3 John Jackson

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Information about 3 John Jackson

Published on March 31, 2008

Author: Tommaso

Source: authorstream.com

Good Afternoon!:  Good Afternoon! John H. Jackson Senior V. P Marketing AvGroup, Inc Specialist in Latin American Aviation since 1988. www.avgroupinc.com Latin American Low Cost Carriers!:  Latin American Low Cost Carriers! A success in The Making! What’s the Difference!:  What’s the Difference! Low cost Single a/c type Secondary airports 10.7 hr a/c utilisation Point to point No freebies Limited agents sales Mostly paperless No IATA 5,500 pax per employee Full service Multiple fleet Types Primary airports 8.3 hr a/c utilisation 30% interline Full service 80% agent sales 70% paper tickets IATA 736 pax per employee Low Cost Carriers:  Low Cost Carriers - Young - Enthusiastic - Motivated - “Nothing is Impossible” Low Cost Carriers Advantages:  Low Cost Carriers Advantages Point to point routes Unified fleet High aircraft, crew and personnel utilization Low unit costs No intermediaries New direct channels for sells (internet) Secondary airport use Low Cost Carriers Disadvantages:  Low Cost Carriers Disadvantages Dependant on: High volumes “Substantial” growth Slots at major airports Salary Developments Avoidance of Unions Ability to stay “Low cost” over time Slide7:  The Growing LCC Network Traditional “Flag” Carriers:  Traditional “Flag” Carriers - Flat Life Cycle - Mature Staff – High Average Age - Old fashioned union agreements Traditional “Flag” Carriers Advantages:  Traditional “Flag” Carriers Advantages Well known and respected brands Large Customer Base – Strong Loyalty Programs Experienced management and staff Developed network (connections) Developed technology Developed Revenue, Capacity and Yield Management and Distribution Systems “Grandfather rights” for slots Fleet capacity Traditional “Flag” carriers Disadvantages:  Traditional “Flag” carriers Disadvantages Diversified company structure “High Responsibility” towards the society Complicated network operations – need for feed Complicated price structure Mixed fleet with low seating density Aircraft, crew and personnel low utilization Diversified products Too high unit costs Latin America & Caribbean...:  Latin America & Caribbean... 5% worldwide traffic 39 states 574 airports 100 airports moving 85% of traffic In which over 100 airlines operate Transporting over 100 million passengers LCCs in Latin America:  LCCs in Latin America Slower growth than other regions Two major LCCs in Latam GOL UAIR Low Cost – Full Service? TACA LAN Industry in Crisis…:  Industry in Crisis… Worldwide airlines that have disappeared: Panam - Swissair Laker - Airways Eastern - Braniff Sabena In “Chapter 11” or similar: United - US Airways Avianca - Alitalia SW - VASP ATA - Aerocontinente Azteca Industry in Crisis…:  Industry in Crisis… Latam airlines that have disappeared: Aces (Colombia) - AeroPeru (Peru) Transbrasil (Brazil) - LAPA (Argentina) Cruzeiro do Sul (Brazil) - Taesa (México) Avant (Chile) - National (Chile) VIASA (Venezuela) - Saeta (Ecuador) SAN (Ecuador) - Avensa (Venezuela) Ecuatoriana de Aviación - Faucett (Peru) LAP (Paraguay) Our region presents LCC opportunities;:  Our region presents LCC opportunities; In theory, our region is “low cost” due to: Low level of salaries Low costs of living Traffic growth Low penetration of air transport But unfortunately…. There is Lack of: :  There is Lack of: Long term policies that stimulate a healthy and sustained growth of Air Transport. Governmental understanding of the importance of Air Transport for Regional economies as an engine of Regional / Worldwide Integration. Understanding of the need for a low cost industry by our main partners (airports, ATS providers, suppliers, etc.) Incentives to foreign investment due to high protectionism to locals…which results in less competitiveness for the airline industry. Transparency In our opinion! :  In our opinion! The origin of Low Cost carriers has been the result of the critical situation faced by the airline industry worldwide. Our industry is going through a strong restructuring due to the adverse business environment. Airlines are being forced to migrate to a lower cost structure. The impact! Thank you for your very kind attention!!!:  Thank you for your very kind attention!!!

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