Master of Ceremony
Mr. Omar RamosOn Air PersonalityUnivision
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Master of Ceremony
Mr. Omar RamosOn Air PersonalityUnivision
IATA Welcome
Mr. Peter CerdáRegional Vice President,The AmericasIATA
Welcome to Chicago
Thank you to our Sponsors
The Value of Air Transport in the United States
O’Hare and Midway’s Success Story
2011
44.6 Million Pax
61 carriers
2019
63.6 Million Pax
73 carriers
O’Hare and Midway’s Success Story
2008
87 Million Pax
61 carriers
2018
105 Million Pax
73 carriers
Economics
More cities connected at lower real cost
Source: IATA Economics using data from ICAO, IATA Statistics, SRS Analyzer and our own forecasts12
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
2.5
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
1995 1999 2003 2007 2011 2015 2019
US
$/R
TK
in 2
01
4U
S$
Nu
mb
er
of
un
iqu
e c
ity
-pa
irs
Unique city-pairs and real transport costs
Unique city-pairs
Real transport costs
Conference Preview
• Infrastructure• Disruptive Technologies• Distribution Trends• Sustainability• Diversity• Regulatory Challenges• Long Term Profitability
Enjoy the Conference
Welcome to Chicago
Keynote
Mrs. Jamie L. RheeCommissioner, Chicago Department of Aviation (CDA)- Speaker
The Business of Freedom
Keynote
Mr. Alexandre De JuniacDirector General & CEOIATA - Speaker
Infrastructure ModernizationHow to Accomodate Future Growth?
Panel Discussion
Mrs. Jamie L. RheeCommissioner, Chicago Department of Aviation (CDA) - Panelist
Mr. Andy CebulaVice President, NextGen and New Entrants Airlines For America - Panelist
Mrs. Sadaf JalalLead, Construction and Design SITA - Panelist
Mr. Gavin MolloyVice President Corporate Real EstateUnited Airlines - Panelist
Mr. James BarryPresident & CEO – PASSUR Aerospace, Inc. - Moderator
NetworkingCoffee Break
Room Toledo5th Floor
Changing a Flight at the Pressof a Button – Is it Possible?
Fireside Chat
Mrs. Elena ÁvilaExecutive Vice President, Airlines, Amadeus- Speaker
Dr. Joe LeaderCEOAPEX- Moderator
Focus on the Passenger Experience
Fireside Chat
Dr. Joe LeaderCEOAPEX- Moderator
Mr. Edouard PiquetSenior Vice President, Customer Experience, Aeromexico- Speaker
Disruption in the Aviation Industry
Fireside Chat
Dr. Joe LeaderCEOAPEX- Moderator
Mr. Alex WilcoxCEO JetSuite and JSX- Speaker
Confidential: For use with permission of JSXSLIDE: 23
SLIDE:
Confidential: For use with permission of JSX
The vision of JSX is to provide
JOYFUL, SIMPLE AND RELIABLE AIR
TRAVEL.
24
SLIDE:
Confidential: For use with permission of JSX
25WHERE WE FLY
CONFIDENTIAL: FOR USE WITH PERMISSION OF JETSUITEX
SLIDE:
Confidential: For use with permission of JSX
27
Your hop-on jet service.
SLIDE:
Confidential: For use with permission of JSX
29
To Fly: JSX.com
Disruption in the Aviation Industry
Fireside Chat
Dr. Joe LeaderCEOAPEX- Moderator
Mr. Alex WilcoxCEO JetSuite and JSX- Speaker
Wings of Change Gala Dinner
Hosted by
Grand Ballroom7th Floor
A Conversation withOscar Muñoz
CEO Insights
CEOUnited Airlines- Speaker
Mr. Oscar Muñoz
Mr. Seth KaplanNPR, Aviation journalist, airlineexpert and transportation analyst- Moderator
Mrs. Molly Wilkinson
Vice President, Regulatory AffairsAmerica Airlines - Panelist
Mr. Steve Morrissey
Vice President, Regulatory and Policy United Airlines - Panelist
Ms. Sharon Pinkerton
Senior Vice President, PolicyAirlines for America - Panelist
Mr. Howard Liebman
Senior Director, Government and Community Affairs, Transat A.T. Inc. - Panelist
Mr. Douglas Lavin
Vice President Member & External RelationsNorth America, IATA - Moderator
Aviation in Today’s Political World Regulatory Challenges and Opportunities
Panel Discussion
NetworkingCoffee Break
Room Toledo5th Floor
Ms. Mary Ellen Jones
Vice President, Asia Pacific SalesPratt & Whitney - Panelist
Mr. Jim Lynde
SVP, Human ResourcesHawaiian Airlines - Panelist
Arielle Meloul
Senior Vice President, People, Culture and Communications, Air Canada - Panelist
Mr. Hugo Chaviano
Former DirectorIllinois Department of Labor - Panelist
Mr. Michael Bell
Senior Client Partner, Aviation & AerospaceKorn Ferry - Moderator
Diversity & Inclusion in the Aviation Industry
Panel Discussion
Mrs. Emylene Aspilla
Director of Social Responsibility and CommunitySustainability, San Francisco International Airport - Panelist
Mr. Angela Foster-Rice
PrincipalAERIAL Consulting - Panelist
Mr. Dan Cohen-Nir
Senior Director, Safety, Airport Programs and EnvironmentalAffairs, Airbus Americas Inc.- Panelist
Ms. Lauren Riley
Managing Director, Global Environmental Affairs and Sustainability, United Airlines - Panelist
Tim Colehan
Assistant Director Member and External AffairsIATA - Moderator
Beyond Environment – Why Sustainability
is Critical to the Future of the Aviation Industry
Panel Discussion
NetworkingLuncheon
Arthur Court 3rd Floor for Main Course
Toledo Room for dessert and coffee
Mr. Brian PearceChief EconomistIATA - Speaker
Economic Overview of the Global Airline Industry
Keynote
Global airline industry performance and outlook
Brian PearceChief Economist
4th September 2019
Despite challenges are industry margins stabilizing?
