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Strategic Variables for National Air Transport

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Strategic Variables for National Air Transport Instituto Superior de Ciências do Trabalho e da Empresa STRATEGIC VARIABLES FOR NATIONAL AIR TRANSPORT Carlos André Henriques Martins Correia Project submitted as partial requirement for the conferral of Master in Business Administration Supervisor: Drª Maria de Fátima Rodrigues, NAER – Novo Aeroporto, SA, Advisory of the Board Co-supervisor: Prof. Jorge Medeiros, Executive Director of the MSc. Business Administration Programme at ISCTE Business School April 2010 Strategic Variables for National Air Transport Acknowledgements To Dr.ª Maria de Fátima Rodrigues, for the orientation, guidance, exchange of thoughts, experiences, ideas and time availability throughout the entire process. To Professor Jorge Medeiros, for the support, assistance and willingness to help even in such a specific subject. To Dr.ª Sónia Mendonça and Dr.ª Ana Maria Almeida, TAP Portugal Network Development, for all the knowledge, support and contribution since the very beginning of the idea and especially, for the attitude of recognition and commitment, not only in my capabilities, but also in the project. To First Officer Nuno Correia, TAP Portugal A330/A340 fleet, for all the support. To Captain Ana Monteiro, SATA International A320 fleet, for the very useful assistance. To all who participated, directly or indirectly in this project, making it possible. To all, my most sincere thank you. Strategic Variables for National Air Transport Strategic Variables for National Air Transport Index 1. Abstract .............................................................................................................................. 1 2. Sumário Executivo ............................................................................................................ 3 3. Air Transport Forecasts .................................................................................................... 5 3.1. Key factors of traffic growth ................................................................................... 6 3.2. Emerging Markets: the major drivers of growth .................................................. 6 3.3. Expansion through network development and stronger hubs ............................. 8 3.4. Growth of LCC ......................................................................................................... 9 3.5. Traffic estimates by Region ................................................................................... 13 3.6. Air Cargo ................................................................................................................ 23 3.7. Increased demand for air transport can increase congestion ............................ 26 3.8. Fuel .......................................................................................................................... 29 4. Contributions for a strategic thinking in Portugal ........................................................ 35 4.1. Challenges and opportunities ................................................................................ 35 4.2. Threats ..................................................................................................................... 45 4.3. Strategic Positionning ............................................................................................ 48 4.3.1. Scenario 1 - Portugal considers Air Transport a strategic sector ..................... 48 4.3.1.1. Key Factors .................................................................................................. 48 4.3.1.2. Impacts ......................................................................................................... 52 4.3.2. Scenario 2 - Portugal does not consider Air Transport a strategic sector ........ 60 4.3.2.1. Impacts ......................................................................................................... 60 4.3.3. Conclusion ........................................................................................................ 67 4.3.3.1. Scenario 1 -Portugal considers Air Transport a strategic sector .................. 68 4.3.3.2. Scenario 2 - Portugal does not consider Air Transport a strategic sector .... 69 5. Methodology .................................................................................................................... 72 6. Bibliography .................................................................................................................... 79 7. ANNEXES ....................................................................................................................... 83 I Strategic Variables for National Air Transport 7.1. Air Transport – Current situation diagnosis and Problem identification ........ 83 7.1.1. Context ............................................................................................................. 83 7.1.1.1. Air Transport Importance ............................................................................. 83 7.1.1.2. Portugal’s positioning ................................................................................ 85 7.1.2. Service .............................................................................................................. 87 7.1.2.1. Mobility ........................................................................................................ 87 7.1.2.2. Tourism ........................................................................................................ 91 7.1.2.3. HUB ........................................................................................................... 102 7.1.2.4. Air Cargo .................................................................................................... 108 7.1.3. Operators ........................................................................................................ 119 7.1.3.1. Airlines ....................................................................................................... 119 7.1.3.2. Airports ....................................................................................................... 126 7.1.3.3. Air Traffic Services .................................................................................... 138 7.1.4. Transversal Subjects ....................................................................................... 141 7.1.4.1. Environment ............................................................................................... 141 7.1.4.2. Security and Safety ..................................................................................... 146 7.1.4.3. Property Structure ...................................................................................... 154 7.2. Index of Tables and Figures ................................................................................ 159 7.3. Glossary ................................................................................................................. 164 II Strategic Variables for National Air Transport 1. ABSTRACT Air Transport allowed over time, to reduce distances, eliminate borders, increase mobility and contribute to a new model of society as we know today.These are some of the reasons why in recent years, there were times of growth, development and higher demand, strengthening its role in a society increasingly globalized. While environmental costs caused by air transport are often highlighted, very little is said about its benefits. Broadly speaking it can be said that aviation contributes to worldwide trade by opening access to several markets, for investment through internationalization and access to new resources and skills in order to stimulate productivity and encourage competition as well as tourism. Its importance should not therefore be questioned or neglected. On the contrary, the preparation of its future should be a constant concern by analyzing the main challenges for the sector and for all others involved. There are many paths to choose and several variables that must be taken into account. This study aims to analyze the main variables, to present perspectives, alert to emerging opportunities and external adverse factors, and to identify some options that can better serve Air Transport in Portugal. The purpose of this dissertation is also to highlight the weaknesses of this sector in Portugal and the need to consider a medium/long-term vision and a strategy for such an important sector for the Portuguese economy and society. Keywords: Air Transport, Infrastructures, Airlines, Strategic Positionning JEL Classification Codes: Business Economics (M20), Other special topics (Z19). 1 Strategic Variables for National Air Transport RESUMO O Transporte Aéreo permitiu ao longo dos tempos, reduzir distâncias, eliminar fronteiras e contribuir para o modelo de sociedade em que hoje vivemos, sendo estas algumas das causas pelas quais tem vivido nos últimos anos, tempos de grande expansão e procura, não só a nível de turismo como também em termos de viagens em negócios, reforçando ainda mais o seu papel numa sociedade cada vez mais globalizada. A sua importância não deve por isso ser posta em causa ou negligenciada, devendo ser uma preocupação constante a preparação do seu futuro analisando quais os desafios que se colocam ao sector e a todos os que o constroem. Existem diversos caminhos que podem ser escolhidos e várias variáveis a ter em conta. Este estudo tem como objectivo analisar essas variáveis e identificar caminhos que possam melhor servir o transporte aéreo Português. Enquanto os custos em termos ambientais provocados pelo transporte aéreo estão bem documentados,
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