Transcription
Airline Solutions
AviaSolutions is a leading aviation strategy consultancybusiness and a division of GECAS.
Delivering valueto your businessAviaSolutions’ goal is to position airlines,airports, investors in aviation andgovernments so that they can achievea distinct and sustainable competitiveadvantage in their operating environments.AviaSolutions was founded in 2001 and since then,has conducted hundreds of advisory projects in40 countries around the world.Our consulting team is made up of aviation industryprofessionals, enabling us to bring ‘hands on’ experience toclient projects. Our reputation is based on deep knowledgeand experience of the sector combined with an excellent trackrecord of delivery for clients worldwide.AviaSolutions is based in London, UK and has established anemerging markets footprint with a presence in Dubai, UAE.Client sectors include: Airlines – projects span new airline feasibility, businessplanning, network improvement, aircraft fleet planning toinvestment analysis, covering the full spectrum of airlinebusiness models and regions. Airports – ranging from the global hubs of Heathrow,Chicago O’Hare and Abu Dhabi to regional airports whichface different, but no less challenging issues. Airport Investors and Financial Institutions – providinga complete package of due diligence services. We haveworked on every major airport transaction since 2004representing buyers, vendors and debt providers. Government and Public Sector – we have helped informthe development of national aviation policy and workedto implement specific policies in the UK, Europe andNorth America.3www.aviasolutions.com
AviaSolutions offers a range of core advisory services, all supportedby our specialist teams which have direct industry experience.
Core advisory servicesBy combining our service offerings,we can offer coherent and integratedadvice to airlines, avoiding the need toretain multiple advisory support whenimplementing major projects.Airline StrategyNetwork StrategyAdvising airline leadership teams with detailed decisionplanning aids in key areas such as corporate strategy, businessmodel selection and feasibility studies.Projects from new airline business planning, network change,aircraft fleet planning to investment analysis, and covering thefull spectrum of airline business models and regionsBusiness PlanningAircraft Evaluation & Fleet PlanningExperienced in the specialist field of airline business planning,having created expert and detailed plans for many differentbusiness models, outlining the strategy to execute.A thorough understanding of aircraft performance, aircrafteconomics and the lease/finance sector that is essential tothe fleet planning decision, utilising in-house customized fleetevaluations models.Airline set-up planningAssisting your new airline project with proven set-up planning,methodology and tools that assist aircraft selection, airline AOCaward and service launch.Alliance and Competition EvaluationUnderstanding the ever-changing landscape of codeshares,revenue sharing, alliances and partnerships.Traffic ForecastingCargo AdvisoryFundamental to creating business value and informing keystrategic decisions, one of the world’s leading traffic forecastingteams supported by an array of traffic data and tools.Advising airlines, airports and other stakeholders on strategiesto enhance revenues and profitability from cargo operationseither through using dedicated freighters or the belly hold ofpassenger aircraft.Airline Finance & BudgetingCore competence in building airline economic models,budgeting, aircraft financing and the key revenue and costdrivers, delivered with proven methodologies.Policy, Planning & ConsultationSupporting the development and application of national andregional aviation policy objectives through positive engagementwith key stakeholders.5www.aviasolutions.com
Advising airline leadership teams with detailed decision planningaids in key areas such as: corporate strategy, business modelselection and feasibility studies.
