1. 2 agenda about mauritius and air mauritius cargo business in perspective passengers and cargo...
TRANSCRIPT
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AgendaAgenda
About Mauritius and Air MauritiusAbout Mauritius and Air Mauritius
Cargo Business in PerspectiveCargo Business in Perspective
Passengers and Cargo Businesses are they Passengers and Cargo Businesses are they
Rivals, Brothers or Cousins Rivals, Brothers or Cousins
Cargo Business at Air MauritiusCargo Business at Air Mauritius
ConclusionConclusion
33
About Mauritius…
44
Dot in Indian OceanDot in Indian Ocean
Dakar
Mauritius
55Visit us @ Visit us @
www.airmauritius.comwww.airmauritius.com
66Republic of Mauritius - Island Republic of Mauritius - Island NationNation
Mission of National Carrier Air Links
– Geographical Position - A strategic Hub in Indian Ocean
– Assist in developing International Trade and links Sustain Tourism Industry
– Promote Up-market and Selective Tourism Export/Import of Goods Airline to run on a Commercially Viable Basis
– Annual average air traffic growth of 9% since 1980 Preserve Environment/Ecology of the Island
Aligned Interest : Country and Airline
77
Republic of Mauritius – Fact Sheet Main Pillars of the Economy
Agricultural mainly Sugar, Tourism Industry, Manufacturing Sector mainly
Textiles and Garments, Financial Services, Information Technology and
Services
Moving to Service Economy
New emerging pillars – ICT, Seafood Hub and Offshore development
Main Exports : Clothing & Textiles , Sugar, Flowers, etc.
Main Imports : Manufactured Goods, Capital Equipment, Foodstuffs, petroleum products,
etc.
Member of the SADC and COMESA Promote bilateral and regional trade
88
Past Successes Do Not Guarantee Future ones
99Competitive EnvironmentCompetitive Environment
Mergers & Acquisition
DeregulationLiberalisation
Privatisation
Increased Competition
RegulatoryBarriers
Globalisation
Ecological PressureIncreasing costs Worldwide
Economic Changes
eBusiness
Increased Capacity
New Entrants
More sophisticated &Knowledgeable customers
Global Alliances
1010Radical Change to adapt in new aviation landscape arising from technological
innovations and new policies
Streamlining Business Processes through BPR New cost- efficient fleet , adaptable and responsive
organisation structure, cost effectiveness, yield management E business and Technology adoption
1111
Competition and New PolicyCompetition and New Policy
Liberalisation Waves a worldwide phenomenon getting to our shores
More frequencies and bigger aircraft by existing operators:AF, BA, EK, SAA
New players with new business rules Corsair LTU Comair Air Europe Lauda Air Virgin Condor
1212
Resistance to changeResistance to change
Technical/Functional
Security / Comfort Zone
1313
About About Air MauritiusAir Mauritius
1414
Air Mauritius VisionAir Mauritius Vision
To Be a To Be a
World Class AirlineWorld Class Airline
1515Air MauritiusAir Mauritius
1,156,820 Passengers35,666 Tons Cargo
Euro 416.6 million Turnover
Staff Force of 2800
28 Destinations 4 continents
About 100 weekly frequencies
Fleet of7 Wide-bodied + 2 A319 Aircraft
