03 - Value Chain Flashcards
In which types of aircraft did Emirate invest?
starting around 2000 they bought a lot of new generation aircrafts and starting in 2005 they invested heavily in next gen aircrafts (A380, B777, A350)
-> a lot of orders are made for A380 / 350 and 777
How is the location of Emirates?
very good for Europa, Asia and Africa -> hub system and leverage natural resources (70% of world population is reached by air) = core advantage on the market!!
The new Dubai “World Central International Airport”
opening 2025, airport will be a part of integrated strategy of “places”
What’s Dubais goal with the airport?
become the economic centre of the world in some industries, build other businesses around their natural resources. Without an airline it doesn’t work. Become the tradeplace for all regions and profit from a lot of spillover effects from an attractive hub
Where does the competition among continents take place nowadays?
Hub Networks, Multi-Hubs and Point-To-Point long haul (low costs)
Will mega-hubs have potential in the future?
- Boeing has a focus on smaller airplanes which are more efficient
- Norwegian: low cost but long haul carrier (p2p) as you can fly longer with smaller planes (anti hub trend)
- emirates could switch to smaller airplanes and fly more often to Zurich but European airports are limited
The bigger the plane, the more…
room you have for your pricing and sell it also at marginal costs.
What’s the difference for the US market?
They have a huge domestic market, fly smaller destinations, more often with smaller airplanes. A lot of mergers = market power
What are ways to solve the imbalance of value distribution in the airlines value chain?
- Vertical Integration
- Pricing / Ancillary
- Service Innovation, Creation of Customer Value
Read Airport Zurich Case
Read!
What are success factors of airports?
Size & Pax Number through local demand, role of airport in networks, costs
- cooperations and outsourcing
- non aviation revenues
- development perspectives
Do economies of scale occur when airports merge?
No, only limited
Does it make sense to have a grounding when you could have made a turnaround?
Yes, you can introduce real change, start from scrach because a turnaround takes too much time –> grouding can be supportive
Why was the grounding of Swissare the best move during that time?
Besides Efficiency and liquidity, trust came back! Since then, SWISS only wrote profits.
Successfactors of integration
- Restructuring
- Renegotiation of supplier contracs
- adjustment of collective labor agreements to the actual competition structure
- synergies
- reduction of overhead costs
