Beruflich Dokumente
Kultur Dokumente
IAG
Agenda
0900 Introduction Antonio Vazquez Chairman, IAG
0905
0950
1030
Coffee
Agenda
1100 Revenue synergies Strategy, Commercial Robert Boyle Director of Strategy, IAG
1445
Agenda
1530 Close and Q&A Willie Walsh Chief Executive Officer, IAG
1645
1715 1745
Finish
Bus to airport for BA461 Bus to airport for BA463
Finance
Enrique Dupuy Group Chief Financial Officer
FD EPS
Organic growth 150m 0.50
1.2bn
0.40
0.30
0.20
FD EPS
Organic growth 150m 0.50
1.2bn
0.40
0.30
FD EPS
Organic growth 150m 0.50
Defending margins
1.2bn
0.40
0.30
0.20
FD EPS
0.50
Exploiting network opportunities in strategic markets Cost reductions from new, more efficient fleet Asset turn and margin improvement from IB Express, and other short haul projects Asset turn and margin improvement from IB hub projects Asset turn improvements from range of new products Passenger business IAG cargo Avios IT Maintenance Procurement Resource optimisation
Growth 150m
1.2bn
0.40
0.30
Synergies
450m
c. 500m
0.20
FD EPS
0.50
Access to growth markets (slots / partners / other)
Growth 150m
1.2bn
Shape of the cycle Industry capacity discipline Aircraft finance availability / cost Industrial relations
0.40
0.30 Synergies
Group execution risk
450m
c. 500m
0.20
1.xx xx
xx% xx
340m
225m 116m
86 30 80 150 200 270
Cost saving
60
40
50
+ ++ +
++ ++
++
+
++ ++ + +
>150m
++ ++
IB BA
36 52 14
40 45 1
16*Includes 8 options
B777
B787 A380 A318
49
54
16 9
153
68 84 39 191 344
167
76 95 34 205 372
34
9 10
11
12
35
16 19 53 12 23 16 51
Further flexibility possible with contractual ability to defer new deliveries but with reduction in pace of cost efficiency gains
Capex plan
Item
Interim aircraft Newgen - core
Source of funds
Synthetic + pure operating leases Diversified approach encompassing: syndicated term facilities / tax-based leasing / secured debt capital markets / pure operating leases Backstop financing + flexible operating leases Internal cash flow + structured financings
Newgen - flex New aircraft intro cost BA new products IB new long-haul IB brand relaunch Synergy investment
Maintain liquidity facilities to build resilience and to equip the business to absorb shocks and minimise disruption risks
Fleet financing will be tailored to match fleet operational requirements Diversification of financing sources to adapt to fast-changing financing markets and to mitigate market volatility
Residual value risks on interim and existing fleet will be actively managed
Investments in product and brand to be funded mostly through internal cashflow
Board manages exposure parameters on quarterly basis - confirms target hedging profile - confirms level of discretion delegated to the IAG Hedging Committee (typically +/- 10%) IAG Hedging Committee establishes monthly mandate for execution of trades Main exposures - Fuel burn of 7.5 million MT per annum - US $ short of $3.5 billion (varying with fuel price) - Carbon emissions of 23 MT per annum net ETS exposure of c. 90m (varying with carbon credit price)
Fuel risk and foreign exchange risk managed using similar hedging profiles
Current Hedging Position Q4-11 Fuel cover US$ cover 78% 78% Q1-12 68% 71% 12 mths 63% 59% FY12 53% 44%
Conclusion
We are focused internally on generating synergies and improving our competitiveness We will allocate a prudent level of growth to markets where we either want to cement an existing leadership position, or develop a leadership opportunity We will actively manage our network portfolio to react quickly to underlying demand and shield the Group from shocks We will reduce exposure to markets where we believe there to be structural or irrational overcapacity