Airline strategyAirlines are one of the most complexbusinesses in the world to manage, combininga highly capital-intensive model with aperishable service, cyclical demand (byday, week, season) with complex operatingregulations, fossil fuel dependency andconstrained airport capacity.The industry is also one of the most excitingand challenging; merging advancedtechnology with long-distance travel,a global marketplace and emergingmarkets with local characteristics.AviaSolutions supports all areas of an airline’s businesswith management consulting and business transformationservices for national carriers, commercial airlines, regionalairlines, cargo airlines and aviation investors worldwide.We also support strategic decision making and investmentassessments for a broad scope of aviation businesses.We can advise airline leadership teams with detaileddecision strategy and planning aids in areas including: Corporate strategic planning Business model selection Business and industry analysis Feasibility studies Traffic forecasting Project management Market expansion studies Market segmentation analysis Alliance selection studies Development of privatization strategy Public policy/economic research Management/Process Improvement Decision analysis Investment and break-even analysis Scenario analysis Distribution strategyGE CapitalAviation ServicesGECAS: Our Parent CompanyAviaSolutions is a company of GE Capital Aviation Services(GECAS), a leading global player in commercial aircraft leasingand financing, with over 1,700 owned and managed aircraftand approximately 235 customers in over 75 countries.GECAS has one of the world’s largest fleets of commercialaircraft including widebody and narrowbody commercial jetsfrom Boeing and Airbus and 50-90-seat model regional aircraftfrom Bombardier and Embraer. It provides commercial operatorsaround the world with passenger and cargo fleet solutions, aswell as specialty aircraft for government/VIP use.GECAS is a full life-cycle aviation player, providing leasing andfinancing options for commercial operators, engines and parts.GECAS maintains a strong global presence with 24 client officesin 16 different countries around the world.GECAS is a business of GE Capital. From everyday lightbulbs tofuel-cell technology to cleaner, more efficient jet engines, GE hascontinually shaped our world with ground-breaking innovationsfor more than 130 years.Global strength. Local expertise. Litigation support7www.aviasolutions.com
Experienced in the specialist field of airline business planning,having created expert and detailed plans for many differentbusiness models, outlining the strategy to execute, and followedthe process through implementation.
Business planningYour airline needs clear visibility of whereit wants to be in the next 3, 5 and 10 yearsand a plan of how to get there. Airlines thatoperate to a clearly defined strategy areproven to be significantly more successfulthan those that do not.Business planning is not a once-off activity, but rather it is a‘live’ process, so an airline’s planning horizon should alwaysbe current and continuously up-to-date based on real worldresults, events, trends and market forces.Our team is experienced in the specialist field of airline businessplanning, having created expert and detailed plans for manydifferent operator business models. An AviaSolutions businessplan provides leadership teams with reliable and robust adviceto adequately plan for the airline’s future and success.These plans outline to airline leadership teams the strategyto execute, the critical business decisions to be made, thetimelines, and the business plan implementation stages alongthe way. They include elements such as:Example Projects er Arann: Business Plan Review for Fleet Financing – reviewAof revenue projections, capacity and volume assumptions,yield assumptions. Air Ivoire: Development of a high level business plan basedon client’s audit for the airline. Air Berlin: Business Model Assessment – Due diligence studyto understand Air Berlin’s value to a large Middle East carrierin terms of synergies and cooperation. China Start-Ups: Full Business Plan consulting services for twomajor new carriers to be launched in Eastern China in 2014. Market positioning strategy Investment requirement Project Implementation schedule Route network and schedule Fleet plan and aircraft introduction Budget and financial planning Manpower requirements and planning Aircraft acquisition strategy (lease or buy) Aircraft financing solutions9www.aviasolutions.com
Assisting your new airline project with proven set-up planning,methodology and tools that lead to aircraft selection, airlineAOC award and service launch.
Airline set-upplanningPioneering investors and leaders arealways seeking niches for new airlinesto establish strong, profitable anddefendable market positions.In developed markets, innovative business models are allowingsavvy airlines to stand apart from their peers and occupy moreprofitable market niches. Some established airlines are evolvingtowards portfolio approaches, using different business modelswithin a group to address distinct market needs.In emerging markets, rising personal incomes are creatingopportunities for people to fly and experience the value of airtravel. Those carriers which gain first mover-advantage will bebest positioned to reap the benefits.Detailed project management timelines will indicate the keydecisions and tasks to be undertaken by the new airline’sleadership team once it comes onboard.Implementing an AviaSolutions airline set-up plan will allow anew airline management team to work toward Air Operator’sCertificate application, fleet introduction, technology roll-outand service launch date.We can assist your new airline project with proven set-upplanning, methodology and tools. We set out to fully understandthe market potential through detailed traffic, yield and costanalysis. Our market analysis is designed to understand howany new airline should be competitively positioned. Our fleetplan advice will set out a feasible aircraft acquisition andintroduction strategy. We will build a cost and revenue structurebased on our aircraft and airline economics expertise.11www.aviasolutions.com
Fundamental to creating value and informing key businessdecisions, supported by one of the world’s leading trafficforecasting teams.
