Low Cost Expirary Date

[Guest longtimer]

Note comment about WestJet.
Quarterly Report on the Business Model Life Cycles of Commercial Airlines

MONTREAL and SINGAPORE, July 24, 2014 /CNW Telbec/ - Millennium Aviation, Inc. has released its new quarterly report on the health and life cycles of airline business models, including an expiry index.

In its new report, Millennium Aviation provides a ranking of top low-cost and hybrid airlines in terms of how well they maintain or improve their business model. Airlines are not ranked in terms of a snapshot of their current profitability as reported in one quarter or fiscal year, but in terms of 45 specific underlying trends in their business model measured over 5 years. It shows whether the model is in good health and can continue to generate profits and retain its customers.

"Many CEOs and executive managers we have worked with still use balanced scorecards. A deeper look under the hood can reveal many blind spots that show the current business model is sliding towards sunset", says Ricardo V. Pilon, CEO of Millennium Aviation. "An example is whether average fares per customer, ancillary revenues and overall profitability per customer have a positive trend against passenger volume growth. Other examples are how cash flow from new revenue sources increases variable or fixed costs, or are upsetting loyal customers and undermining repeat business, such as selling lounge access to non-frequent fliers", he specifies. "Other examples are the disproportionate amount of fees and charges on redemption tickets, which also costs more and more points."

Mr. Pilon adds: "We increasingly see multiple models within the main business model. It often creates conflict, confusion, delivery problems, customer retention issues and profit leakage."

"Take for instance, WestJet. In absolute terms, it is still a profitable carrier. However, there are a number of factors that when combined tell us that the model is leaking. The case of Southwest is stronger and this explains why it is forced to explore other markets and take more risks by deviating from its traditional model. The worst case in the Top 15 is Air Berlin; it scores 0.76 which is far below the threshold of 1.0 (the ranking and explanation is provided separately)".

Millennium Aviation, Inc. is a boutique coaching firm specialized in business model transformation methodologies, profitability enhancement and business model transition management in commercial aviation. The firm was founded in 1995 and has served 216 customers. Millennium Aviation is based in Canada, and offers world-wide service out of Montreal, Amsterdam and Singapore with a team of Senior Associates and three strategic partners.
http://www.newswire.ca/en/story/1390940/do-low-cost-and-hybrid-carrier-models-have-an-expiry-date

[Thebean]

What a load of nonsense. Using this guys logic, Apple should have stuck with the IMac and never changed.

Someone remind me to send this guy a few of the analyst reports on their 2nd ranked pick, NAS, when they next come out. Woof woof.

Perhaps he should have his Cranfield branch do an assessment as to how many

" airlines within an airline " have ever made it beyond 5 years?

I've never heard of these guys, (guy?), before, and after 20 years, one way or another, I've run across most of them. To be based in Canada and not having heard of him makes me even more skeptical.

That tells me all I needs to know and how much credence I'd place on anything on any subject matter that comes from this source.

I have a number of friends who are ivory tower guys, but I would rarely base any real world business decisions on their various pronouncements. I'd be even less interested in someone who's greatest claim to fame appears to be the launch of Roots, who, if I recall correctly, blew thru about $40m of paid in capital in less than 6 weeks before shutting down.

I suppose anyone could hire someone to create a fancy web page long on rhetoric but very short on detail, and then go through the Rolodex to pick out the current city of residence of everyone he's ever met in the business so It looks like they have world wide reach, and then issue a press release hoping someone will pay attention to them in order to generate some business, but what's the point if he's as successful and in as high demand as he purports to be?