Volume II—Issue 9
A Magazine for Aviation Leaders & Influencers
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FEATURED
Should Airlines Reconsider How They Generate Revenues? More articles inside...
Record Profitability: Will African Airlines Ever Join the Feast?
Edition: July-August 2016
Norwegian Air: Is the US Outcry Justified?
Alaska Air-Virgin America: An Airline Alliance for the Best or the Worst?
Volume II—Issue 9
July-August 2016
Airline Profits
Contents 6
Editorial: Alask a Air -Virgin America: An Airline Alliance for the Best or the Worst?
12
Profile: Spir it Air lin es: W hat Did the Air lin e Profits Sustainability Index Reveal?
18
Perspective: Nor w egian Air : Is the US Outcry Justified?
24
Performance: Recor d Pr ofitability: Will African Airlines Ever Join the Feast?
30
Paradigm: Shou ld Air lin es Recon sider How They Generate Revenues?
36
Platform: The First CSeries Is Delivered: Will Bombardier Beat the Odds?
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3
HEAD OF PROGRAMS: Kofi Sonokpon
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Airline Profits
July-August 2016
Volume II—Issue 9
Editorial Alaska Air-Virgin America: An Airline Alliance for the Best or the Worst? Kofi Sonokpon editor@airlineprofits.com
Alaska Air Group, the parent company of Alaska Airlines acquired Virgin America for 2.6 billion US dollars in April 2016. As curious observers, we are all waiting to know and with varying level of interest, firstly whether the US Government will bless their alliance, secondly, will their integration work and last but not least, what will happen to Virgin America as a brand.
The Acquisition Was it for money? On one hand, as far as finances are concerned, Virgin America posted increasing profits from 2013 to 2015, totalling US$ 0.4 billion. However, the financial performance since 2007 revealed
that the airline has lost a cumula-
We are all waiting to know and with varying level of anxiety, firstly whether the US Government will bless their alliance; secondly, will their integration work and last but not least what will happen to Virgin America as a brand.
tive US$ 0.22 billion, although revenues
grew
steadily
and
mulative profits of US$ 2.8 billion
the
reached a cumulative as high as
from 2006 to 2015 and average
potential of the former.
US$ 8.5 billion. Meanwhile aver-
operating and net margins were
age operating and net margins
respectively at 9.83% and 5.73%.
were respectively -25% and -14%.
immediate
money-making
Was it for compatibility? Therefore, the acquisition of Vir-
On the other hand, Alaska Air
gin America by Alaska may not
Maybe and to
some
extent.
was performing better with cu-
have been necessarily driven by
On one hand, Virgin America has been recognized for their excep-
6
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Alaska Air and Virgin America Aircraft Tails. Photo Credit: Alaska Air
tional in-flight experience. As a
Therefore, Alaska Airlines and
matter of fact, the airline has won
Virgin America do have a few
several awards over consecutive
things in common. However, ac-
years, including a Skytrax 4 Stars.
cording to industry analysts, the
On the other hand, Alaska also has claimed the spot of the top airline in the US for customer service for consecutive years accord-
ing to JD Powers. Furthermore, both airlines have been recognized to be good employers.
two airlines are too different to form a compatible alliance, in terms of organizational culture and client base. With that said,
Virgin America does bring to the table a unique network, which will allow Alaska Air to become the largest west coast carrier.
The Merger Timeline According to the timeline issued, the Virgin America brand will
coexist with that of Alaska Air until 2018 when a single air operator certificate (AOC) is anticipated to be granted. In the meantime, travelers can continue to fly
either
airline
In
meantime,
the
as
usual. regulatory
approval of the transaction is expected no later than January 1, 2017.
