necessity of regional tailored strategies chaoui.pdf · necessity of regional tailored strategies...

ATR - Avion de Transport Regional

Windhoek - September 4th, 2012

NECESSITY OF REGIONAL TAILORED STRATEGIES

Othman CHAOUI

2

ATR Presentation – September 4th 2012

Agenda

Current African Facts & Trends

Rethinking of regional strategies

3


Traffic impacted in the North due to political unrest, New airlines in the market, mainly in West Africa :

Private legacies and low cost modelsAfrica registered the lowest load factor : 67 % (vs 78 % worldwide)……Despite a strong economic growthIncreasing competition from non-African carriersFuel price is the main operating cost

Current Facts

4


Current Facts

Around 10 Hubs linking Africa with other continents

Ø These are generally Hubs for African Majors

Ø Based on significant domestic & regional network :Ø own operationØ Cooperation

Other Airports with:Ø Few intercontinental routesØ Limited domestic & regional

network

WEST AFRICALow

connectivity

CEMACLow

connectivity

CASABLANCA

ALGIERS TUNIS

CAIRO

ADDIS ABEBA

NAIROBI

JOHANNESBURG

LAGOS

DAKAR

5


A tailored business model needed to success

Despite they are profitable, foreign Business models not 100 % applicable to Africa

A successful business model work within its own environment :In Europe :

• Low Cost using point –to-point on secondary's airports with Jet single –aisles• Despite legacies have strong local market, they make their difference by feeding

passengers from trunk and thin routes to their hubs

In Asia : • All successful carriers based their model with their own environment

African carriers need to think abount their own strategy


6


Market

Operating cost (mainly fuel)

Environment


A tailored business model needed to success :

