CAPA Middle East & Africa Aviation Summit

CAPA – Centre for Aviation, Executive Chairman, Peter Harbison 

Dubai Airports, CEO, Paul Griffiths

Travelport, Global Head of New Distribution, Ian Heywood

South African Airways, Group CEO, Vuyani Jarana

flydubai, CEO, Ghaith Al Ghaith

IBM, Global Managing Director, Dee Waddell

IBM, Chief Innovation Officer Emeritus, Bernard Meyerson

AACO, Secretary General, Abdul Wahab Teffaha

London Stansted Airport CCO Aboudy Nasser says “airports have to change the way they think” as most see themselves as simply infrastructure. Mr Nasser says this mindset has to change and airports must instead be a partner to airlines through the whole customer experience process. The London airport is currently working on a new flight connection model and successfully conducted a full end-to-end test of the service in Apr-2019, ahead of its formal launch.

IBM chief innovation officer Bernard Meyerson says transformation of governance is an important part of business transformation, and  it’s not just about technology”. Dr Meyerson says executives need to separate innovation from the slow legacy processes of businesses and put trust in employees to execute projects. “You may lose a bit of control, but you may gain some spectacular outcomes,” he says, and while not all initiatives will work, “there has to be some tolerance of risk”.

Sabre VP travel solutions Middle East and Africa Dino Gelmetti believes achieving innovation comes down to a company’s willingness to change and lessons in any future retail like strategy will mainly come from outside the aviation industry.

Already established in the London market with flights to Heathrow and Gatwick airports, Emirates Airline inaugurated flights between its Dubai International hub and Stansted. Now, just a year on and the carrier is adding a second daily frequency, meeting strong local demand, but also delivering additional connection options. London Stansted Airport CCO Aboudy Nasser explains why the route has proved successful and sees the London airport become the second fastest global destination airport to secure a second daily Emirates frequency from Dubai.

• How do long haul-short haul partnerships enable growth and scale?
• Are these new partnership arrangements set to disrupt network carriers’ long haul operations?
• How seamless are self connecting platforms and virtual interlining? What role can airports play in enabling connectivity?
• In which markets do long haul-short haul LCC partnerships proliferate?
• Can long haul low cost carrier operate as stand alone entities without short haul partners?

Moderator: CAPA – Centre for Aviation, Chief Analyst, Brendan Sobie

Panel:

• flyadeal, CEO, Con Korfiatis
• ICF, VP, Managing Director Aviation, Jared Harckham
• London Stansted Airport, CCO, Aboudy Nasser

Despite the near-mediaeval nature of aviation’s regulatory structure, it is only relatively rarely that politics intervenes to disrupt airline connections. Perhaps it is the socio-humanitarian nature of the industry’s role that often places mere political differences in the shade. Nowhere has politics made such inroads into efficient air service operations as in the Middle East. 
Middle East seat growth slowed in 2018. The Gulf three grew capacity by only 2% and may feel increased competitive pressure from Turkish Airlines.

• How do the region’s smaller carriers differentiate and compete against the big three Gulf carriers?
• What lessons can be learnt from airport privatisation here and abroad?
• Finding the right service proposition for domestic and long haul – traditional full service or unbundled?
• What strategies need to be adopted to meet the distributions unique distribution challenges eg around late bookings?
• How to reconcile the aim of open skies with creating a market for a national airline?

Moderator: CAPA - Centre for Aviation, Executive Chairman, Peter Harbison
Panel:

• AACO, Secretary General, Abdul Wahab Teffaha
• Gulf Air, CCO, Vincent Coste
• Jazeera Airways, CEO, Rohit Ramachandran
• Turkish Airlines, CMO, Ahmet Olmustur

While LCCs in both regions are facing very different issues, bringing them together will truly identify important lessons and hopefully drive future growth in both regions.
Africa is an extremely challenging market for any LCC or new start-up. However, a long list of airline failures has not dissuaded more start-ups from entering the market. Nigeria’s Green Africa Airways is the latest to seek to break the logjam, well funded and with strong credentials.

Flydubai remained the biggest LCC in the Middle East and was also again the number five airline overall, but its growth was only a low single digit percentage in 2018 and its capacity has remained virtually unchanged since 2016.

