Airlines & Airports

Issues currently affecting the Airlines and Airports sector include:

Surviving the downturn

Aviation businesses need to take decisive steps to understand the downturn and what it means for their future survival. For an airline, this requires a detailed understanding of the potential impact of changes in consumer demand and how this, combined with increasing fuel and other costs, impacts its ability to meet the expectations of a diverse range of stakeholders such as shareholders, regulators, lessors and lenders. Skilful planning can make the most of the opportunities available, enabling the best prepared businesses to succeed through the bad times and emerge re-energised and fit for the future.

Economical and ethical

The importance of Sustainability to both businesses and individuals continues to rise, with particular concern around the impacts of global climate change. Following much discussion, the airline industry is likely to face formal regulation of emissions from 2012 under the framework of the EU Emissions Trading Scheme (EU-ETS).

This will create challenges and opportunities for both ongoing operations and strategic planning. Furthermore, positioning an airline as a business that is socially responsible, but at the same time economical, will be an important factor in maintaining customer relationships in the future.
Sustainability and Climate Change
Geoff Lane
+44 (0)20 7213 4378

A flight to quality

The Open Skies agreement and the introduction of new entrants to the market mean airlines will need to reassess how they can maximise the flying experience at every point of contact with their customers. Optimising the ticketing, transit service, communications and in-flight experience and ensuring that there is brand consistency across channels is now expected as standard by an increasingly discerning customer base. In this age of price equality it is the consistent points of difference, delivered with passion and real consumer insight, which will drive volume and loyalty.
Performance Improvement Consulting
Steve Sinclair
+44 (0)20 7804 1306

Fleet financing

The method by which an airline finances its aircraft is one of the most important long-term financial decisions it will take. Balancing commercial, cash management and accounting objectives with the aim of minimising the after-tax cost of using the aircraft requires a detailed knowledge of tax, accounting and finance. In particular, ensuring that the benefit of capital allowances and other legitimate tax benefits associated with aircraft are realised and enjoyed by airlines is key in minimising the cost of aircraft.
Tax
Paul Nash
+44 (0)20 7804 4040

CAA - Cutting through the red tape

Irrespective of the current strategy for a business; from start up to acquisition, or re-financing of existing operations, there are regulatory requirements governing both the ownership and control of an airline and its financial resources requirements. The Civil Aviation Authority (CAA) monitors these requirements as part of the terms of the Operating Licence they issue. Working with an adviser that understands these requirements, and the regulator's likely approach, is critical to the successful implementation of strategy.
Regulatory
Caroline Rifkind
+44 (0)1293 566 636

Opening the skies - player or spectator

The introduction of the first phase of the open skies agreement has led to airlines focusing on both yield management and route planning as well as an increased demand for prime landing slots. This demand for slots and opportunity for increased market share is likely to drive consolidation in the sector during 2009, both within the UK and cross-border.
Airline M&A
Guy Gillon
+44 (0)20 7213 5164

Dollars, Euros or Sterling?

Running an airline is a multi currency activity. Whether buying or leasing an aircraft, buying fuel in dollars or selling tickets and paying the wages in Euros; planning to avoid the pitfalls of the foreign exchange markets is a key function for any airline. Fuel hedges, currency swaps and interest rate caps or collars combined with good forward planning are all essential to maximising value from operations
Treasury
Yann Umbricht
+44 (0)20 7804 2476

Please click here to download a pdf of these issues.