Airline Profits
July-August 2016
Volume II—Issue 9
Airline Profits
July-August 2016
Volume II—Issue 9
Editorial
Brad Tilden and David Cush, re-
fifth mega US airline, after Delta
However, according to a recent
spectively Chairman and CEO of
Air Lines, Southwest Airlines,
report, Mr. Tilden may have
Alaska Air Group and President
United Airlines and American
reached an understanding that
and CEO of Virgin America will
Airlines, thus furthering the con-
they are probably better off
co-lead the integration of the air-
solidation of the American airline
by keeping Virgin America as a
lines into a single entity. The
industry. And that could be fig-
separate brand.
merged airline will retain the
uratively speaking considered as
name Alaska Airlines, will be led
a honeymoon, which everyone
by Brad Tilden and be headquar-
tends to agree to be the sweetest
tered in Seattle, Washington.
part of an alliance. The hardest
Beyond the Paperwork
part will then be the livingtogether as one entity or plainly
When finally approved as a
speaking the effective merger of
single air carrier, Alaska Air
two sets of cultures, values, pro-
and Virgin America will form the
cesses and systems.
8
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Therefore, we only hope that the team in charge of the implementation of this particular merger does it best to ensure a harmonious co-existence to employees and
a painless
customers.
transition
to
Time
“My favorite things in life don't cost any money. It's really clear that the most precious resource we all have is time.” — Steve Jobs
Airline Profits
July-August 2016
Volume II—Issue 9
“ I try to be grateful for the abundance of the blessings that I have, for the journey that I'm on and to relish each day as a gift.
― James McGreevey
Airline Profits
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Airline Profits
July-August 2016
Volume II—Issue 9
Profile Spirit Airlines: What Did the Airline Profits Sustainability Index Reveal?
In the previous edition of Airline Profits, we presented our first review of Copa Airlines based the Airline Profits Sustainability Index (APSI). This is an integrated metric, which takes into account three dimensions: People, Performance and Agility. In this edition, we are presenting another airline review on the basis of the APSI: that of Spirit Airlines. Our analysis covered a period of 10 years, starting 2006 through 2015. We have also considered pieces of information available
on Spirit Airlines website and other reputable sources such as Flightglobal at the time our review was conducted.
Based on the data available as of June 2016, our analysis revealed that on a scale of 1 to 10, Spirit Airlines has an Airline Profits Sustainability Index of 8.6.
Based on the data available as of June 2016, our analysis revealed that on a scale of 1 to 10, Spirit Airlines has an Airline Profits Sustainability Index of 8.6.
In the next few lines, we are going to offer a breakdown of this rating. However, let’s begin with a brief overview of the company by highlighting some key facts.
12
Creation and History
Company, his first transportation
Spirit Airlines started initially as Charter One in 1990. The tour operator
was
established
by
Ned Homfeld, a Michigan, visionary and serial entrepreneur who founded Clipper Trucking
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business at 23, while in college in the 1960s. The charter operation began in the early 1980s and started offering scheduled air services less than a decade later, in 1990.
A Spirit Airlines Airbus A319. Photo Credit: Spirit Airlines
After acquiring jet equipment,
industry, while at constant dollar
Business Model, Network and
two Convair 580s in 1992, Char-
-value contributed nearly 10% to
Fleet
ter One was renamed Spirit
the cumulative net profits of the
One of the world’s largest ultra-
Airlines and catered to several
industry over that period of time.
low-cost carrier, Spirit Airlines
niches in the leisure market. Since then, Spirit Airlines expanded rapidly and became a well-established
ultra-low-cost
carrier and one of the most profitable airlines in the world. As a matter of fact, from 2006 to 2015, Spirit Airlines consistently outperformed the world airline
Airline Profits
Obviously, that outstanding and steady financial performance comes in sharp contrast with the reputation Spirit Airlines has earned over that same period as the least customer-friendly among US air carriers and arguably the most controversial airline in terms of marketing and newsjacking.
July-August 2016
serves 57 destinations across the Americas, of which North America accounts for almost 60 percent. Spirit Airlines operates an all-
Airbus fleet of over 80 aircraft inservice composed of mainly A320 along with A319 and A321. The current in-service fleet has an average age of 5.7 years.
Volume II—Issue 9
Airline Profits
July-August 2016
Volume II—Issue 9
Profile The airline also has over 90 air-
2006 to 2015.
craft on order.
calculation. The Agility Index has a 15%
Ownership and Subsidiaries
People Index
weight in the overall APSI.