• Is the rise of the LCC in the Middle East sustainable?
• Is Africa ready for more LCCs?
• Can the pan-African LCC model (e.g. fastjet) succeed? 

Moderator: CAPA – Centre for Aviation, Chief Analyst, Brendan Sobie
Panel:

• Cleartrip, EVP and Managing Director, Middle East, Sameer Bagul
• fastjet, CEO & Executive Director, Nico Bezuidenhout
• flyadeal, CEO, Con Korfiatis
• SalamAir, CEO, Mohamed Ahmed

Legacy distribution systems have for decades presented airlines with the twin problems of high costs and product commoditisation. In efforts to address these issues, a handful of carriers throughout the world have invested heavily into establishing their own API channels with agents, while the concurrent push by IATA for airlines to implement the NDC standard has encouraged the industry to adopt a retail focused approach to distribution.

The GDS will also need to evolve in order to remain relevant and to compete effectively against other intermediaries and aggregators such as metasearch companies (some of which now have direct booking capabilities), as well as digital behemoths such as Amazon, Google, and Facebook - to gain a slice of the pie.

But as airlines work on enhancing their retail offering and improving their merchandising capability via both direct and indirect channels, a resounding message from industry players is that airlines need to consider the importance of mobile and messaging platforms, which are slowly replacing the desktop as the preferred interface for researching and booking travel.

• Is this increasingly fragmented and complex commercial and technological distribution landscape sustainable? How will business models evolve in response? Is there a need for a direct connect aggregator?
• Should airlines build lots of direct connects or revert back to lean, centralised distribution channels?
• Who is going to be offering services to bridge the gap between airlines/aggregators that are NDC compliant and those that aren’t? Will it be the GDS and IT providers, other airlines or speciality providers?
• How are newer intermediaries adding value to airline distribution?
• How do airlines enhance their digital shopfront? Are airlines over-emphasising the importance of airline.com over mobile messaging platforms and bot technologies?

Moderator: Travelport, Global Head of New Distribution, Ian Heywood
Panel:

• dnata, Vice President – Air & Strategic Alliances, Middle East & India, Alan William
• Etihad Airways, Vice President Revenue Management, Dieter Westermann
• Gulf Air, Global Head of Sales & Steering, Vikas Manra

Africa traditionally does not figure highly on airport construction but demand for air travel is growing amongst the 1.2 billion population and in some countries the middle class is swelling. Accordingly, the number of airport construction projects is growing and there is a level of ambition there to build airports that are modern, efficient, and which will cater for growth for several decades.

In the Middle East there are not quite as many projects one might expect although some large ones are scheduled to finish two years later, such as Kuwait Airport’s expansion project (2023) while additional infrastructure at Dubai World Central is being delivered in a piecemeal fashion through to the end of the next decade.

It is interesting to note the big three airline hub locations (Dubai, Doha and Abu Dhabi) are not alone by any means in being in receipt of capital expenditure on this scale. The largest project scheduled to conclude in the next few years is in Saudi Arabia while Iran has two.

These infrastructure constraints in both the Middle East & Africa are impacting greatly on aviation. This this session we will review:

• The role of the airline and airport relationship;
• What lessons can be learned from the rest of the world?
• How do we unlock the value of slots at congested airports?
• Do Middle Eastern airports and air navigation service providers have the capacity to accommodate the growth ambitions of the region’s carriers?

Moderator: Aviation Minds, Managing Partner, Dr. Nadine Itani

Panel:

• Airports PPP, Managing Director, Waleed Youssef
• Jazeera Airways, CEO, Rohit Ramachandran
• London Stansted Airport, CEO, Ken O’Toole
• Los Angeles World Airports, COO, Samson Mengistu

• What are the main source markets for Middle East and Africa inbound tourism?
• What are the key source markets for international growth?
• Is the region well positioned to attract key inbound markets?
• How can these regions target further growth?
• How do the superconnectors drive tourism growth from current transiting customers? 