TrafficforecastingWe offer one of the world’s leading airtraffic forecasting teams producing robust,insightful passenger and cargo forecasts.Our passenger and cargo traffic forecastsare used to support a variety of businessdecisions. These include long-term newroute assessments for airlines, long-termmasterplans for airports and financialtransactions (airport or airline acquisition,disposal and refinancing).We tailor our forecast output to your needs, with segmentationaligned with key value drivers. As part of our analysis, weundertake market analysis to assess potential upside ordownside risks, as well as general macroeconomic and marketpositioning factors.Example ProjectsWe have undertaken over 100 major traffic forecastsworldwide. Major forecasting projects include: Airline network studies (e.g. Etihad).Passenger, Cargo, ATM and Secondary Forecasts Country level national traffic forecasts (e.g. Mexico).Forecasts for major airports (e.g. Berlin Brandenburg).We use a variety of analytical techniques to produce robust,realistic and defensible forecasts. The approach undertaken willreflect the particular circumstances of the market in question,as well as the nature of the required forecast output. Forecasts for specific infrastructure developments(e.g. Runway 3 at London Heathrow, 2nd Runway atStansted and T2 Abu Dhabi).These include: Econometric modelling, incorporating macroeconomicfactors (e.g. GDP), microeconomic factors (e.g. fares and taxes,fuel cost, emissions trading, etc.) and traffic elasticities. Bottom-up forecasts (by route, airline, aircraft, frequency). For airport masterplans (e.g. Bahrain, Riga). Transaction vendor forecasts (e.g. London Gatwick,Almaty and Riviera Maya). Buy side or refinancing forecasts (e.g. Budapest, ChicagoMidway, Brussels, Copenhagen, Auckland, Mumbai,St. Petersburg). Traffic allocation modelling (passenger choice betweencompeting airports). Connections modelling (QSI). Scenario testing and sensitivity analysis. Peak periodand design day modelling used to inform terminal andairfield masterplanning, surface access development andenvironmental assessment. Non-aeronautical forecasts (e.g. car park occupation).13www.aviasolutions.com
Understanding the dynamics of network strategy – whether forlow cost carriers, regional airlines or hub-and-spoke carriers.
NetworkstrategyAt the heart of every airline’s planningprocess lies its network strategy. Whetheryou are a low cost carrier operating on apurely point-to-point basis, or a hub carriermanaging connectivity at one or more bases,each and every route of the network shouldbe contributing to the bottom line.Network management is a complex process that must combinea strategic focus with a tactical flexibility to achieve businessplan goals. Changes must be made to operations based onreal-time performance and market reaction. Routes cannot beanalysed in isolation but must be considered in terms of thevalue contributed to overall network profitability.AviaSolutions provides network planning analysis that ismarket-based and data-driven. Using our own in-house toolsand models (such as QSI and Traffic Forecaster) combined withaccess to real-time market data to understand point-to-pointdemand patterns as well as airline capacity changes over time,we work with you to improve the profitability of yourroute networks.Parameters to fully understand in an airline’s networkstrategy include: Market Analysis Traffic Forecasting Connectivity Analysis Competition Analysis Fare Analysis Codesharing New Route FeasibilityProject Examples easyJet: New Bases Evaluation – Schedule analysis, routeperformance reporting, process mapping/re-design. CityJet: Network Expansion Analysis – to help definethe size, shape and timing of Cityjet network expansion,capacity and competition analysis, passenger trafficforecasting model. Flybe: New Bases Evaluation – individual market studies fornew routes/bases with regional aircraft. kraine International Airlines: New Route Forecasts –Uanalysis of potential new routes and additional services toCIS and Russia. BMED: Route Evaluation and Market Analysis – new routeevaluations (2006) and investigation into route performance. airBaltic: Long Term Traffic Forecasts – independent trafficforecasts at airBaltic’s main base. City of Chicago: New Route Development – strategicadvice/network diagnostics with client airlines to evaluateroute potential, network development (use of QSI model andconnection builder to calculate fair market share), marketanalysis (O&D market size analysis, economic analysis).15www.aviasolutions.com
With a thorough understanding of aircraft performance, aircrafteconomics and the lease/purchase decision that are all essential tothe fleet planning process, we can run customized fleet evaluations.