7


NOV

LAD

SDD

VPE

ABVSKO

ACC

COO

ALG

BJA

BLJBSKTLM ALY

ATZ

APL

POL

VXC

CAI

BEN

MRA

ORN

BJL

CKY

BLZ

LLW

BOYOUA

CBT

FNA

LOS

DIEDZA

MJNNOS

DJE

MIRNBE

TOE

TUN

DJG

TMR

DKR

NKC

DLASSG

ELF

UYL

FBM

LUN

NLA

FIH

BZV

FTUTLE

GMABDT

MDKGOM

FKI

HME

IAM

HREVFA

HRGSSH

TCP

KGAMJM

KGL

BJM

KNDLBV

LFW

LXR

RMF

SFA

TNR

MRUZSE

MSZ

NDB

NIM

SPP

ASW

SVB

TMM

SVP

TET UEL

WDHWVB

WJR

NBO

DKA

GMO

ADE

BBO

ADJAGARAK

ALCVLC

ASA

ASM

MSW

JIB

MWZ

HMB

MUH

PSDTLV

ROB

EGN

FEZ

TNG

JED

PZU

TAI

KMS

TML

MEG VHC

MLA

TIP

MPA

NDU

MUB

KIS

NDROUD

SAH

AQJ

OND

ERS

AAE

ABJ

ABS

BNI

CBQ

ENU

KAN

PHC

QOWQUO

NYITKD

ADDDIR

CMN

AGP

BCN

CZL

QSFAMM

BFN DUR

JNB

BSG

SID

PNR

CAB

MLW

OZZ

CPTGRJ

DAR

JRO

MYW

ZNZ

OXB

NSI

ELSHLA

MQP

HAH

EBB

JUB

EDL

GBEHDS

HGA

KIM

MPM

MSUMTS

PTG

MBA

LVI

MYD

RUN

RAI

ABB ABK

JIJIBAILR

QRWAMH

ASOBJRGDQ

GMBJIM

LLIMQX

EUN

EBH ELUGHA

GJL

LOOMUW

MZW

PMI

TEE

TGR

TID

ANMWMN

ARKASVWIL

AXU

BBK

BSA

GLK

BEWVPY

PLZ

BKZ

BMDMOQ

RIY

BUG

BUQ

SFL

SZA

HBE

PFO

TUU

CIP

IRI

GDE

ZIG

TMS

DVD

RUA

EBD

KRT

LPA

KWZ

FRW

GAEGAF

ELG

GOU

NDJ

GYI

HUE

INHVNX

INZAZR

MBI

JJM

PHW

RCB

MAK

RBX

WUU

KME

KSL

KTL

LOK

LAUPOG

LIS

LIX

LKG

LUD

MFU

UKA

MMO

MXMRLR

SHC

MRENYKUAS

MUZ

TBOTKQ

OUZ

OMD

PMO

PRISEZ

ULD

SNE

SMS

WMR

VPG

VVZ

Market context : Africa short sectors overview : Routes under 300 Nm

Source : OAG August 2012

700 intra-African routes in operation42,600 Monthly Frequencies

Turboprop45%

Jet55%

40 % with capacity < 100 seats

8


NOV

LAD

SDD

VPE

ABV

SKO

ACC

ALG

BJABLJ

BSKTLM

ATZ

APL

POLVXC

CAI

BEN

MRA

ORN

CKYBOY

OUA

CBT

FNALOS

DIE

MJN

NOS

DJE

MIRNBE

TUN

DJG

TMR

DKR

NKC

DLASSG

ELF

UYL

FBMLUN

FIHBZV

FTUTLE

GMABDT

MDK

FKI

HMEIAM

HREVFA

HRGSSHTCP

KGA MJM

KGL

BJMKND

LBV

LFW

LXR RMF

SFA

MRUZSE

MSZ

NDB

SPP SVB

TMM

SVP

TET

UEL

WDH

NBO

DKA

GMO

ADE

BBO

ADJAGA

RAK

ALC

VLC

ASA

ASM

MSW

JIB

MWZ

HMBMUH

TLV

ROB

EGN

FEZ

TNG

JED

PZU

TAI

TML

MEG VHC

TIP

MPANDU

MUB

NDROUD

SAH

AQJ

KIM

JNB

JRO

ZNZ

ABJ

CMN

BCN

OND

BNI

DARMYWKWZ

ADD

KAN

EBB

MYD

BUQ

QSF

PNR

OUZ

LUD OMD

ILR

GDQ

HGA

EUN

MLW

TUU

HAH

TMS

OXB

GOU

NDJ

VVZ

HDS

MBA

BEW

OZZ

With the right size, airlines can :

q Optimize route profitability

q Stimulate demand by increasing frequencies

Source : OAG August 2012

110 routes operated by jets1,400 Monthly Frequencies

Market context : Africa short sectors overview : Routes under 300 Nm with less than 1 daily flight

9


High Losses and service disruptionDifficulty to Adapt to Changing Market Conditions

Low service frequencies

Low passenger response

Stagnation of passenger traffic

Overcapacity

High operating costs

Low load factors

Market Context : Inappropriate Use of Large Jet Aircraft

10


Develop overall regional routes market

Higher service frequency

Passenger- friendly schedules

Traffic stimulated by frequency

Optimum mixed capacity

Low operating costs

High load factors

Selective Right-Sizing with suited (family of) Regional Aircraft

Regional Routes Enhancement

11


Cost Constrains : Fuel price impact on product positioningAs fuel price rises, ATR72 gains seat cost advantage

over single aisleDOC/seat relative comparison250 nm route comparison

105.0

109.8

101.1

113.5

95.2

90.2

100.0

88.3

94.7

107.2

85

90

95

100

105

110

115

2 2.5 3 3.5 4

Jet Fuel price (US$/gal)

ATR72 A319/B737Jet single aisle

Average fuel price available in Africa

12


ATR 72-600

+ 36 %

TP70 seatscompetitor

RJ 70 seatscompetitor

+ 47%+ 68 %

RJ 70 seatscompetitor

Block Fuel Consumption per passenger300 Nm Flight

Comparative costs : Choosing the right aircraft type

ATR 72-600, the lowest cost on 70-seats segment

Datum+ 35 %

Single Aisle130 Seat

13


Environmental context

Short and unpaved runwaysIslands, Desert, forestIsolated African communities where there is a lack of ground transport

Easy access to remote areas is essential to the development of a country

14


Transport system tailored with local environment : How can I make the difference ?