Moderator: IBM, Global Managing Director, Dee Waddell

Panel:

• IBM, Chief Innovation Officer Emeritus, Bernard Meyerson
• ICF, Vice President, Managing Director Aviation, Jared Harckham
• South African Airways, Group CEO, Vuyani Jarana
• WTTC, Regional Director APAC & MEA, Nigel David

Africa remains a market of huge potential but even larger challenges. The outlook for 2019 is mostly more of the same, but with some glimmers of hope.
New start-ups and most existing airlines will struggle to overcome the obstacles that have repeatedly prevented most African airlines from succeeding. Foreign airlines dominate the African market and have a huge competitive advantage. Africa is an extremely challenging market for any LCC or new start-up. However, a long list of airline failures has not dissuaded more start-ups from entering the market. Nigeria’s Green Africa Airways is the latest to seek to break the logjam, well funded and with strong credentials.

Africa’s current commercial aircraft fleet consists of 1,700 aircraft, according to CAPA Fleet Database, and there are only 257 aircraft on order from African airlines.

The African airline sector continues to struggle, with most airlines in the red

• Ethiopian Airlines has emerged as the clear market leader and is pursuing rapid growth, partially through new cross-border JVs
• Royal Air Maroc has also emerged as a standout in a challenging market and is now preparing to join oneworld
• Green Africa Airways is the latest high profile start-up, in Nigeria

Moderator: CAPA - Centre for Aviation, Content Editor, Blue Swan Daily, Rich Maslen
Panel:

• Astral Aviation, CEO, Sanjeev Gadhia
• Embraer, General Manager - Special Projects AME, Hussein Dabbas
• fastJet, Group CEO, Nico Bezuidenhout
• IATA, Regional Director, Account Management, AME

Technology within the aviation sector continues to evolve and develop leading to improved passenger experience, increased revenues and enhanced service. There are a range of tools available now which could assist in these areas from Customer Focused Platforms; Artificial Intelligence; Digital technology; and many more.

These solutions are designed to enable an airline to increase their revenue, evolve their retailing strategies, and increase customer satisfaction.

• What do airlines need to do to evolve into proper travel retailers?
• What can they learn from other travel suppliers who excel in this arena?
• What other/newer distribution technologies are required to enable further airline growth?
• What technology is set to shape the way the future traveller interacts with airlines and airports?
• How will travel retail evolve after basic merchandising?

Session Provocateur: Skyscanner, Senior Director, Strategic Partnerships, Hugh Aitken

Moderator: Skyscanner, Senior Director, Strategic Partnerships, Hugh Aitken
Panel:

• Caravelo, CCO, Jonathan Newman
• Etihad Airways, Vice President Revenue Management, Dieter Westermann
• Sabre, Vice President, Travel Solutions, MEA, Dino Gelmetti

flydubai CEO Ghaith Al Ghaith discusses the airline’s accomplishments in its decade and how it has succeeded at launching destinations that were not previously served from Dubai. flydubai, which turns 10 years old on 1-Jun-2019, has expanded its network to over 90 destinations, including more than 20 in the CIS. It recently became the first airline from the Middle East to serve Uzbekistan, which had been the last remaining Central Asian country not yet served by flydubai. Mr Ghaith talks about how flydubai has been able to overcome challenges in entering Uzbekistan and other CIS markets and how it has been able to grow to become one of the leading airlines in the region.

As he outlines the national carrier’s own development, South African Airways Group CEO Vuyani Jarana believes the limitations of transport services in Africa are continuing to hold the continent back in terms of trade and connectivity. In a market where the geographic scale of Africa represents a challenge, and effectively can be viewed as a “continent of continents” he suggests new business and commercial models must be developed to suit Africa. He says revolution in air transport will require more than just regulatory change and governments must appreciate the economics of the aviation sector and the impact of excessive charges and taxes. But, such reform policies are not easy for governments to implement unless they are provided with clear economic models of the benefits of air travel.

Dubai Airports CEO Paul Griffiths believes short haul transport could change as new technologies are introduced, but notes that where such technologies are already available, consumers have shown a reluctance to embrace them. While this resistance is more about the resistance to change than the resistance to technology, it highlights that education and a mindset shift will be required to break away from the ‘we have always done it that way’ mentality. And technology shouldn’t be about replacing the human touch and instead should be used to ultimately enable airport staff to deliver a better customer experience.