2 ATR 42 + 1ATR 72 Aircraft3 Helicopters
2005/2006
International Airline operating out of Mauritius
1616
5 Airbus A340-3005 Airbus A340-300
2 Boeing B767 ER2 Boeing B767 ER
2 Airbus A319-1002 Airbus A319-100
2 ATR2 ATR
3 Bell Jet Rangers3 Bell Jet Rangers
FleetFleet
1 DC8-63 Freighter Aircraft 1 DC8-63 Freighter Aircraft (leased)(leased)
1717
New Fleet AcquisitionNew Fleet Acquisition
2 A340-300E in Nov/Dec 2006
2 A330 (One in 2007/8 and the other in 2009)
1818
Route NetworkRoute Network
1919
Cargo Business in Perspective
2020
Economic Growth as driver of Air Cargo Economic Growth as driver of Air Cargo GrowthGrowth
•Strong correlation between GDP evolution and Air Cargo Growth during the past decades
Source: Boeing World Cargo Forecast 2006-2007
2121
Opportunities & Constraints Opportunities & Constraints
for MK Cargo Operationsfor MK Cargo Operations
Opportunities Constraints
World and National GDP
Growth
Export Promotion
New
Products Freighter Operations
Market Intelligence
Renegotiated SPAs
Agents Eductours
Time Ddefinite Products ‘Just-in- time’
concepts
Government Initiatives
New Trade Relationships
& AGOA
Trade Quotas & Restrictions
Currency Fluctuations
Strikes
Renegotiated Bilaterals
Industry delocalisation
Open Skies Policy
Competition
Directional Imbalances
Aircraft Type & Configuration
2222PassengerPassenger vs. Freight Growthvs. Freight Growth
AAGR 2005-09
Passenger Freight
All International Routes 5.6% 6.3%
North Atlantic 5.3% 4.6%
Trans Pacific 5.8% 6.0%
Within Europe 5.1% 4.1%
Within Asia Pacific 6.8% 8.5%
Europe to Asia Pacific 5.9% 5.7%
Europe to Africa 5.7% 4.5%
Middle East to Europe 6.6% 5.1%
Middle East to Asia Pacific 6.7% 8.8%
N America to Latin America 4.6% 3.7%
Within Latin America 4.2% 5.0%Source :IATA Passenger and Freight Forecast 2005-2009
Higher Growth for Freight as compared to Passenger!
2323
Expected Growth for 2006Expected Growth for 2006
World Economy –
3.1%
Passenger Travel –
4.9%
FREIGHT –
6.1%(source : Boeing 2006 Market Outlook)
Higher Predicted Growth in Freight compared to PAX business!
2424
Type of ProductsType of Products Growth of air-freight due to time sensitive products
2525
World Freighter FleetWorld Freighter Fleet
•Number of freighters expected to exceed 3,500 by 2023, representing an annual growth of 4.3% p.a.
Source: Airbus Global Market Forecast 2004-2023
2626Conversions of aircraft to cater for Conversions of aircraft to cater for
increasing freight demandincreasing freight demand
According to Airbus, higher rate of conversion for regional freighter fleets to cater for the rapidly growing Asian Market.
2727
Relationship Pax and Cargo
2828Similarities & differences between PAX
and CargoPAX CARGO
•Bilateral talks
•Airline to Airline Agreements
•Fleet Planning
•Route Deployment/Profitability
•Bilateral talks
•Airline to Airline Agreements
•Fleet Planning
•Route Deployment/Profitability
•Distribution Channels:
Tour Operators – Travel Agents – PAX
•Logistics :
Check-in counter
•Product definition:
Travel Packages
•Development Strategy:
Stop over
•Distribution Channels:
Shipper – Freight Forwarder – Consignee
Emergence of Consolidators!
