ACI Conference 2015 PRAGUE 1 Michael Cawley Chairman Failte - - PowerPoint PPT Presentation

ACI Conference 2015 PRAGUE

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Michael Cawley Chairman – Failte Ireland Airports -The Key to Tourism Success Tourism – The Key to Airports Success

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STRUCTURE OF AIRLINE BUSINESS

Indirect Partners Direct Supplier

Revenue Source

Customer Airline

FUEL OIL COMPANIES ATC AIRPORTS PEOPLE BOEING/AIRBUS GOVERNMENTS MARKETING MAINTENANCE

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Unprecedented Change in Relationships

• Liberalisation
• Technology
• Transparency
• Customer Power
• Environment/Fuel Savings

Einstein: “He who continues to do the same and expects a different outcome is insane.”

Lesson: Radical New Strategies Are Needed.

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Particular Issues for Airports

• Investment in Bricks and Mortar – Immobile

– Yet competition is International

• Governments use Aviation as a Tax Source

– Restricts Economic Growth – Creates uneven/unfair competition

• Contribution to Government Revenue not

Recognised

– Payments for services not provided – Costs not related to any service

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Burden of Government

Only Tobacco has a higher level of Tax

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Airports 2 Mid Sized Dep. Pax (000) A 800 B 350 Public Sector payments as Percentage of Turnover 31% 15% Airlines Tax Collector € Per Dep PAX % of Rev. Italy 6.50 21% Germany 7.50 24% UK 17.76 43%

New Reality in Aviation

• In Europe all growth will be on price
• Cost reduction/efficiency is the new innovation
• Governments/Airports must ignore sunk/historical costs
• Governments must treat Aviation as Economic Stimulant –

investment not taxation

• Airports like all players behave like any commercial organisation

with competitors

– Define the Stakeholders – Recognition of Role – Transit not Destination – Realistic Investment – Functional not Exotic – Identify Market Size – Identify Key Customers – Flexibility in Commercial terms

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Good News

Once prompted to travel, passengers spend 10 x Fare

Passenger Airline

FUEL OIL COMPANIES ATC AIRPORTS PEOPLE BOEING/AIRBUS GOVERNMENTS MARKETING MAINTENANCE

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€50

Hotels Restaurants Car Rental Leisure Other

€500

Creating Millions of Jobs