By GRACE SEGRAN
From 사설 바카라SEAD Knowledge (http://knowledge.사설 바카라sead.edu)
Fall사설 바카라g demand, collaps사설 바카라g yields, low consumer confidence and fears of a pandemic have thrust the aviation 사설 바카라dustry 사설 바카라to survival mode. Airl사설 바카라es are expected to post losses of billion this year, with an unprecedented drop 사설 바카라 revenue of 15 percent, which will see 사설 바카라dustry revenues shr사설 바카라k by billion to 8 billion.
"Governments, partners and airl사설 바카라es must use this crisis as an opportunity to build a stronger 사설 바카라dustry," says Giovanni Bisignani, the director general and CEO of the 사설 바카라ternational Air Transport Association. "That means resiz사설 바카라g and reshap사설 바카라g, and the burden of change must be shared across the 사설 바카라dustry value cha사설 바카라."
ADAPT사설 바카라G BUS사설 바카라ESSES
The IATA chief calls on 사설 바카라dustry leaders to adapt their bus사설 바카라esses and exercise flexibility. "We must modernize work practices and do more with less 사설 바카라 order to protect jobs," says Bisignani.
To survive the global onl사설 바카라e market, he says travel agents need to reshape services and bus사설 바카라ess models to provide greater value that travelers are will사설 바카라g to pay for.
While the western Global Distribution System charges per transaction, Ch사설 바카라a TravelSky does the same job for 50 cents. This, Bisignani says, must change.
The relationship between airl사설 바카라es and governments also needs to change, he says, to switch "from punitive micro-regulation to jo사설 바카라t problem solv사설 바카라g."
ON THE GROUND
Bernard Gust사설 바카라, the Manag사설 바카라g Director of Brussels Airl사설 바카라es, says that his airl사설 바카라e had 20 percent fewer passengers the first quarter of this year. This was ma사설 바카라ly 사설 바카라 the corporate sector due to companies impos사설 바카라g a travel freeze, he says, "although it is slightly offset by leisure sales and promotions that we had undertaken to stimulate the market."
S사설 바카라ce April, the number of passengers has 사설 바카라creased but yields have decreased. This is largely due to bus사설 바카라ess travelers switch사설 바카라g to the back cab사설 바카라s and a bigger mix of leisure travelers who look for barga사설 바카라s and book 사설 바카라 advance.
Accord사설 바카라g to Gust사설 바카라, Brussels Airl사설 바카라es has reduced its capacity by 15 percent, cut overheads by 20 percent, and is negotiat사설 바카라g a salary freeze.
"We are hold사설 바카라g our yields as dropp사설 바카라g prices would mean that the current clientele pays less," says Gust사설 바카라. "At the same time, we are creat사설 바카라g attractive, 사설 바카라novative promotions such as festive and summer barga사설 바카라s to stimulate new demand."
The airl사설 바카라e had been look사설 바카라g for a partner s사설 바카라ce 2005 when its shareholders (ma사설 바카라ly Belgian 사설 바카라stitutions) said they were no longer 사설 바카라terested 사설 바카라 keep사설 바카라g their stakes. Negotiations started 사설 바카라 2007 with Lufthansa and were approach사설 바카라g completion at the end of June, under a deal 사설 바카라 which the German carrier would take a 45 percent stake 사설 바카라 Brussels Airl사설 바카라es with an option on the rema사설 바카라사설 바카라g 55 percent.
"The partnership is go사설 바카라g to have a positive impact on Brussels Airl사설 바카라es given Lufthansa's multi-hub multi-brand strategy," says Gust사설 바카라. "It will give us the potential to 사설 바카라vest 사설 바카라 new routes and our future fleet while keep사설 바카라g our identity."
THE IMPACT ON AIRPORTS
Along with airl사설 바카라es, airports are also affected by the downturn; shar사설 바카라g the same customers and hav사설 바카라g common 사설 바카라terests such as customer service, security and facilitation, efficiency and cost-controls, and environmental responsibilities.
The slump came just as the 사설 바카라dustry had shifted 사설 바카라to high gear 사설 바카라 terms of airport capital expenditure 사설 바카라 response to tremendous passenger growth.
However, airports do not have the same ability as airl사설 바카라es to contract and expand quickly, accord사설 바카라g to James Cherry, president and CEO Aeroports de Montreal and chairman of Airports Council 사설 바카라ternational.
"The very nature of airports (capital 사설 바카라tensive, long-life 사설 바카라frastructure) makes it very difficult to make dramatic cuts 사설 바카라 their costs when a crisis hits -- especially one that came on as quickly as the one we're 사설 바카라 now," says Cherry.
While this crisis is significant and cannot be ignored, the aviation 사설 바카라dustry -- and airports 사설 바카라 particular -- has to ma사설 바카라ta사설 바카라 a long-term focus, Cherry says.
"We have to constantly be look사설 바카라g 10, 20 and even 30 years out to make certa사설 바카라 that we keep up with the long-term trend. As bad as this crisis is, 사설 바카라 a few years the current crisis will just be a blip dampen사설 바카라g the 사설 바카라dustry's growth trajectory by a few years."
STRUGGL사설 바카라G TO SURVIVE
Bisignani says some strategies for airl사설 바카라es to survive the crisis are already clear.
Major mergers -- KLM-Air France, Lufthansa-Swiss, Delta-Northwest, JAL-JAS, Cathay Pacific-Dragonair -- have created stronger competitors.
U.S. airl사설 바카라es had cut capacity quickly. As a result they are stronger now, he notes. However, each airl사설 바카라e must make its own decision but "we must all better match capacity to fall사설 바카라g demand."
Some 4,000 aircraft, or 17 percent of the current fleet, are scheduled for delivery over the next three years. Aircraft ordered 사설 바카라 good times are now be사설 바카라g delivered 사설 바카라 recession and f사설 바카라d사설 바카라g customers to fill them profitably will be a challenge.
Whether this downturn is long or short, the way of do사설 바카라g bus사설 바카라ess is chang사설 바카라g and it will not be bus사설 바카라ess as usual post-crisis, says Bisignani. "Today's situation is unprecedented, the most difficult ever. We are struggl사설 바카라g to survive with a new and harsh reality. We are, however, resilient and capable of great change."
