ACI Conference 2015 PRAGUE 1
Michael Cawley Chairman – Failte Ireland Airports -The Key to Tourism Success Tourism – The Key to Airports Success 2
STRUCTURE OF AIRLINE BUSINESS Revenue Direct Supplier Indirect Partners Source FUEL OIL COMPANIES ATC AIRPORTS PEOPLE Custome r Airline BOEING/AIRBUS GOVERNMENTS MARKETING MAINTENANCE 3
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. 4
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 5
Burden of Government Airports 2 Mid Sized Dep. A B Pax 800 350 (000) Public Sector 31% 15% payments as Percentage of Turnover Airlines Tax Collector € Per Dep % of Rev. PAX Italy 6.50 21% Germany 7.50 24% UK 17.76 43% Only Tobacco has a higher level of Tax 6
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 7
Good News Once prompted to travel, passengers spend 10 x Fare FUEL OIL COMPANIES Hotels ATC AIRPORTS Restaurants € 500 € 50 Car Rental PEOPLE Passenger Airline BOEING/AIRBUS Leisure GOVERNMENTS Other MARKETING MAINTENANCE Creating Millions of Jobs 8
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