Source: IATA Economics using data from The Airline Analyst
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016 2017 2018 2019
% o
f o
pe
rati
ng
re
ve
nu
es
Airline industry operating margin
Seasonally adjusted
Actual
They are in North America, less so elsewhere
Source: IATA Economics using data from The Airline Analyst
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
N America ASPAC ex India LatAm Europe
% o
pe
rati
ng
re
ve
nu
es
Operating margins, year-on-year change, % points
2008Q4 2019Q1 2019Q2
2018 problem had been with costs and their recovery
Source: IATA Economics using data from The Airline Analyst
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2011 2012 2013 2014 2015 2016 2017 2018
Unit cost and unit revenue growth
Unit cost growth
Unit revenue growth
Fuel costs now falling but is that good or bad?
20
30
40
50
60
70
80
90
100
110
120
2012 2013 2014 2015 2016 2017 2018 2019
Ind
ex
ed
to
eq
ua
l 10
0 in
20
12
Jet fuel price and base fare yields for economy and premium seats
Jet fuel price
Economy fare yield
Premium fare yield
Source: IATA Economics using data from IATA DDS and Platts
Airlines appear to be matching supply to demand
Source: IATA Economics using data from IATA Statistics
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2012 2013 2014 2015 2016 2017 2018 2019
% c
ha
ng
e y
ea
r-o
n-y
ea
r
Growth in global RPKs and ASKs
RPKs growth
ASKs growth
Ancillaries increasingly helping to recover costs
Source: IATA Economics Economic Performance of the Airline Industry, Mid-Year 2019,
0
50
100
150
200
250
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
US$
per
dep
art
ing
pa
ssen
gerAirline revenue per passenger, US$
Ancillaries: 11.9%
Cargo: 12.9%
Surcharges: 7.2%
Base fare: 68%
Limiting narrowing of the gap above breakeven
Source: IATA Economics Economic Performance of the Airline Industry, Mid-Year 2019
57
59
61
63
65
67
69
71
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
% A
TK
s
Breakeven and achieved cargo + passenger weight load factors
Load factor achieved
Breakeven load factor
But much less success in the cargo business
Source: IATA Economics using data from IATA Statistics
43%
44%
45%
46%
47%
48%
49%
50%
51%
52%
76%
77%
78%
79%
80%
81%
82%
83%
84%
2012 2013 2014 2015 2016 2017 2018 2019
% o
f A
FT
Ks
% o
f A
SK
s
Global passenger and cargo load factors
Passenger load factor
Cargo load factor
Cargo under much greater pressure than travel
Source: IATA Economics using data from IATA Statistics
18
19
20
21
22
23
500
550
600
650
700
750
2015 2016 2017 2018 2019
FT
Ks
mo
nth
ly, b
illio
ns
RP
Ks
mo
nth
ly, b
illio
nGlobal RPKs and FTKs, billions per month
RPKs
FTKs
Trade war damage
Source: IATA Economics using data from Netherlands CPB and Oxford Economics
-1
0
1
2
3
4
5
6
2015 2016 2017 2018 2019
% c
ha
ng
e y
ea
r-o
n-y
ea
r
World GDP and international trade growth
World GDP growth
International trade growth
US-China tariffs imposed
Downside risk
Source: IATA Economics using June forecast and global trade war scenario from Citi and Oxford Economics
There clearly is a serious risk of recession
Source: IATA Economics using data from IATA Statistics, Markit and Thompson Reuters Datastream
35
40
45
50
55
60
65
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
1990 1995 2000 2005 2010 2015 2020
Ind
ex
, 50
=n
o c
ha
ng
e
% p
oin
ts
Recessions in global RPKs, business confidence & the yield curve
RPK recessions (10-2 year) US Treasury yield curve
Business confidence (globalPMI composite)
Recession would be a shock to the consensus
Source: IATA Economics using data from the IMF World Economic Outlook
-3
-2
-1
0
1
2
3
4
5
2006 2008 2010 2012 2014 2016 2018 2020
IMF forecasts of global economic growth (market exchange rates not PPP)
April 2013
April 2014
April & July 2019
April 2018
Dates show the revision of global GDP forecasts by the IMF
Has the link between profits & the cycle been broken?