Spirit Airlines currently has a simple ownership structure: 100 percent of the equity is publicly traded.
Leadership, People and Opera-
The Airline Profits People Index is based on a scale of 1 to 10.
Summary
Spirit Airlines has a high People
Spirit Airlines’ Airline Profits
Index of 8.4. Five factors were
Sustainability Index of 8.6 is es-
considered in our calculation.
sentially driven by the Perfor-
tions The People Index has a 45% Spirit Airlines is currently led by
weight in the overall APSI.
mance Index, which in this case happens to be very high. This is
Robert Fornaro, in the role of
mainly due to the fact that over
President and Chief Executive
the past decade (2006-2015), Spir-
Officer, who replaced Ben Baldanza in January 2016. And as of 2015, the airline employed over 49,000 people. It is worth noting
that the time period covered in our analysis coincides with the span of time Ben Baldanza was
Performance Index The Airline Profits Performance Index is based on a scale of 1 to 10. Spirit Airlines has a very high Performance Index of 9.5.
years out of ten. In addition to that, the airline has posted above average operating and net profit
margins.
Five factors were considered in
With a high People index and
our calculation.
very high Performance indices,
President and CEO of Spirit AirThe Performance Index has a 40%
lines.
it Airlines was profitable ten
weight in the overall APSI.
our primary recommendation is that Spirit Airlines would do well
Headquartered in Miramar, Flor-
to focus on improving its Agility
ida, Spirit Airlines uses Fort
index.
Lauderdale International Airport as its main operational base. Airline
Profits
Sustainability
Agility Index The Airline Profits Agility Index is based on a scale of 1 to 10.
Profile
Spirit Airlines has a relatively
As mentioned at the beginning of
high Agility Index of 7.0. Seven-
this review, our analysis covered
teen factors were considered in
a 10-year period ranging from
our calculation.
14
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Expectations
“High expectations are the key to everything.” — Sam Walton
Airline Profits
July-August 2016
Volume II—Issue 9
“ The key to abundance is meeting limited circumstances with unlimited thoughts.
― Marianne Williamson
Airline Profits
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July-August 2016
Volume II—Issue 9
Perspective Norwegian Air: Is the US Outcry Justified?
Delta Air Lines, United Airlines and American Airlines have formed the Joint Carriers to prevent Norwegian Air International from flying to the USA. Last year, it was against the Gulf carriers, this year, the American outcry is against a European airline: Norwegian Air. Indeed, the flag carrier of Norway has set up a subsidiary in Ireland, in order to offer connecting flights to the USA.
This arrangement would allow them to take advantage of existing the Open Skies agreements between the USA and the Euro-
pean Union. Ireland is known for its favorable business tax law. However, the protest against Norwegian Air International, the Irish subsidiary
US airlines alone have made US $ 44.1 billion in cumulative net profits over the past five years. That represents some 57% of the financial results posted by the global airline industry. Around that same period of time, Norwegian Air was struggling to make profits, if any.
of Norwegian Air, is not about them taking advantage of a favorable fiscal environment but rather Ireland’s labour law. Ac-
cording to their US opponents, Norwegian
Air
International
would allegedly hire “cheaper flight crews” from Asia.
This practice will then allow
The outcry has since garnered
them to operate cheaper flights to
support over the past couple
the USA, in what is anticipated as
years not only from commercial
cut-throat competition. As a re-
airline unions, but also from pri-
sult, American jobs would be lost
vate pilot unions and US Con-
as US carriers are forced to aban-
gress
don transatlantic routes.
candidates seeking the US Demo-
members.
Furthermore,
cratic Party nominations for the
18
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A Norwegian Air Boeing 737. Photo Credit: Creative Commons CC0
2016 US presidential election,
The US protesters are asking
If this were so, then that would
namely Hillary Clinton and Ber-
their Government to revoke the
be in sharp contrast with the
nie Sanders have also expressed
temporary permit and simply
open-mindedness
their strong opposition to grant-
reject the AOC application made
American people in the past.
ing a permanent US air operator
by Norwegian Air International.