Aircraft evaluation& fleet planningThe core revenue/profit contributor forany airline is delivered by operating itsaircraft fleet. Therefore, evaluating, selectingand managing the optimum fleet, matchingcapacity to demand and making smartpurchase/lease decisions are central toan airline’s success.The challenge is that at most airlines,major fleet evaluations take place onlyonce every few years or every decade.Therefore, the necessary new fleet analysiscompetencies and processes are oftennot held in-house, and may not be keepingup with developments within the industry.Operators must consider many factors when selecting a newor replacement fleet: Match capacity to demand Optimum number of fleet types Fleet commonality Aircraft payload range capability Aircraft take-off performance Relative fuel consumption Relative revenue driven by seat count Maintenance cost and support capability The value of passenger comfort Cargo capacity Old versus new trade-offs Aircraft pricing/lease rates Aircraft buy versus lease trade-offs Availability and affordability of financing etc.Often, an aircraft type that wins on some of the abovefactors will lose on others. An objective comparative analysisis essential to finding the most appropriate answer to yourspecific fleet question, addressing both economic andnon-economic factors, using net present value analysis todecipher which solution delivers the best return on investment.We have hands-on experience leading aircraft evaluationprojects on behalf of client airlines and managing aircraftmarketing campaigns for leading aircraft OEMs. Our advisoryteam offers a unique blend of consultants with aircraftmanufacturer and airline experience, together with a strongaircraft lessor knowledge base. We bring valuable expertiseand knowledge to your aircraft evaluation and fleetplanning challenge.AviaSolutions has a thorough understanding of aircraftperformance, aircraft economics and the lease/finance sectorthat is essential to the fleet planning decision. With a set ofunique in-house tools for aircraft performance, traffic analysis,aircraft values and maintenance costs not available at otherconsultancy firms, we can run customized evaluations usingthe latest industry knowledge.Example Projects Etihad: Size and Shape Review – Identifying optimal fleetfor Etihad over the long term and providing financialimplications of fleet choices. Asian regional airline: Network analysis, aircraft evaluationand economics comparison to determine the optimum mixof fleet for 3 separate sub-networks.17www.aviasolutions.com
Assisting new airline projects with proven set-up planning,methodology and tools.
Budgeting, cost improvement& financial managementExpert budgeting, cost management andfinancial management provide an airline withthe confidence to make the right strategic andtactical decisions, giving your managementteam an accurate dashboard of informationfocused on your planning horizons.BudgetingWe have valuable experience in the specialised area of airline andaircraft economics. We build airline budgets; provide scenarioanalysis, run sensitivity analysis for various cost parameters (suchas fuel burn, interest rates, maintenance costs etc.) and revenueparameters (ticket yields, demand, cargo etc.) as well as growthrates and other elements. This is communicated in straight forwardand transparent budget documents.Cost ImprovementEffective cost improvement is essential to any airline’s successstory. A pledge to continuously seek cost reductions is whatseparates the successful carriers from their peers. AviaSolutionscan help your airline achieve dramatic reductions in the levelsof key cost drivers – such as crew costs, fuel, maintenancecosts and aircraft lease costs. We benchmark client costs andproductivity levels to best practices at other airlines worldwide.We can provide negotiation support advisory services to ensureyou are getting the best possible outcome in your procurementactivities. Our analytical capabilities, coupled with strongindustry knowledge, can help organize airlines for the financialchallenges of today’s market and secure a competitive edge.Financial ManagementWe have extensive experience of due diligence and refinancingthrough delivering a range of bespoke business planning projectsincluding the implementation of commercial strategies, benchmarkingstudies, risk planning and the development of pricing models.Unlike many of our competitors, we don’t believe in a ‘one-sizefits all’ approach to our analysis. The analytical techniquesthat we use will always be designed to ensure that the uniquecircumstances of each airline are taken into consideration, withfocus on the most important value drivers. Our due diligenceefforts focus on the airline’s financial condition its operationsand its commercial performance. To support our work, we havedeveloped in-house databases and models covering a range offinancial and operational performance indicators.AviaSolutions also advise airlines on buy or lease decisionsconcerning new aircraft. For airlines wishing to buy aircraftusing financing, we are well placed to suggest the most suitableand cost efficient financing vehicles.Project Examples ritish Airways/Hesketh: Due Diligence for PotentialBAcquisition of BA Gatwick – high level network review of BAGatwick operation and evaluation of its current costs/revenues. AirAsia X: High Level Due Diligence for Potential Investor– assessment of credibility of proposed network, reviewof yield and cost positioning, fleet planning review,benchmarking of cost/revenue assumptions. Vendor Due Diligence supporting the sale of equity in BAA,London Gatwick and Birmingham airports. Refinancing of airports including Bristol, Brussels,Copenhagen and BAA.19www.aviasolutions.com
Understanding the ever-changing landscape of codeshares,revenue sharing, alliances and partnerships.