•Logistics:
Warehousing
•Product definition:
Destination + Connection + Rates +Timings
•Development Strategy:Transshipments
2929
PAX vs Cargo - TechnologyPAX CARGO
•Inventory
•Booking Engine
•Fares
•Decision Support System
•Yield Management
•Technology E business
•Inventory
•Booking Engine
•Fares
•Decision Support System
•Yield Management
•Customer self-service
Flight and Booking status prior to uplift
Online Sales – B2C
•Departure Control System
•Customer self-service
Track and trace facilities to know shipment status
Online Sales – B2B
•Handling and Warehousing System
•ULD Management
3030AIR MAURITIUS IN THE AIR MAURITIUS IN THE CARGO VALUE CHAINCARGO VALUE CHAIN
SHIPPER FORWARDER CARRIERGROUND
HANDLINGFORWARDERHANDLING
CUSTOMS
CONSIGNEE
OTH
ER
TR
AN
SPO
RT
MEA
NS
MULTIPLE CARRIER
HANDLING
SHIPPER FORWARDER CARRIERGROUND
HANDLING FORWARDERHANDLING
CUSTOMS
CONSIGNEE
OTH
ER
TR
AN
SP
OR
TM
EA
NS
MULTIPLE CARRIER
HANDLING
3131
Sources of Rivalry
Route definition
Days of operations and Timing of operations
Capacity deployment
Offloading priority
Type of Aircraft
Distribution/ Choice of GSA
Funds for development
Resources
Alliances and Partnerships
3232
Sources of Partnership Significantly contributes to the Socio economic development of a Country
Tourism
Manufacturing Services
Transhipment
Bilateral Talks/ Airline to airline talks/ Holistic approach
Contribution to overall Route /Network Profitability
operations
Fleet investment
Economies of scale for Handling cost
Treated on Basis of Marginal Costing for mixed flights
Increase Asset Utilisation by operating Pax aircraft for freight only on short sectors
Compensating for seasonality
Security
3333
Summary
Cargo is a significant contributor to the Overall Aviation Industry Fleet development Aircraft Manufacturers New and conversions Handling Agents Airports Airlines
Supports the Passenger business both in terms of Logistics and Economic Justification
Competes with the Passenger Business for resources and often differs in Schedules, route planning and choice of Aircraft
Has a roadmap of development which can be mainly based on Mixed aircraft but also dedicated Freighters
Has its own needs of People skills Procedures , Security needs, Yield management process and Logistics facilities
3434
Cargo Business at Cargo Business at Air MauritiusAir Mauritius
3535Air MauritiusAir Mauritius
Cargo ObjectiveCargo Objective
TO MAKE CARGO BUSINESS A SIGNIFICANT
CONTRIBUTOR TOWARDS THE PROFITABILITY
OF AIR MAURITIUS BY ENSURING OPTIMUM USE
OF CARGO CAPACITY AND PROVIDING HIGHLY
RELIABLE, INNOVATIVE & COST-EFFECTIVE
SOLUTIONS TO OUR CUSTOMERS
3636Strategic IntentsStrategic Intents To optimise the use of belly capacity throughout the network as
established by passenger operations & complement with freighter operations To have a Revenue Management process optimising capacity through a dynamic
pricing policy based on demand To closely monitor Sales performance/Route contribution and take proactive
actions To develop Mauritius Cargo Hub through regional freighter operations
To build loyalty with all stakeholders of the industry Develop Incentive mechanisms to promote both volume sales and growth Gear the organisation structure to provide personalised services to main
distribution channels Develop an effective and efficient Customer Relationship Management for
personalised services to shippers and consignees Develop Partner Programs with stakeholders
To Streamline and improve processes ie Quality
3737
Strategic IntentsStrategic Intents To develop new products attractive to the customers
Time-definite services Deferred services for price-sensitive customers Multi-modal services and Partner Programs to extend our reach To develop Product specific expertise
To develop a flexible Organisation Structure that promotes accountability, collaboration and teamwork which fosters decision-making through the empowerment and continuous development of staff
Leverage on modern Technologies to develop systems & tools that will enhance processes thereby bringing us closer to the market and be more responsive in meeting customers’ needs.
Information management
To Develop Modern Logistics Infrastructure
3838
Evolution of Cargo Business at MKEvolution of Cargo Business at MK
CARGO REPRESENTS 13% OF MK’s TURNOVERCARGO REPRESENTS 13% OF MK’s TURNOVER
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
2000-1 2001-2 2002-3 2003-4 2004-5 2005-6
Financial Year
Rev
enu
e (M
UR
m)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Wei
gh
t (T
on
s)
1,144
1,448
1,185
1,340
1,551
1,60828,824 28,596
35,706
31,290
34,836 36,717
Weight (Tons)
Revenue (MUR m)
3939
• CARGO CONTRIBUTIONCARGO CONTRIBUTION
– Cargo represents 13% of the company’s turnover & our
operations are primarily based on belly-hold passenger
aircraft though increasing importance of freighter
operations.
