Rwandair Strategy & Challenges 2011-2020 Presented 14 December 2011 Strategic Focus ‐ the Business Model
Total Page：16
File Type：pdf, Size：1020Kb
RwandAir Strategy & Challenges 2011-2020 Presented 14 December 2011 Strategic Focus ‐ The Business Model A crossbreed of a legacy and a low cost carrier Niche player – From the heart to select potential cities of Africa Differentiated product – Safety and Efficiency Out of Africa – To enhance connectivity and alliances GOR Vision 2020 Alignment with GOR Vision 2020 through: RbRobus tailiirline isaprerequiitisite for thesuccessof Kigali and Bugesera Airports ( The Asian Tigers case) Conference tourism – Kigali Convention Centre A Service Industry Economy calls for first class connectivity Rwanda geographically a natural aviation hub Economic ripple multiplier effects Spin‐off of associated busineses i.e. Cargo terminals, maintenance shops, flying shcools, etc Capacity building Cracking the current oligopoly TkiTaking adtdvantage of the “Open Skies ” in theregion Generation of Government Taxes and Revenue Demystifying aviation Year 1 (2011/12) Short and medium range fleet by Year 1. (start 2011/12); Deploy the two new B737‐800 in August and October respectively Increase route frequencies hence increased aircraft utilization. Major marketing promotional campaign –5% of total pax revenue (Emirates Airlines ‐3% of pax revenue) LhLaunch the fllfollow ing routes; Kigali–Lagos–November2011 Kigali–Dar–Mumbai ‐ March 2012 Kigali – Mombasa‐ Juba ‐ April 2012 Kigali – Harare – Lilongwe Over 296,000 passengers Average payloads – 50% Raise the average fare per sector from USD134 to USD155 Increase yields IOSA Certification Year 2 (2012/13) The year of exceptional growth and stabilization – 2012/13; Deploy two new Dry leased ATR72‐600 ‐ 68 pax – May 2013 No new routes Increase route frequencies Over 446,000 passengers Average payloads – 53% Average fare per sector flattens at USD167 since there are no additional routes Increase yields Joint Venture Hangar construction The year to crystallize alliances and code share agreements Year 3 (2013/14) The year of aircraft fleet change – 2013/14; Retain the B737‐500 after the contract expiry Launch the new hangar in July 2013 Launch Kigali – Luanda‐ Point Noire ‐ July 2013 Over 584,000 passengers Average payloads – 50% Raise the average fare per sector from USD167 to USD169 Increase yields Year 4 (2014/15) The arrival of the Dreamliner B787‐8 / Airbus A330‐200 and establishment of an AMO (Authorized Maintenance Organization)– 2014/15; Deploy the Aircraft on the Dubai route – July 2014 Launch Kigali – Guangzhou – October 2014 Establish an Authorized Maintenance Organization (AMO) Over 695,000 ppgassengers Average payloads – 50% Raise the average fare per sector from USD169 to USD231 due to the longer haul routes Increase yields Fully‐fledged member of either the Star Alliance or Sky Team Year 5 (2015/16) Increased payloads beckoning for the second phase of growth Over 763,000 passengers Average payloads – 54% Raise the average fare per sector from USD231 to USD247 Increase yields PHASE 2 ‐ Rolling Business Plan 2016‐2020 The Phase Two - Business Plan 2016 – 2020 Acquire additional aircraft to increase capacity and replace Dry Lease Acquisition during phase one; Acquire two additional B737‐800 – 2016/2017 Acquire two additional CRJ‐900s 2016/2018 to increase capacity Acquire two ATR72‐600 – 2017/2018 to replace the Dry Lease Acquire two additional B787‐9 (new generation Dreamliner with a range exceeding 9,000 nautical miles) Launch additional long range destinations Launch Heathrow and other European cities Expand Asia coverage Phase 2 Business Plan 2016‐2020 Government exit strategy Break‐even results achieved Invite Strategic partner 2016/2017 – 40% equity IPO by 2018 – 40% sale Reduce Government ownership to 20% by 2018 RwandAir’s Success Determinants Sensitized clear internal and external communication to all stakeholders – to render Passionate Ownership Constant monitoring of markets Flexibility to adjust and adapt to changes Management focused on defined strategic path Full alignment with shareholder’s goals and interests A lean and mean organization structure to avoid bureaucracy Empowerment of employees for quick decision making Enablers of RwandAir’s Core Business Competitor’s Strategies Both Kenya Airways and Ethiopian Airlines have noted the importance of their Cargo Businesses, and have gone large scale by purchasing dditddedicated Cargo Aircra ft; this is inabid to btboost TtlTotal Revenues in the face of diluted Passenger Revenues, and this is further augmented by investments to boost otehr ancillary Revenues ((yHoliday Packages, etc) Ethiopian Airlines have now joined the Star Alliance, increasing their footprint worldwide Code Shares are now a principal means by which Airlines increase profitability through merging frequencies Strategic Alliances or setting up Associate Companies (ASKY – subsidiary of Ethiopian in West Africa) to feed and defeed their major routes Financial Highlights FFYYs2011 ‐2016 Average Pax per Sector Average pax per sector 44 50 41 36 38 40 30 30 20 Average pax per sector 10 0 FY2011‐12FY2012‐13FY2013‐14FY2014‐15FY2015‐16 Average Fare Per Sector Average Fare per Sector $247 $300 $231 $155 $167 $169 $200 $100 Average Fare per $0 Sector Other Performance Indices Average AlAnnual Hours per Aircraf t 4,000 rs uu 30003,000 Ho 3,188 3,291 2,000 2,950 2,380 2,584 1,000 Average Annual Hours Block l 0 per Aircraft Annua Other Performance Indices Average Yield ometer 0.250 Kil 0.213 0.200 0.189 0.203 0.150 0.155 0.162 flown 0.100 Average Yield er pp 00500.050 0.000 USD FY2011‐12 FY2012‐13 FY2013‐14 FY2014‐15 FY2015‐16 .