Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Investor Presentation (2005)
17 slides from Air France-klm Sa's investor presentation, 2005
Slide 1: The hub model
The hub model Pierre-Henri Gourgeon Deputy CEO of Air France-KLM
Slide 2: Does the hub model have a future?
Does the hub model have a future?
Slide 3: Two very distinct hub models
Two very distinct hub models The American model The European model medium-haul ó medium-haul short & medium-haul ó long-haul ç Domestic hub ç Intercontinental hub ç Large domestic market with many ç Most of Europe-long-haul traffic flows large flows justifying direct flights too thin to be served po
Slide 4: An effective model for Europe…
An effective model for Europe… 4 Overall, 60% of intercontinental passengers connect Europe – Asia Europe – North America ~30 million ~21 000 city pairs ~52 million ~12,000 city pairs passengers passengers Connecting Connecting passengers passengers 56% 63% City pairs City pairs not served 97% not s
Slide 5: …with great potential
…with great potential Growth in the intercontinental market +5.5% per year ç Connecting and point-to-point traffic look set to continue to grow strongly ~215 m passengers ç As a result, the role of major intercontinental hubs will be reinforced Connecting ~125 m 115 passengers passengers 70 Thanks t
Slide 6: The Air France-KLM dual-hub strategy
The Air France-KLM dual-hub strategy
Slide 7: We combine a solid point-to-point base…
We combine a solid point-to-point base… 133 100 51 37 29 20 London Paris Frankfurt Amsterdam Munich Zurich Source: MIDT – annual point-to-point traffic (PARIS = 100) 7
Slide 8: …with the most attractive dual-hub system in Europe
…with the most attractive dual-hub system in Europe Weekly long-haul / medium-haul connections in under two hours (Summer 2005) 6,619 AMS 2,965 MUC 17,900 11,993 CDG FRA 6,572 LHR Air France-KLM Lufthansa British Airways 8
Slide 9: What do we mean by an attractive hub?
What do we mean by an attractive hub? Air France hub at CDG Summer 2005 Medium-haul arrivals Long-haul departures before 9:30 h local from 10:15 to 11:00 h Marseille Los Angeles Bordeaux Paris .. Cincinnati Madrid .. Bombay Dublin .. . Tel Aviv Atlanta 2nd bank medium-haul ó long-haul à 59 medium-ha
Slide 10: Leveraging the dynamics of the hub
Leveraging the dynamics of the hub Connections Connections provide provide between between 50 50 and and 150% 150% of of additional additional traffic traffic on on any any given given route route Increased frequencies and/or aircraft capacity Point-to-point traffic Greater appeal / Connecting traff
Slide 11: How do we take full advantage of our two hubs?
How do we take full advantage of our two hubs? We We use use the the high high complementarity complementarity of of the the two two networks networks toto offer offer aa greater greater choice choice ofof destinations destinations and and schedules schedules 126 111 24 KLM unique destinations 30 45
Slide 12: Main prerequisites
Main prerequisites ç Link the Air France and KLM hubs 4 Shuttle service between Paris and Amsterdam 4 15 flights per day 4 Up to 1 flight every 30 minutes during peak hours ç Open up Air France and KLM's markets to each other 4 Development of routes between French regions and Amsterdam 4 Direct flig
Slide 13: Rationalization of long-haul networks
Rationalization of long-haul networks ç Concentrate thin long-haul flows on one hub 4 A single daily flight from one hub is more efficient than non-daily flights from both hubs 4 A single non-stop flight from one hub rather than indirect flights from both hubs ç Examples 4 Caracas is now only served
Slide 14: Strengthening of competitive position
Strengthening of competitive position ç On high-demand routes, offer customers a wider choice of schedules and fares thanks to: 4 Differentiated timings 4 Fare combination 4 Enabling passengers to travel on an origin-destination by flying on one of the 2 airlines on the outward journey and the other
Slide 15: Fare combination optimizes the dual-hub strategy
Fare combination optimizes the dual-hub strategy Paris Shanghai Madrid Amsterdam Outward Madrid-Shanghai Return Shanghai-Madrid 1 AF2001 MAD-CDG 20:25 22:30 1 KL896 PVG-AMS 12:15 17:40 AF112 CDG-PVG 23:15 16:25+1 KL1707 AMS-MAD 19:40 22:15 2 KL1702 MAD-AMS 12:50 15:35 2 AF117 PVG-CDG 23:55 06:00+1 K
Slide 16: Our dual-hub strategy is both efficient and profitable
Our dual-hub strategy is both efficient and profitable Financial year 2004-05 Air France hub KLM hub at CDG at AMS +13% +11% +10% +10% +8% +6% Total Total Connecting Total Total Connecting passengers revenue revenue passengers revenue revenue 16
Slide 17: So, does our hub model have a future?
So, does our hub model have a future? ç A solid point-to-point base ç Highly complementary networks ç Efficient network coordination ç Key marketing tools: common FFP and fare combination ç Two airport bases with strong development potential The The hub hub model model is is undoubtedly undoubtedly