Such American open-mindedness
certificate (AOC) to Norwegian
Obviously,
has contributed a great deal to
Air International.
involved in this argument may
Indeed, after delaying the matter for about two years, the US Department
of
Transportation
(DOT) has finally granted a temporary permit to Norwegian Air International. The DOT may be granting a final AOC in the near future.
Airline Profits
being
emotionally
make it difficult to look at the big picture. However, as an objective observer, guided mainly by facts,
one may ask the following question. “Are US airlines really afraid of international competition to the extent of pushing their Government into protectionism?”
July-August 2016
that
guided
the advent of aviation, that of the airline industry and the open sky concept. All these combined have pushed humanity much further ahead than one could have imagined possible. This is a unique legacy, which American people should be very proud of and
strive to preserve.
Volume II—Issue 9
Airline Profits
July-August 2016
Volume II—Issue 9
Perspective
Having said that, here are some
years. Furthermore their 10-year
USA? Why, they don’t need to go
facts to consider. Firstly, the US
cumulative net profits amounted
through the hassle of an “Irish
airlines alone have made US $
to US$ 130 million. That is very
flag of convenience” before oper-
44.1 billion in cumulative net
negligible compared to the earn-
ating flights to the USA with the
profits over the past five years.
ings that some US airlines have
so-called “cheap labour”.
That represents some 57% of the
been reporting for a single quar-
financial results posted by the
ter lately.
global airline industry. Around that same period of time, Norwegian Air was struggling to make
profits, if any. In fact, in 2014, Norwegian Air lost US$ 164.71 million. That was more money than the cumulative profits they made over the previous three
20
Thirdly,
another
points
that
seems to be overlooked is the fact
Secondly, if the reasoning of not
that Norwegian Air operates al-
wanting to set a precedent of
most exclusively a Boeing fleet of
“flags
holds
airplanes. In fact, they have a few
true, then one should consider
dozens more Boeing aircraft on
the
Why
order. And by that very fact,
aren’t the US protesters petition-
Norwegian Air is providing and
ing their government to ban all
sustaining American jobs.
of convenience”
following
question.
Asian airlines from flying to the
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All facts considered, the US airlines outcry against Norwegian Air International appears to be unjustified and over-amplified. In reality, this sends a very awkward message, which sounds
like the following.
“You are
very welcome to buy as many airplanes made in USA as you want. Just make sure that you do
In reality, this sends a very awkward message, which sounds like the following. “You are very welcome to buy as many airplanes made in USA as you want. Just make sure that you do not intend to fly them to the USA.”
not intend to fly them to the
USA.” And that is certainly not
Once again, what it would take to compete effectively in an open-skies
the type of message the greatest
environment is: practical, down-to-earth, common sense. And that cer-
nation on earth ought to be send-
tainly does not require government intervention to prevail.
ing overseas.
Airline Profits
July-August 2016
Volume II—Issue 9
“ What is called genius is the abundance of life and health.
― Henry David Thoreau
Airline Profits
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Airline Profits
July-August 2016
Volume II—Issue 9
Performance Record Profitability: Will African Airlines Ever Join the Feast?
According to the International Air Transport Association (IATA), the overall profits for 2015 exceeded expectations by nearly US$ 6 billion, which is 20% higher than anticipated. In fact, airline profitability has been reaching record heights for the past three years, in part due to low oil prices. However, the African airline industry is continuously losing money. A pertinent question is: will African carriers ever join the feast?
Over the same 3-year period, African airlines with rare exceptions have collectively lost US$ 2 billion. As a matter of fact, Afri-
can carriers have lost as much money in three years (2013-2015) as the cumulative loss they have reported in the preceding decade
African carriers have lost as much money in three years (2013-2015) as the cumulative loss they have reported in the preceding decade (2003-2012).