We aim to transform our profitability by being disciplined with our capacity, and retaining the synergy benefits and profit improvements for our shareholders
29
Unified
Cargo Avios Business Services
Airports
Diverse
Replicated
Revenue Initiatives
80
Procurement MRO
30 26
Resource optimisation IT
Y5 Previous Target
Y5 Current Target
Detailed breakdown
Progress so far
Others Cargo Ground Handling Distrib. Svcs. Catering In-Flight Products Crew Hotels Fuel Insurance
Insurance: Joint placement of a/c policies Jet Fuel: Joint tendering across the network Crew Hotels: Joint crew hotel accommodation and
night stop reductions in hubs
Cargo Procurement: EU trucking tender Airports Ground Handling: Joint contracts at home
bases and key premium airports
Y5 Split
Line & heavy maintenance planning Inventory & coordinate procurement Joint commercial Insource Coordinate engineering Y5 Split
Engineering & procurement: Common approach Insource works: BA CFM56/5B engine overhaul contract
with IB; BA Engine lease with third parties through IB
Progress so far
A-330: Improvement vs. 2008 Iberia RFP A-320: Applying the final application for A320 options within IAG Maintenance: Total care agreements
Maintenance
Fleet
Progress so far
Sales Force: Successfully integrated UK, Spain, N. America, S. Africa, Nigeria, Egypt, Russia, Chile, Switzerland Airports: Successfully integrated ticket desk, offices or supervision at LHR, JFK, BRU, TXL, FRA, ORY, LAX, AMS and LAD
Corporate Centre
Corporate centre: Initial steps on Finance, HR, Procurement Legal and Communications
Sales & Call Centre Airports
Cargo Y5 Split
Unified
Cargo Avios Business Services
Airports
Diverse
Replicated
Cargo
Avios
Services
Common
Scalable Platform
(Plug & Play)
Simple (Reduce
Complexity)
IT Infrastructure
Cargo
Avios
Additional Platforms
Cargo Platform
Reward Platform
IAG Information
IAG Common Services & Integration Platform Technology Platform
Initial Focus:
Data
Integration of information IT team of approx. 300 people across BA, IB & Avios with 20 sub-projects Underpinning Avios launch later this month
Single Currency Balance Transfer Tool Common Zone Maps Redemption Platform
Initial Focus:
Data
Leverage best of both Phase 1 underway to deliver quick wins & underpin revenue growth in 2012 Business case for Phase 2 platform under development
One revenue management solution Single customer programme Joint deals with large customers One on-line portal Electronic AirWay Bills
Initial Focus:
Data
Revenue Accounting
Progress so far
Infrastructure Consolidation: Initial IT strategies and standards aligned across OpCos by Service Tower (Servers, Desktop, Telecoms, Service Desk, Security)
Application Consolidation
Application Architecture: IAG Business & Systems Capability Models developed IT Operating Model Restructuring of BA, Iberia IT teams
Procurement & Sourcing: Joint RFPs & contracts negotiated against draft sourcing strategy
230m
New target
145m
150m
Previous target
85m
Industry Context
North America
Asia Pacific Latin America Rest of world
7%
12%
27% 28%
35%
21%
9%
Industry is consolidating
Airlines: US 2010 Revenues
78%
In 2000 top 5 accounted for 66.3%
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
20
15
AMS
VIE BRU
LON PAR ZRH MUC FRA
10
IAG
Source: CRS Oct 2010-Sep 2011
AF-KL
LH Group
Guadalupe
Sydney Paris Delhi
New York
London
Los Angeles
Seoul
Hong Kong
Bangkok
Source: October 2010-September 2011 CRS Data. Sectors over 3,000 miles
Caracas
Lima Buenos Aires Mexico Quito
Sao Paulo
Paramaribo
Paris
Amsterdam