With a transport system tailored with local environment context :

Access to local areas where other means of transport are longer or weaker : open up areas and contribute to the local economy

Take the market that your competitors cannot access

Feeding this market to your hub/base for intercontinental routes

15


…while their 737-900 are using for trunk and longer routes

They ordered 15 ATR 72The aircraft was tested successfully on the Indonesian marketThus, the carrier decided to convert 18 option on order in 2010 and 27 in 2011To consolidate their leadership position on their short sector

Example of a successful Asian carrier : Lion Air

16


MATARAM WIMA

BALI

SURABAYA

SUMBAWA BESAR

AMBON

FAK FAK

KAIMANALANGGUR

MANOKWARI

NABIRE

SORONG

SANANA ISLAND

SAUMLAKI

UNJUNG PANDANG

KALABAHI

KUPANG

BALIKPAPAN

JAKARTA

YOGYAKARTA

KOTABARU

SEMARANG

BANDUNG

BATAM

SINGAPORETANJUNG REDEP

TARAKAN

BIAK

JAYAPURA

BAJAWA

BENGKULU

MANADO

PALUJAMBI

MEDAN NATUNA RANAI

PADANG PARIAMANDEPATI AMIR

PEKANBARU

PALEMBANG

PONTANIAKSINKEP

BANDA ACEH

PENANG

BAU BAU

MALANG

PALANGKARAYA

SOLO

RADIN INTEN II

KERINCI

MERAUKE

TIMIKA

ENDE

LABUAN BAJO

TAMBOLAKA

WAINGAPU

DUMAIGUNUNGSITOLI

GORONTALOKAO

KUCHING

KENDARI

LARANTUKARUTENG

LHOK SEUMAWE

MELANGGUANETAHUNA

TERNATE

MEULABOH

PADANG SIDEMPUAN

MAMUJU

MALACCA

NUNUKAN

POMALA

LUWUK

LOP

Source : OAG Jun 2012

ATR routes

Single Aisle routes


Connecting local communities and linking all remote areas with ATR

Lion Air regional routes

17


MATARAM WIMA

BALI

SURABAYA

SUMBAWA BESAR

AMBON

FAK FAK

KAIMANALANGGUR

MANOKWARI

NABIRE

SORONG

SANANA ISLAND

SAUMLAKI

UNJUNG PANDANG

KALABAHI

KUPANG

BALIKPAPAN

JAKARTA

YOGYAKARTA

KOTABARU

SEMARANG

BANDUNG

BATAM

SINGAPORETANJUNG REDEP

TARAKAN

BIAK

JAYAPURA

BAJAWA

BENGKULU

MANADO

PALUJAMBI

MEDAN NATUNA RANAI

PADANG PARIAMANDEPATI AMIR

PEKANBARU

PALEMBANG

PONTANIAKSINKEP

BANDA ACEH

PENANG

BAU BAU

MALANG

PALANGKARAYA

SOLO

RADIN INTEN II

KERINCI

MERAUKE

TIMIKA

ENDE

LABUAN BAJO

TAMBOLAKA

WAINGAPU

DUMAIGUNUNGSITOLI

GORONTALOKAO

KUCHING

KENDARI

LARANTUKARUTENG

LHOK SEUMAWE

MELANGGUANETAHUNA

TERNATE

MEULABOH

PADANG SIDEMPUAN

MAMUJU

MALACCA

NUNUKAN

POMALA

LUWUK

LOP

Source : OAG Jun 2012

ATR routes

Single Aisle routes


Lion Air routes < 500 Nm

Connecting local communities and linking all remote areas with ATR

18


32%

16%28%

10%

10%4%

Europe/CISNorth AmericaAsia PacificAfrica - Middle EastLatin AmericaLessors (speculative)

ATR: facts and figuresWorld N 1 Turboprop Manufacturer

US 1.4 Bn turn-over in 2011Over 1,200 firm ordersOver 1000 ATR delivered

More than 21 Million cycles99.7% average Dispatch ReliabilityOver 180 operators in 90 countries

Since launch – end of June 2012

Production/Deliveries Ramp-Up

Orders by region

More than 510 new ATR orders since 2005

Welcoming 56 new operators

0

20

40

60

80

100

2005 2006 2007 2008 2009 2010 2011 F2012 F2013 F2014

June 2012

Every 20 seconds, an ATR takes off somewhere in the world

Thank you !

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