Cargo Business @ Air MauritiusCargo Business @ Air Mauritius
4040
Cargo Revenue BreakdownCargo Revenue Breakdown
20.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
60.00
Re
ve
nu
e (
EU
R m
)
02/03 03/04 04/05 05/06
Freight Mail and Courier Due Carrier
22%
4141Cargo Revenue inc Surcharges on Cargo Revenue inc Surcharges on Freighter and Pax flights – Eur MFreighter and Pax flights – Eur M
Note: Cargo revenue includes Freight Revenue, Mail and Courier and Surcharges
0.00
10.00
20.00
30.00
40.00
50.00
60.00
2002-3 2003-4 2004-5 2005-6
Eu
r -
M
Revenue on Freighter - Eur M Revenue on Passenger flight - Eur M
4242
Fleet Cargo CapacityFleet Cargo Capacity
Cargo Capacity
Fleet No of PAX Pallets Containers Bulk Vol. Wgt
A319 120 - - √ 1,000
B767 175 3 2 √ 9,000
A340 294 6 2 √ 12,000
A340E 313 6 2 √ 15,000
DC8 - 18 - √ 40,000
4343Air Mauritius - Cargo Worldwide Air Mauritius - Cargo Worldwide OfficesOffices
Dakar
US/CanadaUS/CanadaNo of Offices: 2
Africa/Africa/Indian Ocean Is.Indian Ocean Is.
No of offices: 7
Asia/Middle EastAsia/Middle EastNo of offices:15
AustraliaAustraliaNo of offices: 3
EuropeEuropeNo of offices: 25
Worldwide Summary:No of offices: 52
Mauritius
4444
HUB STRATEGYHUB STRATEGY
Dakar
Cape Town
EuropeEurope
Madagascar
Durban
Johannesburg
Nairobi
DubaiDubai IndiaIndia Far EastFar East
Whatever Your Direction…Whatever Your Direction…
Mauritius is the HubMauritius is the Hub
Australia3 Flights/Week
Capacity: 33Tons
Reunion Island10 Flights/Week
Capacity: 120 Tons
South Africa12 Flights/Week
Capacity: 80 Tons
Melbourne
PerthReunion
Madagascar8 Flights/Week
Capacity: 31 Tons
India9 Flights/Week
Capacity: 110Tons
Europe24 Flights/Week
Capacity: 305 Tons
MauritiusMauritius
4545Enabling Systems for Cargo Enabling Systems for Cargo Business Business
at Air Mauritiusat Air Mauritius To optimise our aircraft cargo capacity…
Implemented a Cargo Reservation System across the Air Mauritius network.
To provide better customer service… Integrated to a number of Cargo Community Systems
worldwide. To better control our revenue processes…
Developed a Cargo Revenue Accounting System. To assist decision making processes…
Implemented a Decision Support System.
4646
MK Cargo ChallengesMK Cargo Challenges
• NEW MASTER AIR TERMINAL PLANNEW MASTER AIR TERMINAL PLAN
– Creation of an AIR CARGO LOGISTICS CENTRE
– Increased Capacity for DRY WAREHOUSING SYSTEM
– Centralised COURIER CENTRE
– NEW COLD ROOM Facilities with Extra Space
– Permanent DISPLAY CENTRE of Products
4747
Summary
Cargo is a significant contributor to the Overall Aviation Industry Fleet development Aircraft Manufacturers New and conversions Handling Agents Airports Airlines
Supports the Passenger business both in terms of Logistics and Economic Justification
Competes with the Passenger Business for resources and often differs in Schedules, route planning and choice of Aircraft
Has a roadmap of development which can be mainly based on Mixed aircraft but also dedicated Freighters
Has its own needs of People skills Procedures , Security needs, Yield management process and Logistics facilities
4848
Cargo has indeed become a major player of the Aviation Industry --- Dominant Cousin---
4949