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TOURISM POLICY WORKSHOP November 2017
Confronting Challenges and Seizing Opportunities . . . . Role of the Public and Private Sector
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I ’m go ing to ta lk about …
Ryanair (Role of private sector)
Tourism trends / opportunities
Role of public sector
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Ryanai r –
Growing ever yw here , dr iv ing down pr ices
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Europe ’s Favour i te A i r l ine
Lowest fare/lowest cost carrier – gap widens
No 1, Traffic – FY18 129m (+8%)
No 1, Cover – 87 Bases/208 apts/430 a/c
240 a/c order = grow to 200m p.a. by FY24
Rapid recovery of rostering failure in Sep
Slower growth in FY18 & FY19
H1 profits up 11%; FY guidance unchanged
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Avg. Fare Change % > Ryanair
Ryanair €41 -13%
Wizz €51 -11% +24%
easyJet €77 -15% +88%
Norwegian €78 -3% +90%
Air Berlin €115 -7% +180%
IAG €198 -14% +383%
Air France/KLM €215 -7% +424%
Lufthansa €218 -4% +432%
Avg Competitor Fare €136 +232%
Europe ’s Lowest Fares
(Source: Latest FY results/Annual Reports)
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(€ p pax ex-fuel) RYA WIZ EZJ NOR AB1 LUV
Staff 5 5 9 15 22 49
Airport & Hand. 7 11 21 17 28 9
Route Charges 6 6 6 7 8 0
Own’ship & maint. 6 15 8 26 40 18
S & M other 3 3 7 8 33 18
Total (PY) 27 (28) 40 (40) 51 (55) 73 (73) 131 (116) 94 (92)
% change (reptd.) -5% +1% +3%(stg) +2% +13% +2%
%> Ryanair +48% +89% +170% +385% +248%
Europe ’s Lowest Costs
(Source: Latest FY results/Annual Reports)
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87 bases
208 airports (111 Prim)
33 countries
1,800 routes
129m c’mers (FY18)
430 x B737 fleet
240 x B737s on order
Europe ’s No. 1 Coverage
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Europe ’s No. 1 Mar ket Share (15%)
*(Source: CapStats intra EU Depart capacity Apr 17 – Mar 18)
Country (Cap m)* No. 1 No. 2 No. 3 Share
UK (139) easyJet BA 17% Monarch
Spain (132) Vueling Iberia 18%
Germany (131) Luft AirBerlin 9%
CEE (105) Wizz Aegean 15%
Italy (96) Alitalia easyJet 27%
Greece (29) Aegean easyJet 11%
Portugal (28) TAP easyJet 20%
Poland (21) LOT Wizz 29%
Ireland (18) Aer Lingus BA 47%
Belgium (17) Brussels Air Jetairfly 28%
= Bankruptcy
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Cur rent Developments
Lower fares & AGB drives growth (129m)
Customer initiatives succeeding (97% LF)
Alitalia (24m), AB1 (29m) & Mon (5m) bust
Pilot rostering failure in Sep
Acted to recover in Sep – slow W18 growth
Unchanged FY guidance €1.40bn to €1.45bn
Brexit Apr 2019 disruptions more likely?
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Lower fares AGB dr ive g rowth to 200m p.a .
73
93
101
109
120
129
138
152
162
175
189
200
60
80
100
120
140
160
180
200
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
FY18 cut 131m 129m (+8%)
FY19 cut 142m 138m (+7%)
FY20 unchanged
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Customer In i t iat ives Succeeding
MyRyanair over 30m members, (40m by y/e)
50% (approx.) customers select preferred seats
Plus Products 7% (approx.) in year 3
Flight connections at Rome & Milan going well
Ryr Rooms – over 250,000 hotels & 7.5m rooms worldwide
Travel credits for Ryr Rooms in December
© Ryanair 2014
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Summer 17
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Summer 2017 – 57% g rowth on top 4 mar kets
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W inter 2017 – 70% g rowth on top 4 mar kets
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Bases – Standar d ised , E f f ic ient , E f fect ive
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Tour ism –
Trends , oppor tun i t ies , cha l lenges
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Wor ld Tour ism Heal th
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European Tour ism Changing
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Saturat ion
European tourism can be overweight in popular hubs & major cities
Why?
