eu- arab world aviation conference muscat, oman, 20-21...
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EUEU-- ARAB WORLD AVIATION ARAB WORLD AVIATION CONFERENCE CONFERENCE
Muscat, Oman, 20Muscat, Oman, 20--21 October 200921 October 2009
Agenda for FreedomAgenda for Freedom
0
1
2
3
4
5
6
7
8
9
10
1993 1995 1997 1999 2001 2003 2005 2007 2009
% in
vest
ed c
apita
l
Airlines average cost of capital
Airlines return on capitalLoss of investor capital
Revenues set to fall 15% or $80 billion
Source: IATA
-20
-15
-10
-5
0
5
10
15
20
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
F
% G
row
thYo
Y
Global Airline Revenue
Passenger RPKs
Industry losses to continue into 2010
Source: ICAO, IATA
Global commercial airline profitability
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.019
95
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
F
2010
F
% in
vest
ed c
apita
l
-20
-15
-10
-5
0
5
10
15
20
US
$ bi
llion
Net losses(right scale)
Return on invested capital (left scale)
The problem is not with business modelsAirline returns on invested capital (ROIC)
0
1
2
3
4
5
6
7
8
NetworkAirlines
LCCs NetworkAirlines
LCCs NetworkAirlines
LCCs
Total US Europe
% in
vest
ed c
apita
l
Average cost of capital/ target ROIC
The problem is not geography
Airline returns on invested capital (ROIC)
0
1
2
3
4
5
6
7
8
Total US Europe Asia
% in
vest
ed c
apita
l
1996-2000 2001-2004 Cost of Capital
Average cost of capital/ target ROIC
The problem is not
The Chicago Convention
But 3.500 bilateral agreements contain barriers to freedom
3.500 bilateral agreements contain barriers to freedom:
1. Freedom to access capital markets
…is not really French
Orange runs telecoms in…
Resolutely British ?
3.500 bilateral agreements contain barriers to freedom:
2. Freedom to do business
3.500 bilateral agreements contain barriers to freedom:
3. Freedom to price services
Mechanisms for change
Unilateral Waiver
Multilateral agreement/ treaty
Third way: multilateral statement of policy principles: the approach chosen for the Agenda for Freedom
Agenda for freedom: the steps
First Summit: Istanbul - October 2008
Next Summit Critical mass of signatures (Canada –mid November)
