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Master of Ceremony

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Master of Ceremony


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


Mr. Edouard PiquetSenior Vice President, Customer Experience, Aeromexico- Speaker

Disruption in the Aviation Industry

Fireside Chat


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:


25WHERE WE FLY

CONFIDENTIAL: FOR USE WITH PERMISSION OF JETSUITEX

SLIDE:


27

Your hop-on jet service.

SLIDE:


28

http://www.youtube.com/watch?v=fAwxRsZbJas

SLIDE:


29

To Fly: JSX.com

Disruption in the Aviation Industry

Fireside Chat


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


-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


-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


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


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

Thank you

[email protected]

www.iata.org/economics

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


Key Questions to Consider

What did we learn?1

Why prepare now?2

How to prepare?3


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


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


‘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


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


Key Takeaways & Closing

Closing Remarks

Join Us!Registration will Open Soon!

01 – 02 April 2020Santiago – Chile

Wings of Change ClosingCocktail

Room Toledo 5th Floor

master of ceremony - iata...1990 1995 2000 2005 2010 2015 2020. s e. recessions in global rpks,...

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