Competition andalliance evaluationThe airline industry has been burdened witha less than fully efficient structure for manydecades, due mostly to foreign ownershiplimitations and a proclivity to protectnational flag carrier interests.Global airline alliances emerged as a kind of an interim solutionto these constraints and have delivered certain value – someeconomies of scale and connecting passenger revenues haveaccrued - but they have been less successful in achieving realgains in costs.In this ever changing partnership landscape, understandingthe real bottom-line value of alliances and partnerships andthe threat/opportunity of competitors are vital elements to theairline strategic planning process – as they lead directly intonetwork, pricing and fleet selection decisions.These global alliances are only steps on the path toward amore consolidated global airline structure, which will accelerateas government attitudes move towards liberalisation andprotectionism of flag carriers becomes secondary to a newawareness of national interests, in terms of better transport accessand ensuing economic growth.AviaSolutions can assist your planning team with traffic,capacity and pricing analysis and can help inform decisionstowards alignment, separation or mergers. Using in-housedata, tools and processes, we have the required analyticalresources and experience to ensure your airline is makingsmart partnership decisions that add shareholder value.So, the landscape of airline competition, cooperation and alliancesis changing. Airline management teams need to make smartdecisions as to the value of codeshares, revenue sharing, alliances,partnership, minority shareholdings and mergers, and choose themix that best suits their particular circumstances: Unaligned airlines that see no value in alliance membership. ligned airlines, some of which have jumped from oneAalliance to another. irlines that have snubbed global alliances and instead builtAtheir own customised virtual ties. ligned airlines that have forged new ties with non-alignedAcarriers, in parallel to their alliance ties. Aligned airlines that have forged new ties across alliances.21www.aviasolutions.com
Advising airlines, airports and other stakeholders on strategiesto enhance revenues and profits from cargo operations.
Cargo advisoryAviaSolutions provides a broad range of cargoexpertise to airports, airlines and financialinstitutions across the globe.The first stage of market development is to undertake a completemarket analysis. We review the local and extended airportcatchment, the current cargo market and the industrial sectorsdriving cargo demand. We also assess how cargo is being carriedfrom the catchment, and how consolidation can be encouragedat the client’s airport – rather than cargo taken by road to otherairports/airlines.We have unparalleled cargo contacts at executive level andinterview key decision makers as part of our investigation ofopportunities. Once a short list of realistic prospects has beenidentified, we develop compelling pitches to airlines.Cargo Forecasts We have expertise in both passenger and cargo sectors. iven the linkages between the two, we are able to provideGclients with a joined-up set of forecasts, taking into accountdevelopments in both areas.Example Projects e have reviewed the business plans of a range of cargoWairlines, including carriers in Europe, Middle East and Africa,both income and cargo volume forecasts and marketshare analysis. viaSolutions has worked on cargo projects for some of theAworld’s leading airports including London Heathrow, Bahrain,Berlin, Riga and Moscow Sheremetyevo as well as variousMexican and CIS airports. rojects include development and implementation of strategicPplans for the expansion of cargo including associated trafficforecasts, financial projections and layout plans. viaSolutions performed a high-level due diligence ofAACT Cargo Airlines (Turkey) for an investor.Master Planning e ensure that cargo masterplans reflect the sometimesWconflicting requirements of the passenger and cargo segments.Our masterplans involve safeguarding for expansion but allowfor phased development, minimising upfront investment.23www.aviasolutions.com
Supporting the development and application of nationaland regional aviation policy objectives through positiveengagement with key stakeholders.
