madeira airlines by gavin eccles

8/8/2019 Madeira Airlines by Gavin Eccles

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Low-Costs &Madeira

µIs the Dream

Delivering?¶Thoughts &

Understandings«

October 2010Gavin Eccles



There are ONLY 2 Real low-Costs in Europe



«The Rest are HYBRIDS



Introduction of easyJet (ex-UK)«Arrivals to FNC

Source: ANAM; Analysis: neoturis

2007 2008 2009

Gatwick (easyJet) 0 59,521 46,005

Stansted (easyJet) 14,229 89,361 57,561

Bristol (easyJet) 6,138 38,923 40,159

Total (easyJet) 20,367 187,805 143,725

Total (All airlines) 503,034 587,501 428,785

easyJet Share 4% 31% 33%

TAP &CHARTERS



LGW Specific: More then just easyJet«Arrivals to FNC


easyJet Total(easyJet & All Airlines)

easyJet Share

2007 0 209,450 0

2008 59,521 193,347 30%

2009 46,005 145,695 33%

TAP &CHARTERS



LGWFNC: Loads vs. Yield«

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Oct-0 9 ov-09 De c-09

an -10 F eb -10

Ma r -10

Apr -10 May-10

Jun -10 J u -10 A ug -10

S ep-10

loa d Y e ld

So ur ce: e asyJ e t ; Analysis : ne otur is

Loa ds

- 1.3%

Yie ld- 21%



LGWFNC: Performance vs. Plan«

Source: easyJet ; Analysis: neoturis

£

£1 ,

£ ,

£3 ,

£ ,

£5 ,

£6 ,

c t- o - ec - Jan-1

e -1

ar-1

A pr-1

ay -1

Jun-1

Jul-1

A u -1

Sep-1

lan



Destinations & Airlines:Changing Emphasis«

Source: easyJet ; Analysis: neoturis



Low Cost vs. Tour Operation: A big SURPRISE« or not?

First« The flight

194 .98 * 2 = 389 .9

Searched: Thursday 7 th October




Then« The Hotel

2 Peo ple for Se en -Nights = 7 54.74





And« The Transfers

µRound -Trip Air port to Hotel = ¼ 0 or 52




Independent Travel Package Holiday

Flights (easyJet) 388

ThomsonHolidays

Hotel 7 54

Transfer 52

Total £1,194 £1,064



Low-Costs to Madeira: Domestic



LISFNC: 2007-2009Passengers, Share & Load-Factors

2007

easyJet SATA TAP Total

Passengers No ser ice 15 0 47 1 6 29 126 779 543

Market Share No ser ice 20% 80%

Load Factor No ser ice 61 % 7 3%

2008

easyJet(only Oct/Nov/Dec)

SATA TAP Total

Passengers 29 942 143, 955 5 99 ,700 77 3,5 97

Market Share 4% 18% 78%

Load Factor 76% 56 % 68%

2009

easyJet SATA TAP Total

Passengers 182 ,3 00 15 2 ,99 3 5 74 ,1 08 909 ,40 1

Market Share 20% 16 % 64%

Load Factor 83% 60% 69%




LISFNC: Impact of easyJet


2009 vs. 2008

SATA TAP Total

PassengersCarried

+ 9,038 - 25,592 + 135,804

Tour Operator Focus:Gained passengersthrough package-price reductions

easyJet attacked on price:Loss of seat-only

passengers and someshort-break travel

Emergence of easyJet:Grew the market

significantly based onchanging price perception



Therefore« More Tourists to Madeira


+ 37,000Tourists

A . Stay =3.1 nights

Therefore:

11 4,700Extra

Room -Nights



Companh ia sT P

TTAP & SATA

e a s Je

2 9 Var. 0 9 08 200 9 Var. 0 9 08 200 9 Var. 0 9 08 200 9 Var. 0 9 08 200 9 Var. 10-08

T P 138 ¼ -1,4% 12 ¼ -17, 2% 106 ¼ -14,5% 69 ¼ -34,3% 110 ¼ -15,8%

SA T A 137 ¼ -23,5% 11 9 ¼ -26,1% 111 ¼ -17, 2% 71 ¼ -29 ,7% 110 ¼ -23,8%

TAP & SATA 138 ¼ -13,8% 122 ¼ -21,8% 109 ¼ -15,9% 70 ¼ -32,0% 110 ¼ -20,0%e a s Je 92 ¼ 83 ¼ 64 ¼ 36 ¼ 6 9 ¼

2010 Var. 10-0 9 2010 Var. 10-0 9 2010 Var. 10-0 9 2010 Var. 10-0 9 2010 Var. 10-08

T AP 88 ¼ -36, 2% 78 ¼ -37,6% 66 ¼ -37,7% 59 ¼ -14,5% 73 ¼ -33,6%

SA T A 7 9 ¼ -42,3% 74 ¼ -37,8% 62 ¼ -44,1% 66 ¼ -7,0% 70 ¼ -35,8%

TAP & SATA 84 ¼ -39,3% 76 ¼ -37,7% 64 ¼ -41,0% 63 ¼ -10,7% 72 ¼ -34,7%e a s Je 69 ¼ 60 ¼ 44 ¼ 31 ¼ 51 ¼