(2003-2012). Another important loss (US$ 0.5 billion) is likely to happen again in 2016, if one considers the midyear forecast that the Internation-
al
Air
Transport
Association
(IATA) released at their 72nd Annual General Meeting (AGM) in Dublin, Ireland in June 2016.
By contrast, US airlines are lead-
As the saying goes: a feast usual-
ing the pack thanks to low oil
ly precedes a famine. And this
prices, strong demand and im-
line of keen observation also ap-
proved efficiency as a result of
plies to the airline industry in
major consolidations. Airlines in
general, due to its cyclical nature.
other regions have also been improving their financial performance.
24
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Therefore, the question worth asking is not if market conditions
IATA Aviation Day—Africa. Abuja, Nigeria. May 2016. Photo Credit: IATA
are going to change for the
And more importantly what can
worse, namely a slow demand
we do about it? How can we pre-
combined with higher oil prices,
pare beforehand in order to sus-
but rather when will market con-
tain our business?” These are cer-
ditions change suddenly?
tainly far from being easy ques-
The other questions that African carriers ought to be asking themselves is: “If we are losing a great
tions, however they are critical for African airlines; the adequate answers to which can ensure
deal of money in good times
their sustainability. Well, because
while everybody else is enjoying
oil prices are certainly going to be
record profits, how much more
going up at one time or another.
money are we going to be losing
And that may in turn, directly or
in bad times?
indirectly slow down demand.
Airline Profits
July-August 2016
In fact, IATA is already noticing a slowdown in passenger demand. This slowdown can be accentuated further, if oil prices were to go up suddenly. Furthermore, additional taxes are likely to be imposed as part of initiatives to curb climate change. That would mean additional cost burden on airlines, especially in Africa. Hence the following question: is the African airline industry prepared for that? We all know the answer to that one: it is a resounding “No”.
Volume II—Issue 9
Airline Profits
July-August 2016
Volume II—Issue 9
Performance
Now, as highlighted in a previ-
Ethiopian Airlines, one can be
So, in reality, unless we are miss-
ous Airline Profits article about
hopeful that it is indeed possible
ing something of significant im-
open skies and the Yamoussouk-
for African airlines to become
portance, such a criticism has no
ro Declaration, African airlines
sustainably profitable. Some crit-
basis. In a previous article of Air-
do face several challenges. And
ics have gone to the extent of dis-
line Profits, we have highlighted
most of these challenges can be
counting the exemplary perfor-
the necessity of Re-thinking the
effectively alleviated by African
mance of Ethiopian Airlines by
Airline Business, so as to ensure
governments. However, in order
attributing their success to the
that critical components of sus-
to get there, it is necessary for
fact that the airline does not pay
tained profitability are effectively
African heads of State and politi-
income taxes, nor dividends to
incorporated into airline business
cal leaders to fully recognize the
their State-owner. However, the
models. Based on past and cur-
critical role of aviation as a pow-
fact is that a business is not ex-
rent
erful driver for economic growth.
pected to pay income taxes nor
clearly to be the world region
Yet at the same time, considering
declare dividends, unless is has
that needs to begin that process
the steady financial success of
posted profits in the first place.
sooner rather than later.
26
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results,
Africa
appears
Attention
“When you can do the common things of life in an uncommon way, you will command the attention of the world.” — George Washington Carver
Airline Profits
July-August 2016
Volume II—Issue 9
“ We are buried beneath the weight of information, which is being confused with knowledge; quantity is being confused with abundance and wealth with happiness. ― Tom Waits
Airline Profits
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Airline Profits
July-August 2016
Volume II—Issue 9
Paradigm Should Airlines Reconsider How They Generate Revenues?
From the outset this question might appear controversial, especially knowing that according to the International Air Transport Association (IATA), the airline industry is anticipated to post much more profits in 2016 than initially forecasted, only six months ago. And this would be the third consecutive year that airlines are collectively setting annual records in terms of profitability.
