the most reasonable choice
DESCRIPTION
The most reasonable choice. Lux Express. Lux Express Group: general information. Lux Express Group consists of: Parent company: AS Lux Express Estonia – 12 tourist coaches Subsidiary: SIA Lux Express Latvia – 11 tourist coaches Subsidiary: UAB Lux Express Lithuania – 8 tourist coaches - PowerPoint PPT PresentationTRANSCRIPT
The most reasonable choice
Lux Express
• Lux Express Group consists of:• Parent company: AS Lux Express Estonia – 12 tourist coaches• Subsidiary: SIA Lux Express Latvia – 11 tourist coaches• Subsidiary: UAB Lux Express Lithuania – 8 tourist coaches• Subsidiary: ZAO Evrolains - St. Petersburg (Russia) – 11 tourist
coaches
At the end of 2010 the Group employed close to 200 people
Lux Express Group: general information
Economic results of Lux Express• Number of passengers in 2010: 450 000
• Number of passengers in 2009: 400 000• Consolidated sales in 2010: EUR 8,58 million
• Annual change from 2009: 11,2%• Consolidated profit in 2010: EUR 0,35 million
• Result in 2009: 0,24 MEUR• Lux Express Group operates only international coach service
that are not subsidised by the public sector.
History of the company• Lux Express Group was founded in 1993 (Until 2010 the parent
company in Estonia was named MootorReisi AS and the daughter companies were in Latvia SIA Baltijas Autobusu Linijas, in Lithuania UAB Tibus and Eurolines Baltic International and in Russia ZAO Evrolains)
• The main business was carriage of passengers from Baltic's to western Europe countries – such as Germany, France, UK, Italy, etc.
• Eurolines brand name was used under a franchise agreement. In 2007 the group carried 341 000 passengers
Eurolines conception was to offer Europe´s largest regular coach network
Need for change• In 2004-2005 low-cost airlines entered Baltic market. This lead
also to local airlines reducing the prices. It became available to travel to western Europe with plane with similar price to coach and with 10 times less time (2,5 hours vs 24 hours)
• The average income of households raise in Baltic’s, people started to prefer airlines for travelling to Europe
• Fuel prices started to grow aggressively
• The coach operations to western Europe were not profitable anymore and it lead to need for new strategy.
Travel habits and trends in Baltic's in 2007• Most of the border crossing trips are done to neighbouring
countries (around 80%).
• Most of the trips done to neighbouring countries are one day trips (around 80%).
• For travelling to neighbouring countries people use mostly land transport. In the countries where exists strong railway infrastructure it is done by train. Within Baltic's where is almost no international train connection, the trips are mainly done by private cars (around 95%).
New strategy of Lux Express Group• Concentration on short lines within the Baltics and to
neighbouring countries (Estonia, Latvia, Lithuania, Russia, Poland, mainly 300-500 km routes)
• Creation of two distinguishable product conceptions:• one for business travellers who travel mostly because of work needs;• one for price sensitive travellers (students, pensioners, backpackers)
• Renewal of coach park and more effective operation of buses
• More effective sales and concentration on internet
• More flexible pricing
Creation of Lux Express• To create stability within year and make a low season
profitable, we had to create product for business clients. (Business clients travel mostly during low season and tourists in summer on high season). We created Lux Express in 2007 and started first operations between Tallinn – St. Petersburg and Tallinn – Riga.
-
Lux Express• Whether it´s the comfortable seats free WiFi or hot drinks –
we all have our favourite reasons to ride Lux Express buses. We believe that it is the best alternative for the personal car.
Lux Express• Reclinable seats and more legroom - offer comfort and let you relax and catch some sleep• Free hot drinks - you will find the one which refreshes and wakes you up• Free newspapers – to stay updated with the latest happenings• Free and easy WiFi internet access in the coach keeps you connected• Power supply by every seat pair (220 V) – you can work throughout the whole journey – no
more laptops turning into paperweights halfway to where you are going• Audio-video program „Lux Express TV“ fresh news, weather forecast, music videos to
entertain you• Climate control for your comfort• Opportunity to buy a blanket and pillow set - for your added comfort, you may want to think
about a pillow or a blanket that will make your ride cosy and comfortable.• Each seat is equipped with seat belt to ensure the safest ride for all passengers.
Creation of Simple Express• To generate new passengers and attract youth and price
sensitive people we created Simple Express in 2010. We make impossible possible! Wherever your adventure takes you – Simple Express can help you get there and explore everything the open road has to along the way. We provide quick ride and best prices.
