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Airline CEO Panel – Adjusting Business Models to Remain Viable and Competitive

Airline CEO Panel – Adjusting Business Models to Remain Viable and Competitive

René Armas Maes, Managing Director of Jet Link International Speaking at Aviation Festival Americas 2017 in Miami, Florida

Miami, Florida – At the Aviation Festival Americas 2017 event held in Miami from May 8th to 10th, international consultant Mr. René Armas Maes moderated an Airline CEO panel focusing on adjusting airline business models (Ultra, low-cost, long-haul and legacy carriers) to remain viable and competitive. In this occasion, Mr. Benyamin Ismail, CEO Air Asia X and Mr. Félix Antelo, CEO LATAM Airlines Peru joined the panel. The panel discussion focused on analyzing key elements to successfully contain costs from a legacy carrier point of view in light of low cost models expansion, best strategy to launch a low-cost subsidiary within a legacy airline brand and what are the key challenges and opportunities global carriers and different business models are facing today in order to optimize revenues, increase productivity, contain cost and overall increase profitability.
This year the three biggest US legacy carriers, introduced Basic Economy fares – Lowest unbundle fare product – to compete head-to-head against Ultra Low-Cost Carriers (ULCCs) such as Spirit Airlines and Allegiant Air. The low cost business model is known for rock-bottom base fares that include no other amenities and charge for everything else including checked bags, seat assignments, and overhead bin space among other ancillary revenue products. “As legacy carriers are leaking important revenues and market share points due to ULCCs growth, it makes sense for legacy carrier to roll them out in selected markets where they face significant ULCCs competition. As legacy airlines segment their aircraft with 2 to 3 defined cabin products including a premium one, they can effectively subsidize lower end revenue fares with higher fares and premium products not only in markets where they compete with ULCCs but also in those market where there is no competition and can take advantage of a premium yield. Therefore, legacy carriers could match or undercut ULCCs lowest fare product while still hitting a route overall profit margin”, said René Armas Maes, Managing Director at Jet Link International LLC.
Concerning Long Haul Low Cost (LHLC) operations, many of the key efficiencies of the short haul low cost business model are difficult to translate into LHLC operations. Furthermore, fluctuations in fares, fuel prices, load factors, ramping up seat capacity too fast and crew labour costs can turn profits into losses very quickly. “Therefore, it is important to start up (or purchase) a low-cost subsidiary instead of operating a standalone LHLC operation as feeder traffic is key to optimize loads, revenues, cabin yields that will lead to better total revenue generation”. The new IAG (British Airways and Iberia group) LHLC operation called LEVEL will use its short haul low-cost Vueling brand as a feeder carrier. Creating a separate new brand in order to keep costs as low as possible that will allow as well to avoid future potential labour and union conflicts, is very important and will lead to stronger cost discipline” continued René Armas Maes.

For more information, please contact René at +1 (51) 984-797-050 and/or through his LinkedIn page.
About Aviation Festival Americas
For over a decade, Terapinn – Event organizer – has been the leader in bringing together CEOs and CXOs from global low cost, legacy and long haul low cost carriers including Norwegian Air, Spirit Airlines, WestJet, American Airlines, Delta Airlines, Air Canada, LATAM Airlines and Air Asia X to name a few. At the event, more than 85 live presentations and workshops will be delivered focusing on a number of strategic topics such as Aviation Strategy, Aviation Interiors, Air Xperience, Aviation Marketing, and Aviation IT. The event is held on May 9th – 10th at the Hilton Miami Downtown, Miami, FL.

About René Armas Maes
He began his international career as a Senior Analyst at Simat, Helliesen & Eichner based in New York City where he consulted global airline, regional aviation and corporate aviation customers. René is a commercial and international consultant with 15 years of experience in revenue and EBITDA growth, new product development, cost containment, strategic planning and business restructuring. He has participated in a number of global Low Cost Carrier feasibility and review studies in Europe, Asia-Pacific and Latin America. Through his professional career, he brings a key focus on transforming businesses, expanding profitability, optimizing day-to-day operations and returns. René is an IATA instructor and is a regular contributor to a number of Canadian, US and Latin Aviation Magazines concerning ancillary revenues, business restructuring and strategic planning.

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