2010 Var. 10-08 2010 Var. 10-08 2010 Var. 10-08 2010 Var. 10-08 2010 Var. 10-08

T AP 88 ¼ -37,1% 78 ¼ -48,3% 66 ¼ -46,8% 59 ¼ -43,8% 73 ¼ -44,0%

SA T A 7 9 ¼ -55, 9% 74 ¼ -54,0% 62 ¼ -53,7% 66 ¼ -34,7% 70 ¼ -51,1%

TAP & SATA 84 ¼ -47,6% 76 ¼ -51,3% 64 ¼ -50,4% 63 ¼ -39,3% 72 ¼ -47,8%e a s Je 69 ¼ 60 ¼ 44 ¼ 31 ¼ 51 ¼

Variação do preço médio entre 2010-09

Companh ia sVariação do preço médio entre 2009-08

130 ¼144 ¼137 ¼71 ¼

105 ¼101 ¼103 ¼45 ¼

156 ¼90 ¼

124 ¼134 ¼129 ¼70 ¼

Méd iaVariação do preço médio entre 2010-08

Méd ia

Méd ia

Méd ia

140 ¼17 9 ¼160 ¼

Last minute 1 se mana ant es 1 mê s ant es 3 m eses ant esCompanh ia s

1 se mana ant es 1 mê s ant es 3 m eses ant esLast minute

Last minute 1 se mana ant es 1 mê s ant es 3 m eses ant esPreço médio em 2008

80 ¼

151 ¼161 ¼

La s t m inut e 1 se mana ant es 1 mê s ant es 3 m eses ant esCompanh ia s

LISFNC: G ro wth, But at a Co st: Yie ld i s b ei ng HIT ha rd !!

S ou rce : ANAM; Ana lys is : ne otu ris



Where to Focus Attention?



For Madeira«Seasonality is not a Big Issue

No. of Weekly Flights:Summer 2010

No. of Weekly Flights:Winter 2010/2011

Lisbon 893 821

Porto 376 372

Faro 362 148

Madeira 79 64

Source: Airline Timetables; Analysis: neoturis



Weekly Direct Flights to Madeira:Scheduled/Charter Winter 2010/2011

Source: Airline Timetables; Analysis: neoturis



So« Where to Place Emphasis?Air Berlin Condor TuiFly

Cologne -- -- 1

Dusseldorf 2 -- --

Frankfurt -- 1 1

Air Berlin Condor TuiFly

Munich 1 1

Nuremburg 2 -- --

Stuttgart-- 1 1

5

6 Air Berlin Condor TuiFly

Hamburg 1 1 --

Hannover 1 -- 1

4

No . of Weekly FlightsSource: Airline Timetables; Analysis: neoturis



Approach«Best way to work the Airlines

Traditionals Hybrids Charters Low-Costs



Traditionals«

Push seat -only through www.ta p. co .uk

Lobby TAP and highlight the high % of un -sold seats

e elo p co -promotions with key , premium -leisureoperators:

Who in turn can negotiate lower net -fares with TAP

Em phasize the im portance of schedule/flexibility:

³«You don¶t need to stay for 7 days«´



Traditionals«

All work with TAP,but, not so easily

with easyJet



Charters«

All about managing the trade:Is the GSA relationshi p working?

How are we pushing µ deals & offers¶ out to the key o perators

D o the agents know enough about Madeira?

Of course , the challenge for hoteliers is to

understand how to gain extra ancillary re enuewhen the guest is with you«

What can we push at the local le el!!



Low-Costs«

Changing how we work with such carriers:

In offering discounts to Tour O perators ± the low -cost carrier andthe dynamic -packaging model for Madeira will not work:

³« i t w i ll always be cheaper to travel on a trad i t i onal package«´

Therefore , look to push more , µstay for 7 and pay for 5 n i ght offers¶ , etc .:

Therefore , not percei ing to be dum ping price (and causing concernwith o perators) , and , with the o ption to gain ancillary re enues onthe nights being pushed as free«



Positioning is Key«

But , more im portantly , we need to change theposition of the destination«

- easyJet (and TAP) can hel p to sell weekend -breaks/short -breaks; focusing on:

48 or 72 hours in Funchal«



Positioning with Airlines«PREMIUM LEISURE

VALUE SEEKING

7-DAYRELAX

SHORT-BREAK/WEEKEND-BREAK

?

x

?



Future for Madeira?Traditionals Hybrids Charters Low-Costs

PROTECT:

VALU AB LEOFFERWITH

SEAT -ON LY AN D

OPERTOR ALLOTMENTS

LESSRE LIANCE

ONOPERATORS

AIR LINESBECOMINGOPERTORS!

AB LE TOCHA LLENGE

TRA D ITIONALCHARTERS

WILLREMAIN

BUT

WON¶TGROW«

TOO MAN YOTHER

D ESTINATIONSTO SERVE

WE NEE D

TO THINK AN D ACT

D IFFERENT LY

GROWNEW

SEGEMNTSNOT

ALTERNATIVETO

CHARTERS



Low-Costs &Madeira

µIs the Dream

Delivering?¶Thoughts &

Understandings«

October 2010Gavin Eccles

madeira airlines by gavin eccles

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