Policy, planning &consultation supportUnderstanding the policy context withinwhich aviation operates is critical to businesssuccess. We have a strong track record ofsupporting airports, airlines and governmentsin the development and application ofaviation policy.Understanding national policy drivers, local planning issues andthe views of external stakeholders is critically important. We havedirect experience of working with both the public sector andindustry within the policy and planning arena.Policy ur team has first-hand experience of the formulation of airOtransport policy and its implementation. This includes working fornational and regional government, and a wide range of publicsector organisations.PlanningOur team has advised airports on developing strategies withincomplex policy frameworks to manage detailed and contentiousplanning applications. This often involves working with externalstakeholders to ensure the risk of challenge is mitigated.Public ConsultationsExample Projects dvised the Mexican Government on the development of aAnational aviation policy framework. upported the UK Department for Transport throughSmanagement of a wide ranging public consultation on futureprovision of airport capacity during the development of the AirTransport White Paper. upported several major UK airports with the preparation ofSplanning applications for airport development.F our major studies for the European Commission, includinga detailed analysis of the financing of aviation security anda study of air transport infrastructure issues in the EU newMember States. ide ranging public consultations regarding airportWdevelopment and/or mitigation of impacts at Heathrow,Stansted and other airports in the UK.Aligned with policy and planning is the need to manage andimplement public consultation. We have managed a wide rangeof consultations supporting policy development and planningapplications. We have analysed and reported on the responsesreceived. We have the knowledge and systems in place to enabledetailed analysis of large and technically complex submissions, aswell as more simple questionnaires.25www.aviasolutions.com
We offer a range of services from airport business planning androute development through to master-planning, all supported byour specialist teams which have direct industry experience.
Airport SolutionssummaryWe offer a range of services to airport andairport investor clients, all supported byour specialist teams which have directindustry experience.By combining our airline and airport service offerings, we canoffer coherent and integrated advice, avoiding the need toretain multiple advisory support when implementing majoraviation projects.Transaction Support & Business PlanningA world class reputation developed through supportingclients with the acquisition, disposal or refinancing of aviationrelated assets.Traffic ForecastingFundamental to creating value and informing key businessdecisions, supported by one of the world’s leading trafficforecasting teams.Infrastructure Planning & DevelopmentWorking at each stage of the project process, from scoping ofinfrastructure through to operation.Policy, Planning & ConsultationSupporting the development and application of national andregional aviation policy objectives through positive engagementwith key stakeholders.RegulationSupporting both the regulator and regulated airports incountries worldwide.Route DevelopmentSupporting the development of new air services through acombination of detailed analysis, market research and cooperation with airports, airlines and wider stakeholders.Commercial & Retail EnhancementWorking with airports and commercial partners to enhanceincome generating opportunities from retail, property, carparking and other non-aeronautical activity.27www.aviasolutions.com
CONTACT DETAILSAviaSolutionsLinks 2Links Business CentreOld Woking RoadOld WokingSurreyGU22 8BFUKAviaSolutionsGE Tower #18PO Box 11549Dubai Internet CityDubaiUnited Arab EmiratesT: 44 (0) 1483 227 080F: 44 (0) 1483 227 081info@aviasolutions.comwww.aviasolutions.comT: 971 4 454 6980info@aviasolutions.comwww.aviasolutions.com
An AviaSolutions business plan provides leadership teams with reliable and robust advice to adequately plan for the airline's future and success. These plans outline to airline leadership teams the strategy to execute, the critical business decisions to be made, the timelines, and the business plan implementation stages along the way.
