airBaltic - Sorainen

airBaltic
the leading airline in the Baltic’s
September, 2010
Bertolt Flick
Contents
• airBaltic Story
• Baltic Markets
• Our present and future
2
Contents
• airBaltic Story
• Baltic Markets
• Our present and future
3
airBaltic in a nutshell
• airBaltic was established as a commercial airline
to service flights to and from Baltic’s
• airBaltic Corporation was founded in 1995.
–
–
–
–
–
Initial shareholders SAS, IO fund, Swedfund, BI USA
1998 SAS buys out BI USA;
1999 Transaero becomes a minority shareholder;
2003 SAS buys out IO fund and Swedfund;
Current (as of Jan 29, 2009): state of Latvia (52.6%),
SIA Baltijas aviācijas sistēmas (47.2%), Transaero
(0.2%);
• Serves 80 international routes from Riga
(Latvia), Vilnius (Lithuania) and Tallinn (Estonia)
– Fleet consists of 32 aircraft
– 1400 employees
4
Direct flights from Riga airport in 1990
5
Direct flights from Riga airport in 2002
6
Direct flights from Riga airport in 2010
7
The passenger growth in Riga airport has
been significant
Number of passengers in Riga airport
4 877
5000
Number of passengers ('000)
4 067
4000
3 691
3 161
3000
2495
2200
1878
1828
2000
1060
1000
309
310
1992
1993
392
491
497
531
555
562
574
623
633
1995
1996
1997
1998
1999
2000
2001
2002
712
0
1990
1991
1994
8
2003
2004
2005
2006
2007
2008
2009
2010
Number of destinations S2010
Destinations S2010
100,00
90,00
80,00
77
72
70
70,00
60,00
50,00
46
40,00
airBaltic (Riga)
Finnair (Helsinki)
Norw egian (Oslo)
9
SAS (Stokholm)
Contents
• airBaltic Story
• Baltic Market
• Our present and future
10
Riga airport has twice as many passengers
as Vilnius and Tallinn combined
Passenger development in the Baltic capital airports
Num ber of passengers (mln)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2001
2002
2003
2004
2005
LV
11
LT
2006
EE
2007
2008
2009
Riga has natural gravity
Total air transport market for 2009 in Estonia
was 1.4 million passengers
Total number of destinations served from
TLL (Tallinn International Airport) was 30
airBaltic market share in air traffic was 13%
(TLL apt)
Riga had 4.0 million air passengers in 2009
Total number of destinations served from
RIX (Riga International Airport) was 80
airBaltic market share of traffic is 65 %
Total air transport market for 2009 in Lithuania
was 1.3 million passengers
Total number of destinations served from
VNO (Vilnius International Airport) was 22
airBaltic market share in air traffic is 26 %
Traffic to CIS countries has increased
• Passenger volumes to CIS from Riga airport have increased 8
times since 2003. airBaltic is the driver behind the development
500 000
450 000
400 000
No. of passengers
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
2001
2002
2003
2004
2005
Tallinn
2006
Vilnius
2007
2008
2009
Riga
Destinations from RIX (2009): ALA, GYD, EVN, KBP, KGD, KIV, LED, MOW, MSQ, ODS, SIP, TAS, DYU,
PKV, TBS
13
2010 (est)
Riga has over three times more destinations
to CIS compared to other Baltic Sea hubs
Number of destinations to CIS countries, 2009
16
14
12
10
8
6
4
2
0
RIX
VNO
TLL
ARN
HEL
TXL
ARN – Stockholm-Arlanda Airport
HEL – Helsinki-Vantaa Airport
TXL – Berlin-Tegel International Airport
WAW – Warsaw Frederic Chopin Airport
14
WAW
Passengers by CEE carriers per population
Number of Passengers per Population, 2009
1,40
1,22
1,20
1,00
0,80
0,52
0,60
0,53
0,33
0,40
0,20
0,11
0,00
airBaltic
CSA
Estonian
15
Malev
LOT
RIX market is growing despite economy
slowdown
GDP growth rate and airBaltic passenger growth rate in Latvia
(% change on previous year)
60
52.6
50
38.4
40
32.2
30
32.2
27.0
25.1
19.0
20
15.0
9.7
5.0
10
0
45.4
44.8
3.3
6.9
8
6.5
7.2
8.7
12.2
10.6
10
-4
-4.6
-10
-18
-20
-30
1999
2000
2001
2002
2003
GDP growth
2004
2005
2006
airBaltic RIX growth
16
2007
2008
2009
2010
Airline routes can be managed in two ways
17
Development of a transfer-hub transforms
the risk-profile
• Network model allows more products
• Enables capacity to be allocated
where demand (or yield) is the highest
• Minimises dependence on individual
markets, economies, currencies
• It needs
– Critical mass
– Attractive pricing
– A strong and reliable brand
Number of
Routes
Maximum number of
markets served
Point to
Point
Transfer
Hub
2
4
6
3
6
12
4
8
20
5
10
30
6
12
42
7
14
56
8
16
72
9
18
90
10
20
110
40
420
160
6,480
– Strong operational capability
….
– Efficient hub
20
….
18
80
airBaltic network model enjoys unique
advantages
• Strategic location on northern and eastern edge of Europe
–
–
–
geographically efficient connections for significant markets
open access to markets in the EU
favourable access to regulated markets in Russia and its former territories
• Weak competition in neighbouring regions
–
flyLAL went bankrupt in January 2009, Estonian struggling to survive
• RIX can deliver 25-minute International-International connection times
–
amongst the shortest in the world
• Strong management focus on developing the transfer model
19
Contents
• airBaltic Story
• Baltic Market
• Our future
20
airBaltic wants to become dominant in the
Baltics and use Riga as the hub
• airBaltic plans to strengthen its dominant position in the
Baltics and Riga’s role as a major transportation hub in
the Nordic region:
– RIX as Northern hub
– VNO and TLL as feeder traffic and core network (up to 5
destinations on profitability basis, e.g. CPH, STO) keeper
• Introducing low risk flights to Kaunas, Tartu and
Palanga help us to fragment the traffic
• Estonian Air’s strategy of being boutique airline will help
us capture more share
21
Fastest route between East and West with quickest
guaranteed connection time
22
Thank you!