- Good product offering
- Airline connectivity
- Marketed well
- Human nature to repeat visit
Requirement to promote diversity
- Regional
- Seasonal
- Customer
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Popula The Need to Diversify tion v tourists City Population Tourists Ratio
Barcelona 1.6m 8m 1 : 5
Paris 2.2m 16m 1 : 7.2
London 8.7m 32m 1 : 3.7
Berlin 3.5m 12m 1 : 3.4
Amsterdam 800k 5m 1 : 6.2
Dublin 1.3m 8m 1 : 6
Populat ion v Tour is ts
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Promot ing d iver s i ty
Wild Atlantic Way perfect example of regional/product diversification
Attract new segments, e.g. students and silver surfers, in shoulder periods
Build repeat visits – weakness for Ireland, excluding VFR
77% inbound vs. 23% outbound customers
95% leisure vs. 5% business traffic
Top markets: UK, IT, PL
Example: Ryanair in Malta
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Airports & Government attract airlines through low charges & taxes
Airlines deliver customers through low fares and connectivity
National, regional, local tourism bodies develop alternative product
Keep costs of tourism, including accommodation, low
Promote destination, joint marketing very effective
Simple model o f d iver s i f icat ion
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Summar y o f I r i sh Chal lenges / Oppor tun i t ies
• Over-dependence on UK market
-40% of 2016 visits, High proportion of VFR, Down 7-8% in 2017
• Germany, Scandinavia, Italy, Spain present opportunity
-Superb connectivity with Ryanair, Target Hamburg, Berlin
• Dublin as transatlantic hub
-Dublin more intra-EU destinations than Heathrow
• Relentless cost focus (airports, taxes, accommodation and visitor costs)
-Sterling weakness a double competitive threat
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Dubl in S18
5 new routes:
RAK, MUC, NAP, PFO, STR
90 routes
27 based a/c
12.9m c’mers p.a.
9,675 on-site jobs
€1.2bn savs p.a.
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I r e land S18
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4 bases
7 airports
130+ routes
14.9m c’mers p.a.
11,175 jobs (ACI)
€1.4bn savs p.a.
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Role o f Publ ic Sector
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15
20
25
30
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2008 2009 2010 2011 2012 2013 2014 2015 2016
APD Rest r icts Growth ( Pax M) - I r i sh Example
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27 23 23 24
Travel Tax Intro. JAN ‘09
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Brexi t : Potent ia l fo r mar ket d is r upt ion
?
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Hard Brexit automatically triggered by Art 50 if no deal
No fallback for aviation market access in WTO
New UK-EU27 Air Services Agreement required
Transitional agreement would provide immediate solution
Timing becoming critical
Brexit
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Global hub for aviation business and innovation
Lead reforms at European level
Tackling French ATC strikes
Creating Upper European Air Space
Aviation cost is a tourism issue (airports, taxation, intrusive regulation)
Ireland Inc. to champion aviation competitiveness
© Ryanair 2014
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European Airspace Today
Constrained ATCO productivity
Too many Control Centres
Lack of Service Continuity
Not Integrated
Not Standardised
Not Efficient
Fragmented Airspace restricted by national borders
Restrictive Air Traffic Controller Licencing and Training
Based on fixed lines of flying
Not taking advantage of modern air ground technology EU Airspace Architecture ICB Sept 2017 – A4E Initial thoughts
Monopoly domination of European air space
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Oppor tun i t ies for co -operat ion
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Joint adver t is ing : T he W i ld At lant ic Way
Tourism Ireland - WILD ATLANTIC WAY Aug-Sep 16 - DE market
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Ger many ’s Most V is i ted A i r l ine Webs i te
(Source: Similarweb.com, airlines in January 2017)
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Wor ld ’s Most V is i ted A i r l ine Webs i te
2.5m visits a day in 2017
In August, we had more visitors worldwide than
BA, Lufthansa, Air France and KLM put together.
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I r e land – Ger many: 12 Ryanai r Routes
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Ryanair supports this EU initiative
Opportunities for regions & cities
Start planning now
Eur opean Capi ta l o f Tour ism
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THANK YOU
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Sep P i lot r oster ing fa i lu re – W hat happened?
S17 peak schedule (400 a/c) fully crewed in Jul & Aug
9 month FTL transition period 1 Apr to 31 Dec 2017
Over 50% crews have full month off in Sep/Oct/Nov/Dec
Canx 2,100 flts (2%) Sep/Oct – 300,000 c’mers disrupted
Ground 25 a/c (6%) Nov to Mar – 400,000 c’mers affected
98% of c’mers reaccom/refunded in 18 days + €40 voucher
Fixed rosters, change Ops mgt, better planning
Pay increase & improved T&C’s for pilots
Attract Mon, Nor & Jet2 B737 pilots