Beijing to Sao Paulo via Madrid is 5 kilometres longer than direct Beijing to Sao Paulo via London is 33 kilometres longer than direct
Heathrow 2011
Engineering
T2
Cargo
Barajas infrastructure
T4
T1-T2-T3
T4 S
BA Winter 2011
4-5
5-6
6-7
7-8
8-9
9-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
17-18
18-19
19-20
20-21
21-22
22-23
Arrivals
7-8
8-9
9-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
17-18
18-19
19-20
20-21
21-22
22-23
23-24
0-1
1-2
Arrivals
10
13
06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00
Air bridge cargo capacity - IB Airbus 340, BA Boeing 767 Night stops removed
13
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
Key Flows
Boston
24 7 21
Washington
21 18 18
Philadelphia Atlanta
Key
2010 Current-$ GDP
14 5 7
14 7
IAG, AF-KL, LH Group weekly frequencies
Source: Bureau of Economic Analysis. U.S. Department of Commerce Nov 2011 OAG
San Francisco
14 12 21
6
Source: Bureau of Economic Analysis. U.S. Department of Commerce Nov 2011 OAG
22
19
Houston
14
15
7
Mexico
17 17 7
Brazil
31
38
Colombia
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
26
11
Argentina
24
Source: IMF September 2011 World Economic Outlook Nov 2011 OAG
10
24.1
24.2 17.5
24.4 16.8
24.8
16.8 8.2
30.0 25.0
30.2
30.0
19.7 16.1
20.8
21.3
17.5 7.4
20.0 15.0
20.6
7.1
7.7
16.4
15.8
16.2
2008
IAG
2009
AF-KL
2010
LH Group
Jan-Sep 11
2008
IAG
2009
AF-KL
2010
LH Group
Jan-Sep 11
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
Japan
35
41
India
45
Rep. of Korea
69
12 12
27
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
Australia
14
Source: IMF September 2011 WEO Nov 2011 OAG
Iran Israel
28 54 21 5 11
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
Saudi Arabia
12 12 24
U.A. Emirates
28 29
35
81
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
Egypt
32
Algeria
30 15 7
Tunisia
38
Sudan
3 8
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
Kenya Ghana
7 7 1 7 7
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
Angola
4 4
South Africa
31
24
21
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
Intra-Europe
LCC
56%
51%
46%
43%
40%
39%
36%
35%
Big 3
04 LCC
05
06
07
08
09
10
11
Regional/Small Hub
Large Hub
50%
50%
40%
38%
26% 18%
20%
10%
18%
0%
2.005
2.006
2.007
2.008
2.009
2.010
2.011
Key
Real 2016 GDP, 2011 Constant Prices 2011 GDP IAG, AF-KL, LH Group weekly frequencies
France
Italy
Spain
IAG
Stronger intra-Europe profitability
Grow Share of Europe to-Africa routes Stronger Europe-toAsia position in critical markets
West Coast
Canada
ORD
East Coast JFK
LHR
MAD
Europe Asia
AMM DEL HKG TYO
LAX
DFW
MIA
Central America & Caribbean M. East & South Asia South America
KUL SIN
SCL
Africa
Heathrow - Madrid Europe North America Europe Latin America Europe Central Asia & Pacific Europe Africa, M.East & South Asia Latin America Asia Pacific North America Africa, M.East & South Asia Latin America Asia Pacific flow under consideration Latin America M.East & South Asia flow under consideration IAG / oneworld hubs
Australia
SYD
40%
Domestic
Short Haul
UK/Spain
Long Haul
RoE RoW
Domestic UK/Spain
0.0%
Short Haul
0.9%
Long Haul
-2.0%
TOTAL
-1.9%
RoE
RoW
-1.0%
-0.7%
0.9%
0.5%
1.0%
-0.2%
1.1%
1.4%
External
Schedule Optimization
2010
Q4
Q1
Q2
2011
Q3
Q4
Internal
AA/BA/IB teams working together to optimise a complex seven-hub system and maximise customer benefits
Before the JB and IAG, for a citypair BA effectively had one price in a cabin on offer eg LHR LAX
AA Metal
AA 001 paper
BA*code
Premium
+0.9pts to 25.8%
+0.1 pts to 19.5%
+0.1pt
Non Premium
-0.1pt
Embed joint agency dealing and drive the corporate dealing pipeline
