Legacy carriers like Air France have implemented several solutions to adapt to rising fuel costs and other challenges. These include organizing flights around major hubs to increase efficiency through higher aircraft utilization and traffic density. Air France in particular has pursued a strategy of profitable growth, expanding its network while controlling costs through measures such as fleet simplification, productivity gains, and alliance partnerships. However, rising expenses from fuel, taxes, and airport fees have also increased pressures on carriers.
Analysis of the profit function of Ryanair, Europe's biggest airline and a worldwide innovator on cost leadership.
For this analysis I first built a revenue and a cost function. Then, I used some real life examples to back up how the airline's pricing system works.
Analysis of the profit function of Ryanair, Europe's biggest airline and a worldwide innovator on cost leadership.
For this analysis I first built a revenue and a cost function. Then, I used some real life examples to back up how the airline's pricing system works.
In this video from the HPC User Forum in Santa Fe, Leonardo Flores from the European Commission presents: EuroHPC - The EU Strategy in HPC.
"EuroHPC is a joint collaboration between European countries and the European Union about developing and supporting exascale supercomputing by 2022/2023. EuroHPC will permit the EU and participating countries to coordinate their efforts and share resources with the objective of deploying in Europe a world-class supercomputing infrastructure and a competitive innovation ecosystem in supercomputing technologies, applications and skills."
Watch the video: https://wp.me/p3RLHQ-k45
Learn more: https://eurohpc-ju.europa.eu/
and
http://hpcuserforum.com
Sign up for our insideHPC Newsletter: http://insidehpc.com/newsletter
Ryanair - Accounting, finance & control projectfilippo cheli
This presentation shows our work on the most important low fares company for the accounting, finance & control project.
There are three sections:
1. financial analysis
2. benchmarking
3. conclusion
Description of the strategy (business model) of Low Cost Carrier Ryanair. Focussing on the value proposition, value architecture, revenue model and corporate culture and values.
European Processor Initiative: The EuroHPC Industrial Cornerstoneinside-BigData.com
In this deck from the Swiss HPC Conference, Mario Kovač from EPI presents an overview of the European Processor Initiative. EPI will provide to the European industry and research a competitive HPC platform and data processing solutions at world class level in the best interest of data security and ownership."
Watch the video: https://wp.me/p3RLHQ-kbV
"The European Processor Initiative is an important step of a strategic plan to develop an independent and innovative European supercomputing and data ecosystem and will ensure that the key competence of high-end chip design remains in Europe, a critical point for many application areas. Thanks to such new European technologies, European scientists and industry will be able to access exceptional levels of energy-efficient computing performance. This will benefit Europe's scientific leadership, industrial competitiveness, engineering skills and know-how and the society as whole."
Learn more: https://www.european-processor-initiative.eu/
and
http://hpcadvisorycouncil.com/events/2019/swiss-workshop/agenda.php
Sign up for our insideHPC Newsletter: http://insidehpc.com/newsletter
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
In this video from the HPC User Forum in Santa Fe, Leonardo Flores from the European Commission presents: EuroHPC - The EU Strategy in HPC.
"EuroHPC is a joint collaboration between European countries and the European Union about developing and supporting exascale supercomputing by 2022/2023. EuroHPC will permit the EU and participating countries to coordinate their efforts and share resources with the objective of deploying in Europe a world-class supercomputing infrastructure and a competitive innovation ecosystem in supercomputing technologies, applications and skills."
Watch the video: https://wp.me/p3RLHQ-k45
Learn more: https://eurohpc-ju.europa.eu/
and
http://hpcuserforum.com
Sign up for our insideHPC Newsletter: http://insidehpc.com/newsletter
Ryanair - Accounting, finance & control projectfilippo cheli
This presentation shows our work on the most important low fares company for the accounting, finance & control project.
There are three sections:
1. financial analysis
2. benchmarking
3. conclusion
Description of the strategy (business model) of Low Cost Carrier Ryanair. Focussing on the value proposition, value architecture, revenue model and corporate culture and values.
European Processor Initiative: The EuroHPC Industrial Cornerstoneinside-BigData.com
In this deck from the Swiss HPC Conference, Mario Kovač from EPI presents an overview of the European Processor Initiative. EPI will provide to the European industry and research a competitive HPC platform and data processing solutions at world class level in the best interest of data security and ownership."
Watch the video: https://wp.me/p3RLHQ-kbV
"The European Processor Initiative is an important step of a strategic plan to develop an independent and innovative European supercomputing and data ecosystem and will ensure that the key competence of high-end chip design remains in Europe, a critical point for many application areas. Thanks to such new European technologies, European scientists and industry will be able to access exceptional levels of energy-efficient computing performance. This will benefit Europe's scientific leadership, industrial competitiveness, engineering skills and know-how and the society as whole."
