PRESENTATION 2 "The Future of Airline Business Models for Africa post-Covid" by Mr.Matthias Kern, Associate Partner -Lufthansa Consulting - AFRAA
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
PRESENTATION 2
“The Future of Airline Business Models
for Africa post-Covid”
by Mr. Matthias Kern, Associate Partner
- Lufthansa Consulting
The Future of Airline Business
Models for Africa post-COVID
“Building Blocks for the Air Transport Industry Recovery”
Lufthansa Consulting is a leading aviation
consultancy
Post-COVID
Independent
7 Competence
centers advisor and
member of
the LH Group
Aviation 100 Award
winning
is our core expertise 40
successful years
employees with
18 different
consultancy
in aviation
nationalities
3500 Headquarter in
aviation projects Frankfurt, Germany
worldwide Offices in
Dedicated regional Rio de Janeiro
7 representatives
around the world
and Moscow
3
Even large airlines were hit hard by the pandemic;
some are seeing a gradual path to recovery
Percentage of seat capacity vs corresponding month in 2019
Post-COVID
Largest African airlines by scheduled seats, 2019
Initial Shock Gradual reinstatement Hope for recovery
120%
100 Egyptair1
Ethiopian Airlines
Royal Air Maroc
80
Tunisair2
Kenya Airways3
60
Air Algerie
40
SAA4
20
0
Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22
1) Includes Air Sinai | 2) Includes Tunisair Express | 3) Includes Jambojet | 4) Includes Mango
Source: OAG
Note: SAA and Tunisair have not yet filed full schedules for Nov and Dec 2021
4
To shape your business for the future consider your
position and your purpose
Transformation approach: Strategic Options for Airlines
SIMPLIFIED OVERVIEW
Lo
w
Turnaround &
Cash burn minimization
Rightsizing
Tactical, drastic measures to Preparation for long-term
stop the bleeding and focus on turnaround based on defined
quick wins to economize Owner / governmental bail out business model
Liquidity reserve
Strategic partnering
Process re-engineering
Zero-based budgeting / design
Continuous Organization of the
Improvement future
Set-up of team and processes Rethinking of business model,
for continuous improvement skill requirements,
and cost saving during regular organizational up and ways of
ops working
High
Gradual Future Readiness of business model Radica
l
5
In the ‘New Normal’, winning African business
models will be more focused
Mission
Africa to remain
home to FSC,
hybrid, LCC, ULCC
models Strategic scope
Need to streamline
heterogeneous
Geographies Customers Partnerships Fleet fleets
Hub and spoke Value Proposition Go-to-market
model carriers to
evaluate P2P Product Servic Distribution Sales
opportunities e
Pricing Marketing
Setup
FSC to evaluate LCCs to ensure
pivots to leisure Functions (Operation, Finance, Administration, etc.) genuine LCC cost
and expansion of base
cargo
People Process IT Infrastructure
6
How to shape your business model towards
becoming a ‘master of survival’ in Africa
Be Flexible Be Lean Be Smart
Design your organization Ensure competitiveness through lean Digitize operations with decision making
to cost efficiently ramp up and down cost base and focus on customer value based on integrated, AI-supported systems
Be Sustainable Be Collaborative …and shape the market
Convince your stakeholders Go beyond code shares, Stick together to use the crisis
of your commitment to the future optimize costs through partnerships to accelerate African market liberalization
7
The impact of an airline on the economy can convince
shareholders of their return on investment
Impact of aviation on economy
Example of National Carrier (Value added 2020-2025)
bound
~400 mn USD ~200 mn USD ~150 mn USD ~4 bn USD
Gross Value Added Gross Value Added Gross Value Added Catalytic economic
direct impact from indirect impact on local induced impact via impact including
Airline Operation aviation value chain domestic expenditure inbound international
of employees tourism
8In summary…
Future ready
business model + Transformation
plan + Financing
plan + Economic impact
analysis = Winning business model &
convincing story to investors
9Contact
Matthias Kern
Associate Partner
Head of Solution Group Organization & Strategy
Lufthansa Consulting GmbH
FRA W/A
Frankfurt Airport Center 1
Hugo-Eckener-Ring
60546 Frankfurt/Main
Germany
Phone: +49 (0)151 58940586
E-Mail: Matthias.Kern@lhconsulting.com
Disclaimer
This document was created for your exclusive use only. It is only complete in conjunction with a verbal presentation by Lufthansa Consulting.
With regard to the information contained herein, we appreciate your undertaking to respect and preserve the confidentiality of this document
and not to disclose or otherwise make available this material to any third party or use it for any purpose other than for your internal use.
Registration: Local Court of Frankfurt, Commercial Register HRB 101093 | Managing Director: Hannes Müller
10Many airlines had to seek governmental support to
survive this crisis – use this as opportunity
Examples of airlines in Africa seeking governmental support
(since 03/2020) Tunis Air
Royal Air Maroc
Egypt Air
Kenya Airways
Air Mauritius
South African Airways
Mango Airlines
South African Express
11You can also read