Strong demand for air travel, network efficiency and lower oil prices have been highlighted as the main drivers of this excep-
tional surge in profits. However, it is worth mentioning that jet fuel, which accounts for nearly 30% and in some regions close to 40% of an airline’s direct
The airline industry is anticipated to post much more profits in 2016 than initially forecasted, only six months ago. And this would be the third consecutive year that airlines are collectively setting annual records in terms of profitability.
operating costs, does have a greater impact in setting these profit records. Past Airline Profits articles have
hinted at the need for re-thinking the airline business. The process leading to that objective must of
airline
effectiveness
and
thinking airline profitability. In this particular article, we are going to focus on why airlines should
reconsider
how
make money.
necessity include re-thinking airline leadership, re-thinking
30
re-
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they
As pointed out in another article, the airline business is mainly about people. Yet, a key question airline leaders ought to consider is whether their current business practices truly and fully take into account people’s needs and wants, when it comes to air travel.
Man holding a model airplane. Photo Credit: Envato Photodune
Now, before jumping too quickly
public, customers included real-
And no one feels resentful at the
to an easy answer such as: “Off
ly, resents the fact that Apple is a
bus or train company for being
course, we do!” let us consider a
very profitable company. The
profitable. Be it in the case of Ap-
couple of analogies, which Tony
same applies to Starbucks. No
ple, Starbucks, a bus or train
Tyler, the outgoing Director Gen-
one walks into an Apple Store or
company, people generally feel
eral and CEO of IATA has shared
a Starbuck coffee shop and feels
that they are getting fair value for
at past AGMs. The first one is
it necessary to bargain their pric-
what they have paid for: they are
Apple and the second one is Star-
es on the account of the profits
getting
bucks. Both are profitable and
these companies have reported.
Therefore, it is as if, customers
both are well respected brand in
No one feels like Apple and Star-
are giving their consent to these
the eye of the general public. Alt-
bucks do not deserve to be profit-
businesses to charge them as
hough
of
able. Besides, although air travel
much as they see fit and at the
profiting by child labour may
is now considered to be very sim-
same time their approval to be as
negatively
Apple
ilar to travelling by bus or train.
profitable as they could possibly
brand to some extent, the fact re-
There is no such thing as bargain-
be. When it comes to airlines
mains that nobody in the general
ing bus or train ticket prices.
however, it is a different story.
recent
allegations
impact
Airline Profits
the
July-August 2016
their
money’s
worth.
Volume II—Issue 9
Airline Profits
July-August 2016
Volume II—Issue 9
Paradigm The general feeling is that airlines
runs counter to the conventional
attaches to that product or ser-
are charging too much for their
wisdom, which is prevalent in
vice. Now, whether that percep-
services and that they do not de-
the airline industry. As a matter
tion is fair and reasonable or not
serve to be making record profits.
of fact, some industry leaders are
depends mainly on how well the
Therefore, they expect to see and
expressing more and more opti-
provider has conveyed to the
get lower and lower fares as long
mism about the future of airline
customer the benefits attached to
as airlines are reported to be
financial performance. Their pos-
that product or service. And this
making
even
itive feeling does have some basis
explains in part why some cus-
though airlines in some regions
to it. And as Airline Profits, we
tomers are willing to pay a pre-
are claiming that airfares are at
do hope that such wishful think-
mium without bargaining, for
their lowest point in history.
ing does become reality. Howev-
things that are nice to have, while
How can an airline CEO justify
er, in the long run, it is not the
at the same time look for the
the fact that the layman thinks, it
optimism of airline CEOs that
cheapest possible flight, which
is not fine and feels resentful to-
will prevail. It is rather the level
they expect to be comfortable, on
ward an airline, which provides a
of customer engagement, satis-
time and safe enough to get them
service as vital to the economy as
faction and loyalty that will de-
to their desired destination alive.
air transportation, because of rec-
termine the sustainability of the
And that is much more valuable
ord profits. Especially knowing
airline industry.