Learn more: https://www.european-processor-initiative.eu/
and
http://hpcadvisorycouncil.com/events/2019/swiss-workshop/agenda.php
Sign up for our insideHPC Newsletter: http://insidehpc.com/newsletter
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
Air france international strategy analysis (2014)Steph Nass
Air France international strategy is driven by two external threats: the pressure of low-cost competitors on short and medium haul, and the competition from emerging countries' airline on long haul.
Air France response includes : (1) external growth, (2) partnerships and (3) segmentation.
Made with love by a team of students from EMLYON Business School.
Business Aviation Economic Value and Business BenefitsArthur Thomas
Economic Value anhd Business Benefits provided by Business Aviation in Europe - Annual Report
Yearly Infographics Publication - A snapshot on the BizAv Market in 31 european Countries
This presentation by Brian Pearce from IATA was made during a roundtable discussion on airline competition held at the 121th meeting of the OECD Competition Committee on 19 June 2014. Find out more at http://www.oecd.org/daf/competition/airlinecompetition.htm
Kenny Jacobs, Ryanair’s Chief Marketing Officer, spoke about how customer communication is a 24/7 job which requires an innovative mindset and a dedication to continuous improvement, reflected in Ryanair’s “Always getting better” programme. He shared his thoughts on the challenges faced day to day in Ryanair’s pursuit of customer understanding and engagement, and how transitioning the brand values of Ryanair is leading to the transformation of Europe’s biggest carrier. This event was run by The Marketing Institute of Ireland in association with Cork Chamber and sponsored by Bank of Ireland
This presentation was originally shared at the SpeedNews Aviation Industry Suppliers Conference in Toulouse, France on September 16, 2015 by David Stewart. Over the last thirty years, the global air transport Aftermarket has evolved from a cost centre to a highly competitive market. In this presentation, ICF explores the three key battlegrounds that will determine the future of Aftermarket. You can find an appendix of acronyms on Slide 28 of the presentation.
Similar to Af kl-adapting to survive cannesairlinesforum-2005-eng (20)
Af kl-adapting to survive cannesairlinesforum-2005-eng
1. Adapting to survive Solutions implemented by ”legacy carriers” Jean-Cyril Spinetta Cannes Airlines Forum – 28 October 2005
2. With an average price estimated at 57 dollars per barrel in 2005, the airlines’ fuel bill has rocketed 2005 Results Estimate Net income, USD bn $47 * $38 Average oil price 0 Source : IATA * : May 2005 scenario ** : September 2005 scenario $38.30 9/11 SARS, Iraq war $57 ** 1 + 54% to 97 billion euros
3. What differentiates the legacy carriers? Of which ~ -1270m€ in cancellation of ta x credits and ~ -1340m€ in asset revaluation and ~ -360m€ in restructuring costs Of which ~ -610m€ in restructuring costs Net income per airline (€m) - IATA 04-05 -8 885 million € +545 million € CO DL UA BA IB AZ AF-KL LH SK AA NW AS US +945 million € A contrasted situation A stricken industry EUROPE USA
4. Organization by hub 1980s: USA 1990s: Europe 1980 Atlanta 1986 Washington USA Hub model Medium-haul/Medium haul Domestic Hubs Atlanta, Chicago, Dallas, etc. European Hub model Long-haul/– Medium-haul Intercontinental Hub CDG, Frankfurt, Schiphol Middle East Hub model Long-haul/Long- haul Dubai 1991 Schiphol 1992 Frankfurt 1996 CDG 1981 Dallas A recent model The economics of density 2000s: Gulf 2000-01 Dubai
5. Basically, a hub is a model of cost reduction Flight connections generate 50-150% of additional traffic Increased frequencies and/or aircraft capacity A more attractive product / lower unit costs Point-to-point traffic Connecting traffic The economics of density
6. Hubs: an efficient use of resources 59 medium-haul flights arrive 21 long-haul flights depart Air France Hub at CDG Summer 2005 1,319 origin-destination combinations The economics of density Medium-haul flights arrive Before 0930 local time Los Angeles Marseille Bordeaux Dublin Tel Aviv Madrid Cincinnati . . . . Paris Atlanta Mumbai Long-haul flights depart Between 1015 and 1100 . . .