Simple Express• Reclining seats offer comfort• Power outlets (220 V) in the middle of the bus - no more blinking-battery alerts
halfway to where you are going• Climate conditioner for your comfort• Smoking is not permitted on the coach. During the trip there are stops, which
provide enough time for a short brake outside the coach.• Each seat is equipped with seat belt to ensure the safest ride for all passengers.• Bottled water on the trips lasting longer than 5 hours
Product concept of Lux Express Group
Lux Express Simple Express
Coaches Tourist coaches up to 5 years old with extra convenience
Tourist coaches up to 8 years old
Lines Routes where significant business traffic exists (Capitals, economic centres)
Volume routes or routes with mainly leisure traffic
Route distance Up to 500 km Up to 700-800 km
Timetable Min. 2 daily departures Min. Daily departure
Price level Higher Price leader
Target group Quality-conscious business travellers
Various, depending on the line
New route network
• Lux Express • Simple Express
Implementation of the product concept
Lux Express• Riga –Tallinn (7x daily)• Tallinn – St. Petersburg
(5x daily)• Riga – Vilnius (3x daily)• Riga – St. Petersburg
(2x daily)• Riga – Kaliningrad
(Standard, daily)
Simple Express• Vilnius – Warsaw (2x daily)• Tallinn – Riga (3x daily)• Riga – St. Petersburg
(daily)• Tallinn – St. Petersburg
(5x Daily)• Riga – Kaunas (daily)• Tallinn – Vilnius (2x daily)
Line network of Lux Express Group
• Lines with biggest growth of passenger number in 2010:• Riga – Kaliningrad: 38,0%• Riga – St. Petersburg: 36,3%• Tallinn – Riga: 27,8%• Tallinn – St. Petersburg: 21,8%• Riga – Vilnius: 7,4%
Cost effective operations• Shorts routes and frequent connections allow to increase the
mileage of coaches.
• New coaches can run daily and go to service only for service, they don’t need constant repairment. This allowed also to start to outsource all the service and to close own repairment bases.
• The use of new coaches, effective operations and outsourcing cleaning have increased the mileage from 10 000 km/per month up to 30 000 km/per month. The average km per coach has risen to 15 750 km/ per month (including spare buses)
More effective sales and concentration on internet
• New sales system and homepage was launched in 2008. • After launch of new sales system internet sales share grew from
5% to 15%. • In May 2011 the internet sales share was already 35% from total
sales.
More flexible pricing
• Aggressive online sales campaigns have been used to generate the sales volume in low season and to introduce Lux Express and Simple Express service to passengers.
• During the campaign weeks the amount of sold tickets has been increased by up to 3 times.
Partnership with airBaltic• Lux Express Group has launched strategic partnership with
Latvian airlines airBaltic.• Under joint bus brand airBalticBus Lux Express tickets are
sold from airBalticBus website which carries passengers from Tallinn, Vilnius, Parnu, Tartu to Riga airport.
• Joint loyalty program BalticMiles
Investments
• From 2007 Lux Express Group has bought 29 brand new coaches for developing Lux and Simple Express product conception
• Total investment into new coaches more than 7,5 MEUR• 6 coaches have been totally renewed from inside to outside to
be used as Simple Express• More than 0,2 MEUR has been invested into development of
online sales system and homepage
Results – Tallinn – Riga • In 2007 the share of coach transport on Tallinn – Riga line was
around 4%. In 2010 the share was over 10% and we expect to reach at least 13% share in 2011. The total nr of coach passengers will be around 120 000
2007 2008 2009 2010 20110
20000
40000
60000
80000
100000
120000
140000
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Results – Lux Express Group
Description 2005 2006 2007 2008 2009 2010
Nr of employees 342 333 261 188 178 195
Revenue (milj. eur) 9,01 9,75 8,68 7,93 7,71 8,58
Profit (milj. eur) 0,15 0,5 -0,19 -0,34 0,24 0,35
Nr of passengers (thousand) 351 352 341 350 400 450
Results - overall
• Change from long distance carrier to short distance (from 2000-2500 km to 300-500 km)
• Closing of all long distance lines in 2009 and concentrating in the Baltic’s region
• Growth of passengers from 341 thousand in 2007 to 450 thousand in 2010. We expect to have around 600 thousand passengers in 2011
• Growth of public transport share on the routes inside Baltic's thanks to Lux and Simple Express
