TOURISM POLICY WORKSHOP November Confronting Challenges and Seizing Opportunities... Role of the Public and Private Sector 1

Transcription

1 TOURISM POLICY WORKSHOP November 2017 Confronting Challenges and Seizing Opportunities.... Role of the Public and Private Sector 1

2 I m g o i n g t o t a l k a b o u t Ryanair (Role of private sector) Tourism trends / opportunities Role of public sector 2

3 R y a n a i r G r o w i n g eve r y w h e r e, d r i v i n g d o w n p r i c e s 3

4 E u r o p e s Favo u r i t e A i r l i n e Lowest fare/lowest cost carrier gap widens No 1, Traffic FY18 129m (+8%) No 1, Cover 87 Bases/208 apts/430 a/c 240 a/c order = grow to 200m p.a. by FY24 Rapid recovery of rostering failure in Sep Slower growth in FY18 & FY19 H1 profits up 11%; FY guidance unchanged 4

5 E u r o p e s L o w e s t Fa r e s Avg. Fare Change % > Ryanair Ryanair 41-13% Wizz 51-11% +24% easyjet 77-15% +88% Norwegian 78-3% +90% Air Berlin 115-7% +180% IAG % +383% Air France/KLM 215-7% +424% Lufthansa 218-4% +432% Avg Competitor Fare % (Source: Latest FY results/annual Reports) 5

6 E u r o p e s L o w e s t C o s t s ( p pax ex-fuel) RYA WIZ EZJ NOR AB1 LUV Staff Airport & Hand Route Charges Own ship & maint S & M other Total (PY) 27 (28) 40 (40) 51 (55) 73 (73) 131 (116) 94 (92) % change (reptd.) -5% +1% +3%(stg) +2% +13% +2% %> Ryanair +48% +89% +170% +385% +248% (Source: Latest FY results/annual Reports) 6

7 E u r o p e s N o. 1 C ove r a g e 87 bases 208 airports (111 Prim) 33 countries 1,800 routes 129m c mers (FY18) 430 x B737 fleet 240 x B737s on order 7

8 E u r o p e s N o. 1 M a r ke t S h a r e ( 1 5 % ) Country (Cap m)* No. 1 No. 2 No. 3 Share UK (139) easyjet BA 17% Monarch Spain (132) Vueling Iberia 18% Germany (131) Luft AirBerlin 9% CEE (105) Wizz Aegean 15% Italy (96) Alitalia easyjet 27% Greece (29) Aegean easyjet 11% Portugal (28) TAP easyjet 20% Poland (21) LOT Wizz 29% Ireland (18) Aer Lingus BA 47% = Bankruptcy Belgium (17) Brussels Air Jetairfly 28% *(Source: CapStats intra EU Depart capacity Apr 17 Mar 18) 8

9 C u r r e n t D eve l o p m e n t s Lower fares & AGB drives growth (129m) Customer initiatives succeeding (97% LF) Alitalia (24m), AB1 (29m) & Mon (5m) bust Pilot rostering failure in Sep Acted to recover in Sep slow W18 growth Unchanged FY guidance 1.40bn to 1.45bn Brexit Apr 2019 disruptions more likely? 9

10 L o w e r f a r e s A G B d r i ve g r o w t h t o m p. a FY18 cut 131m 129m (+8%) FY19 cut 142m 138m (+7%) FY20 unchanged FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 10

11 C u s t o m e r I n i t i a t i ve s S u c c e e d i n g MyRyanair over 30m members, (40m by y/e) 50% (approx.) customers select preferred seats Plus Products 7% (approx.) in year 3 Flight connections at Rome & Milan going well Ryr Rooms over 250,000 hotels & 7.5m rooms worldwide Travel credits for Ryr Rooms in December 11

12 12

13 S u m m e r

14 S u m m e r % g r o w t h o n t o p 4 m a r ke t s 14 14

15 W i n t e r % g r o w t h o n t o p 4 m a r ke t s 15 15

16 B a s e s S t a n d a r d i s e d, E f f i c i e n t, E f f e c t i ve 16

17 To u r i s m Tr e n d s, o p p o r t u n i t i e s, c h a l l e n g e s 17

18 W o r l d To u r i s m H e a l t h 18

19 E u r o p e a n To u r i s m C h a n g i n g 19

20 S a t u r a t i o n European tourism can be overweight in popular hubs & major cities Why? - Good product offering - Airline connectivity - Marketed well - Human nature to repeat visit Requirement to promote diversity - Regional - Seasonal - Customer 20