7. Bigger aircraft thanks to traffic complementarity Three-class configuration – compared to “economy class” seat Leg length of 5,000 NM +30 % A 380 The economics of density A 330 Between the A380 and the A330 30% difference in seat cost Base 100
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11. A cost reduction strategy forms part of an overall strategy Diametrically opposed strategies among the biggest European carriers … whose consequences are already very significant Traffic levels RPK long-haul, April 98-Sept. 05 Traffic growth (RPK Long-haul) IATA 98 IATA 2004
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13. Air France has resolutely opted for growth Because we have scope for growth at Roissy … which is not the case at the other major European airports To win market share … and offer an increasingly attractive network To generate the necessary productivity gains
14. Air France – KLM’s strategy of “profitable growth” Balanced growth integrating the 2 parts of the equation PROFIT REVENUE COSTS = - Nor unrestrained growth Uncontrolled growth likely to lead to cost slippage Neither downsizing Brings results in the short term, but difficult to sustain over the longer term
15. Which until now has borne fruit Operating profit (€ million) (before aircraft disposals) Turnover (€million)
16. Trend in Alliance models Degree of cooperation Synergies Commercial partnership ATI (large-scale price harmonization) Joint venture (on joint network components) Low Moderate High Total (FFP, Lounges etc.) Commercial alliance (code-share: free-flow, seat blocks etc. Revenue and costs sharing Revenue sharing
17. European majors are gaining ground 500 2 500 4 500 6 500 8 500 Sept-01 Mar-02 Sept-02 Mar-03 Sept-03 Mar-04 Sept-04 Mar-05 Sept-05 and a 3% drop in traffic (RPK) over 4 years for smaller European airlines KLM Air France British Airways Lufthansa Iberia Swiss Alitalia 27% more traffic (RPK) in 4 years for the 4 European majors... Long-haul RPK, seasonally adjusted
18. Air France – KLM, an effective combination… Summer season 2005 schedule Because Air France and KLM are remarkably complementary Long-haul Medium-haul AF-only destinations KLM-only destinations 49 32 30 111 57 45 24 126
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20. … while strengthening our positions on our respective domestic markets KLM - increased revenue on the French market Air France – increased revenue on the Dutch market Top 5 KLM-only destinations: +19% Top 5 AF-only destinations : +48% 2 nd quarter 2004-05
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23. Instant sensitivity of our market share to the slightest shift in prices % Air France and industry sales on Italy-North America routes in 2004-2005, monthly data All airlines Air France -14€/ticket -20€/ticket Source: BSP
24. Successive cost-cutting plans at Air France … 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Target (€m) Achieved (€m) Performance 2003 Three Billion Plan Competitiveness 2007 84 102 313 331 457 463 70 88 176 186 280 300 200 215 590 * 800 * * Includes gross savings on costs linked to switch to zero commissions
25. … combined with large-scale productivity gains Overall productivity at Air France from September 01 to September 05 180 200 220 240 Sept-01 Dec-01 Mar-02 Jun-02 Sept-02 Dec-02 Mar-03 Jun-03 Sept-03 Dec-03 Mar-04 Jun-04 Sept-04 Dec-04 Mar-05 Jun-05 Sept-05 +21% productivity in 4 years (seasonally adjusted) EASK/EPT 000s
27. … have kept costs under control Net operating costs / EASK (Air France) (ex currency, inflation, oil prices and fees) 2001-02 = 100
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30. The hub acts as a rampart against the low-costs Example of the Paris – Geneva route AF AF LX U2 U2 Evolution du nombre de fréquences sur Paris - Genève 0 2 4 6 8 10 12 S3 à W04-05 S05 AF AF LX U2 U2 AF: N° of frequencies stabilized easyJet: cut from 4 to 3 frequencies Swiss: services discontinued Frequencies on the Paris – Geneva route Summer 2005 Summer 2003
31. We cut our costs… but cost of jetfuel rises (€m) Jetfuel spend before hedging Jetfuel spend after hedging +459 +419 +440 Hyp: 61,9 $/bl 1 € = 1.24 $ 65,6 $/bl 1 € = 1.25 $ 63,4 $/bl 1 € = 1.25 $ 61,9 $/bl 1 € = 1.25 $ +450 +140 % of turnover ( ) (13%) (15%) (21%) est (15%) est (22%) est (18%) est Forward price at 26/08/05 (10.5%) (11.5%) Air France Group
32. Jetfuel hedges: a temporary cushion Price of Brent $ / barrel Forward price at 7/10/05 Market price Real price after hedging
33. Taxes and fees have also risen sharply! In 4 years, Air France’s total bill has risen by + 40% EASK = ASK + 2.36* ATK + 22% for EASK
34. Like for like, ADP is 20% more e xpensive than LHR or SCH. Fraport is 15% more e xpensive but with a pricing structure that is more beneficial for the hub € / Pax Ratio of costs / Pax 2004 Note: Traffic Pax 2004, 2004 figures estimated e xcept for Schiphol and Fraport (Annual report 2004) Source: BCG analyses Pax 2004 44.3 66.4 51.1 75.3 Benchmark BCG 7 Fees/ Pax Fees + security/ Pax Like-for-like/ Pax