Source: IATA Economics using data from ICAO. IATA and the IMF World Economic Outlook
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Airline industry operating profit margin and global GDP growth
Airlines' EBIT margin
Global GDP growth
Can other regions replicate N American success?
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
% c
ha
ng
e y
ea
r-o
n-y
ea
r
Net post-tax profit margins
N America
Europe
Asia Pacific
L America
Africa
Middle East
Source: IATA Economics Economic Performance of the Airline Industry, Mid-Year 2019
Mr. Ted ChloePartner Deloitte Consulting - Speaker
How Airlines Can Preparefor an Economic Downturn?
Keynote
Planning for an uncertain
future
How airlines can ‘Thrive’ in the next economic downturn?September 2019
Copyright © 2019 Deloitte Development LLC. All rights reserved. 61
After 10 years, indicators of economic uncertainty are emerging
Current Debt Levels
Global Trade Tensions Uncertain Regulatory Environment
Flattening Yield Curve
Recoveries don’t die of old age, but become increasingly fragile over time– Ira Kalish
Deloitte Global Economist
Copyright © 2019 Deloitte Development LLC. All rights reserved. 62
Key Questions to Consider
What did we learn?1
Why prepare now?2
How to prepare?3
Copyright © 2019 Deloitte Development LLC. All rights reserved. 63
What did we learn? - Airlines primarily relied on consolidation and restructuring to ‘Survive’ the last downturn
Fully Available Not AvailablePartially Available
Reshare Business ProfileCapturing incremental
revenueCost Management
Fleet StrategyAccelerated the retirement and grounding of the most costly operating aircrafts, managed usage of owned vs leased aircraft
Fuel / Oil PricesManaged costs using a variety of levers (financial hedges, vertical integration)
ConsolidationWent from ten significant airlines in 2000 to four major airlines in 2015, resulting in the top four airlines now controlling 80% of the market
RestructuringUsed Chapter 11 to lower cost profile and restructure company balance sheets
Airlines
Capacity ChangesCut capacity at a faster rate than demand increasing load factor and revenue per flight
Product OfferingsDebundled offerings to increase ancillary fee and segmented the aircraft with “Basic” and “Premium” Economy
Cargo ManagementIncrease capacity for cargo and increase the types of cargo transported; driving 10-15% of revenue per trip
Copyright © 2019 Deloitte Development LLC. All rights reserved. 64
Why prepare now? – Airlines are now in a better position to ’Thrive’ in the next downturn
More scalable cost structures
Robust ancillary and cargo revenue Less domestic competition
Stronger balance sheets and margins
Enhanced technology to support safety, operational efficiency and CX Enhanced partnerships
Copyright © 2019 Deloitte Development LLC. All rights reserved. 65
‘Future Proofing’ Pillars
Upskill and source talent to meet tomorrow’s demands
Leverage data to make faster, more informed, future looking decisions
Focus on retaining your most valuable customers
Build an elastic model that can quickly respond to market fluctuations
Str
ate
gic
Capabilitie
sEnabling C
apabilitie
s
Rethinking the ‘Who’ and ‘How’
of Talent
RapidDecision Making
Operational Resilience
CustomerValue vs.
Loyalty
How to prepare? - Airlines can and should take proactive actions to ‘Future-proof’ their organizations
4 3
1 2
Copyright © 2019 Deloitte Development LLC. All rights reserved. 66
It’s all about short game and putting…
Source: Golf Digest Source: Golf Digest
Drive For Show
✓Putt For Dough
Mr. Hunter KeayManaging Director - Senior Analyst: Airlines, Aerospace & Defense Wolfe Research - Panelist
Mr. Jamie BakeManaging DirectorJ.P. Morgan Securities - Panelist
Mr. Brian PearceChief EconomistIATA - Moderator
Airlines as an Investment – Is Long Term Profitability Achievable ?
Panel Discussion
Mrs. Kathy MorganVice President, NDCSabre - Panelist
Mr. JJ KieleyManaging Director, DistributionUnited Airlines - Panelist
Mrs. Shari QuackenbushGlobal Travel SourcingIndependent - Panelist
Mr. Amos KhimVice President, American Express - Panelist
Ms. Shelly YoungerSr. Manager, Airline Retailing Strategyand Head of NDC, ARC - Moderator
Distribution trends and digital transformation
Panel Discussion
Mr. Omar RamosOn Air PersonalityUnivision
Key Takeaways & Closing
Closing Remarks
Join Us!Registration will Open Soon!
01 – 02 April 2020Santiago – Chile
Wings of Change ClosingCocktail
Room Toledo 5th Floor
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