you need, with interactive mentoring if more suitable… … and our clients well recognize this! case for entering immunized joint ventures… 1BlueHorizon Group |MC senior personnel helping to maximize your potential, thinking ahead of strategies…
  • 17. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Some references about our customers and those of our industry experts were we facilitate critical dialogue and support 1BlueHorizon® creation 16 2 35 Airlines (Legacy & Low Cost Carrier, Air Cargo)Airlines (Legacy & Low Cost Carrier, Air Cargo) General AviationGeneral Aviation Aerospace & DefenseAerospace & Defense Family conglomeratesFamily conglomerates Energy - Shipping - UtilitiesEnergy - Shipping - Utilities References (details upon request) P R O P R I E TA R Y I N F O R M AT I O N © 2013 1BlueHorizon Group - www.1bluehorizon.com 161BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved 4 Public sector / Economic developmentPublic sector / Economic development Partners network - Aviation Note: References upon request
  • 18. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE ‘Ahead of‘Ahead of‘Ahead of‘Ahead of strategies…’strategies…’strategies…’strategies…’ LEONARD FAVRE Managing Director Abu Dhabi (U.A.E.) & Bern (Switzerland) 20+ years of professional experience in assisting stakeholders and management of companies in a variety of sectors who are faced with operating challenges, both as management advisor and in senior executive roles (sectors including aviation, aerospace & defense, ports, energy, public sector and family conglomerates - mostly in the Middle East) Expert in strategy & organization, cost reduction, restructuring and operational improvement, due diligence screenings, mergers & acquisitions, disinvestment, financial advisory, PMO, economic development (clusters) and interim management Fluent in French, English and German with good command of Italian and beginner Arabic Education: MBA in Management INSEAD & IDHEAP P R O P R I E TA R Y I N F O R M AT I O N © 2013 1BlueHorizon Group - www.1bluehorizon.com 171BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved Note: References upon request Professional background Chief Restructuring Officer for a Family conglomerate with aviation focus base din the U,A,E, Director by AlixPartners , restructuring and operational revitalization – Interim Management President & CEO advisor and Vice-President Strategy and Business Development for Maximus Air (Cargo Airline) in Abu Dhabi Executive Director Investments promotion and marketing for an Economic development agency based in Abu Dhabi Senior Associate by Booz Allen Hamilton for 7 years - mostly in the Middle East CEO of a Swiss Economic development agency CFO of the Swiss Ministry of Defense Regular contributor to conferences and forums and his vision of airline industry is always a valuable and knowledgeable input. M a n a g e m e n t - S t r a t e g y
  • 19. 2nd Middle East Corporate Aviation Summit (MECAS 2013) – Sofitel Dubai Jumeirah Beach, UAE Contact: LEONARD FAVRE Partner, Managing Director Email: leo@1bluehorizon.com 1 BlueHorizon Group | Manag ement Consulting| P.O. Box 34154 Abu Dhabi, United Arab Emirates M: +971 50 6164 007 (U.A.E.) M: +41 79 2080 256 (Switzerland) S: leof007 © 2013 1BlueHorizon Group - www.1bluehorizon.com 181BHG | Aeropodium Conference MECAS 13.06.13 All rights reserved