Addressing the CAPA Conference at Powerscourt Hotel, Co Wicklow, last week, Bobby Healy, Chief Technical Officer, CarTrawler, addressed the subject ‘Google Flight Search and Why It’s Bad for Airlines’, and told the airline leaders in the audience: “Wait until you are paying US$50 to Google per online booking!”
The conference adopted an interesting form of panel debates and ‘boardroom sessions’ that discussed three main topics: disruption in the airline industry, the existing ownership and effective control rules, and big data analytics and how the power of major data companies is challenging airlines.
Peter Harbison, Executive Chairman, CAPA – Centre for Aviation, introduced the subject by listing ‘four phases’ of disruption in the airline industry: 6th Freedom operations, the Gulf carriers, the impact of low-cost carriers, and – the next phase – the rise of China, partnerships and big data analytics.
He compared the market capitalisations of the big data companies – Amazon $454bn, Facebook $433bn, Google $648bn, Priceline (Booking.com) $90bn, Uber $70bn (estimated), and Airbnb $35bn (estimated) – with those of the biggest airlines – Delta $37bn, United $24bn, IAG $13bn, Qantas $9bn, Lufthansa $8bn, and Ryanair £16bn.
“At board meetings we need to regularly remind non-airline people of the existence of ownership and effective control rules that often prevent us from doing things.” – Willie Walsh, IAG
“With regard to ‘ownership’ of the traveller, third-party data analystics are about to crash the party.” – Peter Harbison, CAPA
“Hotels, telecoms and taxi companies are being ‘disintermediated’ – taxis are heavily regulated but they are being ‘Uber-ed’. – Peter Harbison, CAPA
“The ownership and effective control rules as existing are increasingly irrelevant – many countries now accept up to 49% foreign ownership and some, including India, accept 100% foreign ownership.” – Rigas Doganis, European Aviation Club
“Ownership and control rules will be different, but will remain – Governments need O+C provisions in order to negotiate – and the disruptions will come from elsewhere, not from O+C rules.” – Ulrich Schulte-Strathaus, Aviation Strategy & Concepts
“Transport policy is the last bastion that sovereign Governments will give up.” – Ulrich Schulte-Strathaus, Aviation Strategy & Concepts
“Eventually common sense will prevail and there will be a chipping away of the ownership and control rules.” – Barry Humphreys, BKH Aviation
“There is no pressure from the investment industry to remove the ownership and control rules.” – Albert Muntane Casanova, DVB Bank
“Low-cost carriers gained huge advantage by adopting API distribution almost from the start – but the legacy carriers are fighting back. Airlines need to work collaboratively with all players, particularly travel agents.” – Ian Heywood, Travelport
“The cloud is probably the biggest opportunity that airlines have not moved to take advantage of.” – Paul Pessutti, SAP
“When you get a supportive airline regulator isn’t it amazing what can happen!” – Peter Bellew