Pieter K. Zylstra, SITA, presents at 2014 World Low Cost Airlines Conference
 

Pieter K. Zylstra, SITA, presents at 2014 World Low Cost Airlines Conference

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Pieter K. Zylstra, Head of Strategic Programs, SITA AsiaPac

Pieter K. Zylstra, Head of Strategic Programs, SITA AsiaPac
speaks at Terrapinn 2014 World Low Cost Airlines Conference, Singapore, Feb.18-19, 2014

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    Pieter K. Zylstra, SITA, presents at 2014 World Low Cost Airlines Conference Pieter K. Zylstra, SITA, presents at 2014 World Low Cost Airlines Conference Presentation Transcript

    • “BEYOND ANCILLARY REVENUES” The Rise of New Mobile Infotainment Services Pieter K. Zylstra, Head of Strategic Programs, SITA AsiaPac Terrapinn 2014 World Low Cost Airlines Conference, Singapore, Feb.18-19, 2014
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 2 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Aviation: Where is the money? Source: IATA, 2013 (based upon report McKinsey & Company).
    • Outlook 2014 Profit Margin: 2.6% Source: IATA, IdeaWorks 2013, CAPA 2012
    • How can Aviation Transportation Business Model survive? ATI profit margins 1st wave: Transportation business model 2nd wave: Non-Transport business model “Healthy” Margins: 10%-20% “Razor-thin” Margins: 1%-5% Time
    • Rise of Ancillary Revenues Source: IdeaWorks, Oct.2013, LCC websites
    • “Third Wave”: Mobile Infotainment ATI profit margins today 1st wave: Transportation business model “Fat” Margins: >25% 2nd wave: Non-Transport business model 3rd wave: Infotainment business model “Healthy” Margins: 10%-20% “Razor-thin” Margins: 1%-5% “”transportation” “intelligent transportation” Time
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 8 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Beyond Ancillary Revenues… in the coming years all your passengers will be carrying smartphone & tablets into the plane. Do you want to know your passenger? personal communication devices are approved by more and more aviation authorities worldwide Next generation (Ka) satellite technologies offer high-speed bandwidth
    • Rail versus Airlines…
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 11 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • How can LCCs create Personal Profitable Services? personal: invest in agile PSS functionality profitable: invest in “touchpoint” solutions & capture experiences services: integrated architecture with “big data” capabilities
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 13 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • SITA’s Crewtablet solution Passenger List Inventory Forms & reports  Slow paper based reporting  Admin overhead  Heavy weight & fuel consumptions  No pax service personalization Crewtablet movie 14 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Fully managed solution, opex-based Paperless operations 1 Integration Crew App 2 3 Crew Server Business Process efficiency Passenger Services 4 Crew Portal 15     Reservation & Ticketing Roster, Duty free, Loyalty Mobile Learning, MRO, Bag Payment Service Providers New revenues | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Module-based solution 2014 2014 2013 Core Retail M-learning Analytics Pax Defects Live Sces Bag Track 16 Crew Portal Bus Intel. Inventory | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • ROI-based solution 1 Process & issues 2 Mapping modules CrewTablet financials 4 TBD 3 LIVE SERVICES MEALS 2 CABIN DEFECT RETAIL CREW PAX BAG COST S CUSTOMER COMPET IT ION E-LEARNING 1 CORE COMPLIANCY 3 ROI Benefits logic SOLUTION MODULE SERVICE FUNCTIONALITY OPERATIONAL EFFECT(S) 4 ROI Business Case STRATEGIC GOALS crewtablet financials Automate digital claim process @ plane / back-office CREW CREW TABLET PAX DIGITAL PASSENGER PROFILE RETAIL DIGITAL PASSENGER SURVEYS CrewTablet functionality marginal revenue per user COST REDUCTION Reduce delay “no show” Optimize passenger experience @ plane (by crew) CUSTOMER SATISFACTION BAG Increase passengers loyalty (frequent flyer program & affiliate program) CUSTOMER REVENUE OTHER Turn passenger loyalty into cross/upselling revenues Enrich passenger profile (especially VIP-program) STRENGTHEN COMPETITIVE POSITIONING Positive ROI Negative ROI Marginal costs per user crewtablet functionality 17 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 18 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Our vision on the “third wave”: shared wireless infra & platform: • focus upon enterprise mobility cost-savings • launch personal profitable passenger services
    • Examples the “third wave”: mobile personal digital services Connectivity (Internet & GSM) Landing Page Digital Magazine On board retail Digital Audio/Video (Live / On Demand) Crew (operational efficiencies & service personalization) Pilots (EFB, Fuel, Safety, etc) Maintenance (remote MRO, Smart diagnostics) “E-Connected Aircraft” (B2C, B2E, B2B & M2M)
    • OnAir Play: Entertainment on PEDs ➔ Favourite amenities when flying: Specific Usage of PEDs During Flight Listen Music 68% Play Games 54% Read books or mag 48% Watch movies 44% Offline work 39% Read emails 31% Connect to Wi-Fi 30% Take pictures 24% Semd email 23% Text messages 23% Online work 19% Social media 18% Shop online None Other 7% 4% 2% Source: 2013 Airline Passenger Experience Association (APEX) and Consumer Electronics Association (CEA®). © OnAir 2013 21
    • Examples “third wave”: mobile personal digital services
    • How can SITA support? Our 4-Step Approach 1-3 Days 3-6 Months Insight Day – Master class Strategy & Business Case Awareness session of “best ATI practices” & demonstration SITA solutions (ATI apps). Proposition What is your position in the value chain? =Strategic Deployment Options How would the preferred innovation roadmap look like? =Integrated Service Roadmap What integrated architecture should support the roadmap? =High Level Architecture How does the business case look like? = Benefit Logic How to deploy the innovation roadmap? = Governance Advice. ! Value Chain Analysis Stakeholder Analysis Governance & Control Deployment Scenarios Services ! ! Innovation Roadmap: Public Services Enterprise Services M2M Services 6-12 Months Testbed (early deployment) Governance Transformation @IT / Corporate Management Product Management Roadmap Introduction Service Organization (& Processes) Architecture Logical components Back-office architecture Middleware platform On site infrastructure Network Infrastructure Applications Middleware Platform Business Case @back-office @site Benefit Logic Business Case Investment Requirements Capex/Opex-financing Physical Infrastructure @sites Year 1 Roll-out Program Management Office Organization Transformation (incl. processes) Transformation Roll-out Application Customization & System Integration Physical Infrastructure Deployment + Network Integration Year 2 …
    • Contents • Beyond Ancillary Revenues • Personalization is key • LCCs & personal profitable passenger services • Crewtablet: best practices & ROI model • Are LCCs ready for the “third wave”? • Q&A 24 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014
    • Thank you for your interest! Questions? Contact details: 25 | World LCC Conference 2014 | Zylstra – “Beyond Ancillary Revenues” | © SITA 2014