21 P o p u l a t i o n v To u r i s t s City Population Tourists Ratio Popula The Need to Diversify tion v tourists Barcelona 1.6m 8m 1 : 5 Paris 2.2m 16m 1 : 7.2 London 8.7m 32m 1 : 3.7 Berlin 3.5m 12m 1 : 3.4 Amsterdam 800k 5m 1 : 6.2 Dublin 1.3m 8m 1 :

22 P r o m o t i n g d i ve r s i t y Wild Atlantic Way perfect example of regional/product diversification Attract new segments, e.g. students and silver surfers, in shoulder periods Build repeat visits weakness for Ireland, excluding VFR Example: Ryanair in Malta 77% inbound vs. 23% outbound customers 95% leisure vs. 5% business traffic Top markets: UK, IT, PL 22

23 S i m p l e m o d e l o f d i ve r s i f i c a t i o n Airports & Government attract airlines through low charges & taxes Airlines deliver customers through low fares and connectivity National, regional, local tourism bodies develop alternative product Keep costs of tourism, including accommodation, low Promote destination, joint marketing very effective 23 23

24 S u m m a r y o f I r i s h C h a l l e n g e s / O p p o r t u n i t i e s Over-dependence on UK market -40% of 2016 visits, High proportion of VFR, Down 7-8% in 2017 Germany, Scandinavia, Italy, Spain present opportunity -Superb connectivity with Ryanair, Target Hamburg, Berlin Dublin as transatlantic hub -Dublin more intra-eu destinations than Heathrow Relentless cost focus (airports, taxes, accommodation and visitor costs) -Sterling weakness a double competitive threat 24

25 Dublin S18 5 new routes: RAK, MUC, NAP, PFO, STR 90 routes 27 based a/c 12.9m c mers p.a. 9,675 on-site jobs 1.2bn savs p.a. 25

26 I r e l a n d S bases 7 airports 130+ routes 14.9m c mers p.a. 11,175 jobs (ACI) 1.4bn savs p.a

27 R o l e o f P u b l i c S e c t o r 27

28 A P D Re s t r i c t s G r o w t h ( P a x M ) - I r i s h E x a m p l e Travel Tax Intro. JAN

29 B r ex i t : P o t e n t i a l f o r m a r ke t d i s r u p t i o n? 29 29

30 Brexit Hard Brexit automatically triggered by Art 50 if no deal No fallback for aviation market access in WTO New UK-EU27 Air Services Agreement required Transitional agreement would provide immediate solution Timing becoming critical 30

31 Ireland Inc. to champion aviation competitiveness Global hub for aviation business and innovation Lead reforms at European level Tackling French ATC strikes Creating Upper European Air Space Aviation cost is a tourism issue (airports, taxation, intrusive regulation) 31

32 Monopoly domination of European air space European Airspace Today Constrained ATCO productivity Too many Control Centres Lack of Service Continuity Not Integrated Not Standardised Not Efficient EU Airspace Architecture ICB Sept 2017 A4E Initial thoughts Fragmented Airspace restricted by national borders Restrictive Air Traffic Controller Licencing and Training Based on fixed lines of flying Not taking advantage of modern air ground technology 32

33 O p p o r t u n i t i e s f o r c o - o p e r a t i o n 33

34 Jo i n t a d v e r t i s i n g : T h e W i l d A t l a n t i c W a y Tourism Ireland - WILD ATLANTIC WAY Aug-Sep 16 - DE market 34 34

35 G e r m a n y s M o s t V i s i t e d A i r l i n e W e b s i t e (Source: Similarweb.com, airlines in January 2017) 35

36 Wo r l d s M o s t V i s i t e d A i r l i n e Website 2.5m visits a day in 2017 In August, we had more visitors worldwide than BA, Lufthansa, Air France and KLM put together. 36

37 I r e l a n d G e r m a n y : 1 2 R y a n a i r Ro u t e s 37

38 E u r o p e a n C a p i t a l o f To u r i s m Ryanair supports this EU initiative Opportunities for regions & cities Start planning now 38

39 THANK YOU 39

40 S e p P i l o t r o s t e r i n g f a i l u r e W h a t h a p p e n e d? S17 peak schedule (400 a/c) fully crewed in Jul & Aug 9 month FTL transition period 1 Apr to 31 Dec 2017 Over 50% crews have full month off in Sep/Oct/Nov/Dec Canx 2,100 flts (2%) Sep/Oct 300,000 c mers disrupted Ground 25 a/c (6%) Nov to Mar 400,000 c mers affected 98% of c mers reaccom/refunded in 18 days + 40 voucher Fixed rosters, change Ops mgt, better planning Pay increase & improved T&C s for pilots Attract Mon, Nor & Jet2 B737 pilots 40