than simply going from point A
“huge
profits”,
that the same layman thinks it is fine and in fact does not even care how many billions of profits
From arbitrary ancillary fees to unilateral frequent flyer program revamps,
combined
with
to point B. And that is why at Airline Profits, we strongly think that there is an urgent need for re
Apple can make in a few months
cramped aircraft seats, some air-
-thinking the airline business,
by selling “nice to have” items
lines are undoubtedly sowing the
which implies re-thinking how
and can make many folds more
seeds of customer dissatisfaction.
airlines generate revenue thus
than nearly 300 airlines com-
Consequently, they are gradually
profits. In fact, the time to chal-
bined.
leaving themselves exposed to
lenge the status quo and re-
This strongly suggests that some-
potential disruptive competitors
invent the airline business is
thing is fundamentally not right.
or substitutes. With that said, a
now. Conversely, maintaining
And this is certainly not about
key determining factor of cus-
the
the layman’s perception, but ra-
tomer willingness to pay a given
“business as usual” approach can
ther about the airline business
price for a product or service is
only prove to be a losing strategy
itself. Obviously this viewpoint
the perceived value the customer
further down the road.
32
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status
quo
through
a
Observation
“Look deep into nature, and then you will understand everything better. ” — Albert Einstein
Airline Profits
July-August 2016
Volume II—Issue 9
“ Today we have access to highly advanced technologies. But our social and economic system has not kept up with our technological capabilities that could easily create a world of abundance...
― Jacque Fresco
Airline Profits
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@AirlineProfits
Available in Kindle & Paperback on Amazon
Airline Profits
July-August 2016
Volume II—Issue 9
Platform The First CSeries Is Delivered: Will Bombardier Beat the Odds?
After years of delay and the related program cost overrun, the Bombardier CSeries has achieved another major milestone on June 29, 2016. Indeed, the first CS100, the smallest version, was effectively delivered to Swiss International Airlines, the launch customer of the Bombardier all-new family of aircraft. The historic event was celebrated at the Bombardier Mirabel plant, North of Montreal.
The great excitement surrounding this momentous achievement was shared by the representatives of both Canadian manufac-
turer and the European carrier, along with employees, Canadian government officials, suppliers and the media. Thus, this first CS100 will enter revenue service on July 15, 2016 with a SWISS operated flight from Zurich to Paris CDG. By the same token, Bombardier will de-
liver the first CS300 to airBaltic later this year.
36
There is still a long way to go before the CSeries establishes itself as the game-changer the market has been eagerly waiting for. However, one can see that Bombardier is succeeding at bringing the program back on track. There is still a long way to go
From
before the CSeries establishes
Transport Canada, then the FAA
itself as the game-changer the
and EASA to significant sales to
market has been eagerly waiting
Air Canada and Delta Air Lines,
for. However, one can see that
the
Bombardier is succeeding at
Equipment Manufacturer (OEM)
bringing the program back on
appears to have regained control
track.
over the program.
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the
certification
Montreal-based
by
Original
Rob Dewar, VP CSeries Aircraft, Bombardier and Peter Wojahn, CTO, SWISS. Photo Credit: Bombardier
This feeling seems to be well con-
And they tend to bring along a
Likewise, Airbus has had its chal-
firmed by the hostile comments,
defining moment, when it is
lenging times with the A380 and
which some top executives from
necessary to stand tall and face
recently with the A320neo. Now,
the competition, namely Airbus
challenges head-on, no matter
it is the turn of Bombardier with
and Embraer, have recently made
what.
the CSeries. As things seem to be
to the media.
To honor such a unique and re-
All told, the CSeries program is
warding moment requires the
the future of Bombardier and
best effort and performance.
consequently that of the Canadi-
In fact, Boeing has had its own
an aerospace industry. As such
defining moment with the 747
it is a make-or-break opportuni-
and later with the 787 Dream-
ty. Such once-in-a-lifetime op-
liner.
falling back into place, we hope that the Canadian aircraft manufacturer will do whatever it takes to stand boldly behind the allnew CSeries in service, so as to beat the odds.
portunities do come to individuals and organizations alike.
Airline Profits
July-August 2016
Volume II—Issue 9
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Airline Profits
July-August 2016
Volume II—Issue 9
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