Drive a seamless transfer experience for our customers across our 7 hubs Harmonise our tri-lateral data and management information Greater integration of our commercial processes Deepen secondment program across the business to share talent
IAG Cargo
One Strategy
Greater capacity
Eastbound feed
North America
Europe
Latin America
Spain & UK
Africa
115
Exposure to Asia
Asia
RoW
IAG
AF-KLM
LH
Avios
To be the global leaders in travel rewards To create a new scalable currency and platform for multiple airlines
One multinational loyalty rewards currency available to British Airways, Iberia and future IAG owned airlines for frequent and non-frequent flyers
Ubiquitous reward currency Retain separate frequent flyer loyalty brands Marketing efficiencies Improved customer intelligence Relationship management Loyalty scheme brand equity
mobility
128
Heathrow punctuality
100%
30%
Nov 06
Oct 11
Heathrow baggage
MPE
Recommend BA +5pts
Not just T5
iPad is a huge improvement for entertainment; video better than the system in the upgraded 777 First - keep it as an offering. First, London Heathrow Philadelphia
Most satisfied with punctuality and discerned debarkation for business class passengers. It should be always like this. Club Europe, Barcelona - London
Awards
Telegraph Ultra Awards May 2011 Best First Best Business Class Conde Nast Traveller August 2011 Best Business Class Favourite leisure airline Shorthaul Conde Nast Traveller September 2011 Best Airline worldwide Best Longhaul airline
2008
2009
2010
2011*
Economic challenges
Asset turn
Structural change
pence
2008
2009
2010
2011
Other costs
pence
2008
2009
2010
2011
2008
2009
2010
2011
2008
2009
2010
2011
1.6
1.5
1.4
pence
1.3 1.2
1.1
1.0
2008
2011
NAPS
APS
2023
2025
6 r-0 Ma
r-11 Ma
Risk Seeking
Liability Matching
6 r-0 'Ma
Buy in
'Ma
r-11
NAPS Deficit
APS Deficit
Future Service
2026
2017
2026
Convenience
Seeking simplicity and speed in response
Individualism
Greater levels of personalisation
Customer Trends
Connectivity
Experiential
Putting the customer at the heart of our business creating a distinctive brand promise
British Style
Understated, quality, contemporary
Thoughtful Service
Professional, intuitive, intelligent, experience
Product
Service
Technology
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure
Gatwick Zone A
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
At the airport
Onboard
On arrival
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
iPad
Brand engagement
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
Re-ignite passion in the brand Engage our colleagues Engage our customer
Olympic opportunity
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure Invest selectively in the product Create the culture and capabilities for success Win through outstanding service and customer insight Re-ignite passion and belief in the BA brand Set the standard for responsible aviation
Achieve a competitive cost base Grow revenue through airline partnerships and commercial innovation Secure the right aircraft, technology and infrastructure
Win through outstanding service for all and special recognition of our most valuable customers - Colleague Empowerment - Single Customer View Grow revenue with our airline partners - Joint Business Agreement - ba.com and Mobile innovation Secure the right technology, fleet and infrastructure - New Aircraft (777/787/380) - New Technologies Set the standard for responsible aviation - One Destination - Biofuel
The most admired and advocated airline acros s the worlds key cities
Renewal Underway
Rafael Snchez-Lozano Chief Executive Officer, Iberia
Overview
Iberia faces several challenges:
Short & Medium Haul Network
Madrid HUB
Service levels
and quality
Non competitive
costs vs. low cost carriers
Punctuality
Overview
Our strategy to deal with these challenges
Long Haul Network
Madrid HUB
Short & Medium Haul Network Transforming the short & medium haul model
The target in 2015 is to be a profitable and renewed Iberia, leader in its markets
Asturias
Bilbao Len
Pamplona Logroo
Vigo
Valladolid
Barcelona
Mahn
MADRID
Palma de Mallorca Ibiza Murcia Sevilla
Valencia
Badajoz
Alicante
Granada Almera
Mlaga
Jerez
Gran Canaria
28 20
-30%
2007
2011
2007
2011
Maintenance cost/ASK
-52%
Total costs/ASK*
-14%
* Including cost of capital
MAD
CCS FOR
REC LAD
GIG
JNB
A330-200 @ 242 pax A330-300 @ 278 pax A340-600(IB) @ 342pax A340-300 (IB) @ 254 pax
SCL
BUE
MVD
35
33
35
38
40
5 17
10 17
16 17 7
2015
17
16
2012
17
18
2011
50 45 40 35 30
13
2013
11
2014
Minimum fleet
25
2011
2012
2013
2014
2015
More seats in
A340-600: 42 to 46
Customer experience
NCP +0,8*
Asset turn ++ ++ + ++ ++ ++ +
Margin ++ + ++ +++ ++ + +
60% reduction of current recurring location costs (rent, maintenance, consumption): savings of 13m a year
Ready to move at the end of 2014
ABANDONED LOCATIONS
TERMINAL 4 SATELLITE
Spain-Europe Madrid-Europe
30% 25%
40%
31%
30% 20%
12%
19%
Domestic
15%
Madrid-Domestic
9%
12% 9% 5% 1%
10%
3%
3%
2015
Santiago
2016 Oviedo
Gijn
Bilbao
Reinosa
2016
S. Sebastian
Vigo
Huesca Gerona
Madrid
Teruel
Barcelona
Valencia
Badajoz Albacete
Alicante 2012
Malaga
Fuengirola
Almera
4.2M
P2P (30%)
2.9M
Other Russia Turkey Austria Greece Netherlands
80%
60%
40%
Israel England
Italy France Spain
20%
0%
Long-haul total
Connecting in MAD*
* Split origin/destinations connecting at Madrid hub, database 2010 Note: Includes Air Nostrum; Medium-haul includes flights to Europe, Northern Africa and Middle East; Domestic includes Canary Islands
New airline 100% owned by Iberia Managed independently from Iberia, strong governance Independent operational planning, but coordinated with
Iberia
Distribution through own website Distribution in other channels through IB code All Iberia Express flights in code-share with Iberia Revenue management coordinated with Iberia Independent image and branding but close to Iberias
Single-fleet of A320s
40
35 30
25
20 15 28 13 2012 16
40
10
5 0
2013
2014
2015
25% of handling services and other operational areas to come from the adaptation
25% of savings to come from savings in overheads and general costs 5% to come from increased asset turn
- Vueling in Madrid will continue to be a valuable partner in helping us improve our short haul competitiveness
Cross initiatives
Cultural renovation
1
Strengthening the leadership position long haul Improving quality and customer service
2
Ensuring a viable operating model in short and medium haul
3
Promoting the Cargo business
Summary
Industrial relations
There are 3 collective bargaining groups in Iberia:
Ground staff
Signed on April 2010, valid until December 2012 Applies to all ground staff, including corporate, commercial, maintenance, ground handling*, IT, etc. 16,400 employees
Cabin crew
Signed on December 2010, valid until December 2012 4,000 employees
Pilots
Signed on April 2009 with SEPLA (Pilots Union), expired on 31 December 2009 (Legal automatic extension) In negotiation since November 2009 1,600 employees
Summary
3 leverages, in addition to synergies, to generate value: - Interim fleet and new long haul product - Madrid hub project, facilitator of - Iberia Express, saving
>100M >100M >100M
By 2015, Iberia will be a profitable and renewed airline, leader in its markets
Profitability
Renewal
Leadership
211
212