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“The Atlantic and You” António Gomes De Menezes

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“The Atlantic and You” António Gomes De Menezes P3 “The Atlantic and You” António Gomes de Menezes: [email protected] (SATA and the University of the Azores) with Luís Silveira and Ana Azevedo (SATA) Slide 1 P3 Que título? SATA is building something... "Building a bridge between Europe and America"? PDLXTSP; 4/7/2010 P2 Foundation – August 21th, 1941 First flight – June 15th, 1947 Today Slide 2 P2 este ou outro slide como pano de fundo para apresentar em empresa. PDLXTSP; 4/7/2010 SATA: 14 aircraft, 40+ destinations and 1.5Mpax (2010) SATA Internacional SATA Air Açores 4 4 4 2 Corporate Mission Network Network Design A geographical decision: • Which markets do we want to serve? • Geography and Corporate Identity (100% owned by the Autonomous Region of the Azores: connecting the Azores and the Azores to the World) • Operating outside of the Azores (LIS, OPO, FNC) in order to reach economies of scale and scope. An airline network is: • a source of brand identity; • a revenue and cost driver; • a source of competitive strength or weakness; • a potential hedge against economic cycles. Source: Holloway, S., Straight and Level , Ashgate, 2008 Types of Networks Small/medium-sized network carriers Larger network carriers SATA Internacional Network - Jets SATA Air Açores Network – Turboprops Network Outsourcing The network design involves deciding • The pattern of routes to be operated; • Who will operate them – using own aircraft or outsourcing capacity provision. Extension of the network by • Code-sharing; • Block-spacing; • Joint services; • Franchising. Source: Holloway, S., Straight and Level , Ashgate, 2008 The Bombardier Q400 NextGen, phased-in in the 1 st Quarter of 2010, brought new synergies SATA Internacional outsources SATA Air Açores to replace the A320 (CY159) by the Q400 NG (Y80) in PDL-FNC route and to open the new routes PDL-FNC-LPA and PDL-FNC-FAO SP:S4 SP:S4 SP:S4 SP:S4 - operated by SP on behalf of S4 (ACMI) S4 – Domestic Network Routes operated by SATA Internacional, code-shared with TAP Portugal (marketing carrier) S4*TP S4 – Domestic Network Routes operated by SATA Air Açores aircraft and crew on behalf of SATA Internacional, code-shared with TAP Portugal SP:S4 S4 – Domestic Network Routes operated by TAP Portugal, code-shared with SATA Internacional (marketing carrier) TP*S4 S4 – Domestic Network Parallel code-sharing with consolidation in thin routes S4*TP TP*S4 Parallel code-sharing: Dual service Sole service S4 – European Routes "destination carrier” Routes operated by SATA Internacional, code-shared with TAP Portugal (marketing carrier) S4 – European Routes Route operated by SATA Air Açores aircraft and crew on behalf of SATA Internacional, code-shared with TAP Portugal SP:S4 S4 – European Routes Routes operated by TAP Portugal code-shared with SATA Internacional (marketing carrier) TP*S4 S4 – European Routes Seasonal point-to-point services plus through hub services MAD BCN LIS Parallel Code-sharing: sole S4 sole TP dual S4 Network – North America Routes operated by SATA Internacional. TAP Portugal places its code on LIS+PDL/BOS, LIS+OPO+PDL/YYZ+YHM routes S4 Network – North America Next step: concentrating BOS and YYZ destinations and code-sharing connections (through hub services versus point-to-point services) P5 S4 Network– Charter A dying species? Slide 22 P5 intra-Europe, charters are being replaced by LLC; surving on long-haul market; mergers/consolidation among charter airlines. PDLXTSP; 4/7/2010 Code-sharing Motivations: • To broaden network reach (accessing to particular markets); • To deepen network coverage (increasing the number of frequencies); • To improve the GDS display positions of connecting services; • To develop an alliance strategy; • To contain costs, avoid launching new routes that cater only to price-sensitive leisure traffic, with low- yields, directional and seasonal traffic. Source: Holloway, S., Straight and Level , Ashgate, 2008 Alliances Categories: Bringing SATA under the radar. TYPE OF AGREEMENT TYPE OF ALLIANCE Commercial Alliance Interline/pro-rate Mutual ground handling Frequent-flyer Programmes Code-Share Block Space Common Sales/Ticket Outlets Strategic Alliance Schedule/Capacity Coordination Joint Engineering Joint Flights Franchising Common Branding Joint Cargo and Passenger Services Ventures Full Merger Source: Doganis R., The Airline Business , Routledge, 2006 Alliances => Network Expansion Global alliances: • code-sharing • schedule co-ordination • joint sales offices and ground handling • frequent flyer programmes • joint maintenance Regional alliances: • code-sharing • joint marketing and sales • some capacity coordination • use of each other lounges Route- specific alliances: • covering a limited number of city pairs • most common: interline pro-rate and code-sharing SATA Network and Alliance Strategy Geographical decision: • SATA “natural” markets – Azores to/from Portugal Mainland and North America (Boston and Toronto); • Atlantic markets such as Madeira to/from Portugal Mainland and Europe; Portugal Mainland to/from Boston and Toronto. Alliance: • Partnership with the national/flag network airline (code-sharing and FFP). • Next step: code-sharing and/or block-spacing for connections within USA and Canada (underway). • Position SATA to capture traffic to the Azores and Madeira from Europe (via LIS, including New Lisbon Airport; via OPO and via FKT or other main tourism market). António Gomes de Menezes [email protected] Porto, July 7th, 2010.
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