Strategic Planning in the Airline Industry

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Airline Planning
Strategic Planning
in the Airline Industry
a two-day Seminar

The Challenge

Rapid and intense change in today’s business climate reshapes the fundamental approach to strategic decision-making. New thinking for ways to face the two vital strategy issues – where will the airline be in the future and how to get there – must emerge so that a modern air carrier can leverage its strength and capitalize on opportunities. Creating innovative strategies for the new business paradigm marks a proactive approach to the challenges in the volatile, yet exciting, airline business. Airlines that embrace a dynamic outlook for strategic planning are positioned favorably to prosper financially and operationally in face of uncertainties and complexities in this business. The strategic plan and its components influence every aspect of running a commercial air carrier. As such, it is critical to devise effective strategies and execute them efficiently. Organizational units depend on clear understanding of the strategic issues so that they can plan accordingly and carry out the responsibilities created by the strategic plan. Strategic planning brings about an opportunity to examine carefully ways that the airline is conducting its business, and finding new methods to do a better job. Designing and delivering the airline’s services in today’s demanding marketplace requires sophisticated coordination between business units of the airline. Strategic planning serves as a mechanism to create a framework for integrating various contributions to deliver the airline’s offerings. Strategy-based planning addresses both the resource allocation and organization structural issues. Developing a business model for the airline based on a strategic analysis of opportunities and requirements form a platform for planning resources going forward. It also responds to: • • • limitations in utilizing resources uncertainties of the future dynamics of the airline business

Business Requirements

Strategic Management

Strategic management is a disciplined yet adaptive endeavor to chart the future of the airline and align the activities of all business units in that direction. This attempt must be flexible, not rigid, so that the roadmap that it creates can be applied in building sensible operating and tactical plans that can incorporate new realities as the future unfolds. The strategy-savvy airlines reap the rewards of performing better while avoiding the detrimental effects of unstructured, undisciplined response to strategic challenges. Over time, only the airlines will survive that can master designing an advanced yet pragmatic strategic planning process. Such a process must encompass all significant considerations for constructing a blueprint of actions and allocating resources for properly executing those actions.

CA Advisors
1250 Aviation Avenue Suite 200M San Jose, California 95110 USA Tel: 408-295-7730 Fax: 408-280-5700 www.ca-advisors.com Gesellschaft fuer Markt und Strategieberatung Sonnenberger Strasse 52 65193 Wiesbaden GERMANY Tel: 0611-37577-39 Fax: 0611-37577-40 www.gms-beratung.com

What is the airline trying to achieve?

How is the airline going to achieve it?

Objectives

Strategy

Strategic Analyses
Structure
How will the airline organize its resources?

Business Model

Policies
What are the operating rules and boundaries?

Strategy-based Planning Structured Approach to Strategic Planning

Seminar agenda…
Day One
• Introduction
- strategic management perspective - structured approach to strategic planning

Day Two
• Planning Optimization
- allocating resources - developing prioritization



Airline Business
- unique features - models and economics



Financial Planning
- investment analysis - financing methods



Strategy Development
- practical considerations - innovative approaches



Asset Valuation
- Real Options methodology - managing uncertainties

•...
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