Fly to in a new fashion. The Emirates flight from to New York

Valerio Ardito & Robin Klemm

Connecting MXP-JFK

• More than 150,000 passengers flying from Milan to NYC annually • First chance for foreign and for Italian passengers to overcome monopoly and the joint venture with the sky team alliance (Delta, Air , KLM, Alitalia) • Areas of potential improvement (business captive) • Alitalia moved to Rome for intercontinental connections (piano Fenice) • ceased Lufthansa Italia subsidiary in 2011 • Delta reduced frequency of connections to USA • No existing first class service on this segment • SEA needs a new strong partner • Malpensa is most important cargo hub • Bridge from Dubai over Milan to NYC • 280 tons weekly cargo capacity on Emirates flights between Milan-JFK • Broad perspective for strategy (leisure, business passengers etc.) Market Analysis

• October 1: First Emirates flight from Milan to New York • Already a congested market, but Emirates currently the most important player in terms of seat capacity (+28%) and tons for cargo (280 tons) Carrier From To Frequency Seat Capacity American MXP JFK 7 1526 Alitalia MXP JFK 7 1568 Delta MXP JFK 7 1722 United Airlines MXP EWR 7 1645 Emirates MXP JFK 7 2520 • With its own Boeing 777-300° (340 seats), Emirates is the only carrier offering a first class product.

Market Analysis

• Continuous expansion, with a peak in 2009 at 235.000 seats • In 2013 (even without Emirates), the market grew up to 240.000 seats • Current capacity of 275.000 seats with Emirates (November 2013)

Source: CAPA, Centre for Aviation Regulation

Aim: Ensure compliance with the technical rules of certification and supervision in the field of civil aviation

Who? • Italy: ENAC and Ministry of Transportation • USA: Department of Transportation (DOT)

Why? • Benefits for customers • Competition • Fight cartels etc. Stealing the Concession

• Singapore Airlines were the first to get the “fifth freedom”

“The right of an airline from one country to land in a different country, pick up passengers, and carry them on to a third country.”

BUT • SQ Country Manger for Italy: The approval of the connection «arrived too late in respect to the request». In the meantime the market both in Italy and USA has changed. • Main reasons: uncertainty, risk aversion, protectionism • The idea of SQ was to make a stop-over for their long haul flight from SIN-EWR (18h of flight) but due to the reasons above they prefer to operate this stop in FRA with their A380.  more seats, fair competition, optimized cost of fuel

Source: Wiktionary

Alitalia and Delta against Emirates

• SkyTeam Alliance trying to fight Emirates in the court • Don’t want foreign company to offer international flights from Italy • Say that Emirates does not offer any extra benefit to the society

BUT: • Prices of other carriers go down • Afternoon flight available now • Punctuality indicator increases • “significant economic benefits for the Italian economy, exporters, tourism and airports” (ENAC) “Fly to Italy in a new fashion.“

• US Open sponsorship • Banners in NYC • “New York speaks about Emirates.“ • Website • Catalogue • Round-trip: 540€ (economy) • Extra luggage allowance • Double miles offering • No aggressive price strategy/price promotion for business & first class (great service has its price) • IDEA: Free “Honeymoon-Package“ Using Internal Forces

• Flight arrives at 7 pm => no connections => make passengers stay for a night or two • Packaged deals for low demand periods • Apply Dubai strategy to New York to make it a “destination to stay” • Enhance the cooperation with Jumeirah hotel chain • E.g. one/two free nights at a Jumeirah hotel for business/first class passengers • Broadway theatre tickets for economy (use high volume discounts) • “Skip the line“-ticket at Empire State Building Frequent Flyer Program (Skywards)

• Challenge to win over high-status passengers of other programs • Offer immediate (but temporary) membership to highest status (test period) • Miles Accelerator for status miles • Long-term loyalty rewards • Lifelong platinum status after 10 years continuous membership • Develop app for hotel booking with possibility to earn miles or include in Jumeirah booking system (similar to „JustBook“ of Miles & More) • Allow customers to spend miles in Jumeirah hotels • Credit Card cooperation with international operator (e.g. Amex Italy/US) • Miles for companies to build up credit (like „blueCredit“) Partnerships

Airlines (Jet blue) Dallas/Fort Worth – Dubai • Codeshare agreement: "B6" code on all Houston/Intercontinental – Dubai Emirates flights to and from the United States Los Angeles – Dubai New York/JFK – Dubai • Jet Blue now offers Business Class, so Emirates New York/JFK – Milan customers can continue travel in same superior class San Francisco – Dubai • Frequent flyer miles for all connections Seattle – Dubai Washington D.C./Dulles – Dubai Railway Agreement Trenitalia • Train connections all over Italy • Discount on plane tickets for Trenitalia members (5-7%) Partnerships

Airport - Malpensa • 2.5 mn investment in Malpensa Lounge • “Via Milano Package”

Catering • Lounge & aircraft catering by Do & Co • Premium quality in all classes • 7 courses in first, 5 courses in business class • Full meal in • Service throughout the flight (snacks, drinks etc.)

Sources

• http://centreforaviation.com/about-capa/glossary/ • http://content.emirates.com/downloads/ek/pdfs/open_sky/2013102 21156_Open_Sky_Issue_17.pdf • http://www.youtube.com/watch?feature=player_embedded&v=SWY 97aTdvzY • www.aviazionecivile.it • www.airliners.net • www.flyertalk.com • http://www.linkiesta.it/blogs/rotta-verso-il-mercato/la-rotta-milano- new-york-e-stata-liberalizzata-ma-all-italiana