The 14th Air Transport Research Society Conference (ATRS) was held from 7 to 9 July in Porto. The scientific knowledge exchange attracted almost 400 people from all over the world, both from universities and business.

Conference started with plenary session on small and medium European airlines’ strategies facing new facts as mergers, alliances and post crisis structural changes with the role of network.

Antonio Meneses, President of the Management Board of SATA was talking about the network strategy of the SATA Airline. Even though the airline has been flying almost 70 years between Portugal and Azores, it has just opened new routes to reach economies of scale and scope. They operate only 14 aircrafts (including 4 wide-body) therefore decision which markets to serve is strategic one. He described SATA network as a source of brand identity and a potential hedge against economic cycles. The airline started code-sharing in order to access particular markets, increase the number of frequencies, improve the GDS display positions of connecting services, contain costs and avoid launching new routes that cater only to price-sensitive leisure passengers, with low-yields, directional and seasonal traffic.

Krzysztof Ziebinski Director, Strategic Partnerships, Alliances and Regulatory Affairs at LOT reminded that the airline industry in Europe is still going through a serious period of crisis and continues to see drops in revenue and passenger traffic. In 2009 European market has seen larger drops than the worldwide average, additionally significant increases in the price of oil has been noticed: 41% between May 2009 and May 2010. In the first half of 2010 Europe remained in recession as one of the last regions, however the first signs of improvement were seen. However weather events and hikes in fuel prices were the new threats for the industry. After very difficult period LOT is going through restructuring program, where the key areas are assets and debts. It resulted in lowering the number of company employees by 440 people, minimization of costs achieved by fleet replacement, renegotiation of contracts together with product and sales costs optimization. The expected savings by the end of 2010 are 150 million PLN (approx. 40 million Euro). In the same time company expand route network and actively develops cargo operations. Among challenges for 2010 are capacity utilization, reduction of unit operation cost and implementation of modern IT systems.

Manoel Torres TAP Executive introduced TAP strategy which bases on four pillars, those are:

a)      cost reduction program to improve productivity,

b)      network re-design to explore advantages of Portugal geographical position, amplify the catchment area, implement a hub in Lisbon to “niche destinations” and build-up a secondary hub in Porto,

c)       product improvement both on board and ground, and

d)      leverage sales where Portugal is the gateway to Europe.

He said that TAP is looking for a continuous innovation through market segmentation (proposes five ways to travel), new Premium product (like exclusive ATO, check-in, security fast track and lounges), reshape of on board service, new customer relation internet platform, mobile facilities and social media. He pointed out that the company goes through cost reduction projects with expected three years savings reaching 148 million Euro. In the same time fuel conservation project gives positive outcome with total fuel savings of 20.000 tons in 2009 and CO2 emissions reduced by 63.000 tons. The TAP Executive showed some threats on the market including increasing competition from Low Cost Carriers, industry consolidation and changing costs that are not under the airline’s direct control (e.g. fuel, airport and ATM charges, exchange rates).

Summarizing the airlines presentations Dr Kostas Iatrou, Secretary General, Hellenic Aviation Society and Managing Director, Air Transport News explained the small and medium European airlines’ strategies facing new facts as mergers, alliances and post crisis structural changes. He gave an overview how the market developed during the years, further explained the development of partnerships starting with interlines and code sharing in the 70’ and 80’, antitrust immunities in 90’ and global alliances that dominated the air transport industry in the 21st century. Nowadays we can see cross-border mergers, but he asked a question one step ahead - what will be next. Kostas pointed out that benefits and market power accrue from large networks and geographical spread therefore the horizontal partnerships are becoming essential. He underlined that the growth through partnerships increase the opportunity to operate in more markets and allows the airlines to benefit from economies of scale and scope. Dr Iatrou indicated results of survey that shows rationale behind airline alliance formation which according to the relevance are: increased coverage, cost savings, competitiveness/market share and increased traffic/revenue.

An Airport Benchmarking Project and Excellence Award Session took place. Prof. Tae H. Oum presented Key Results of the 2010 ATRS Global Airport Performance Benchmarking Project. The project research was focused on three areas: productivity and operating/management efficiency, unit cost competitiveness and comparison of airport charge levels. There were 142 airports included in the study from North America, Europe, Asia, Australia and New Zealand. After benchmarking results presentation the following airports have been awarded with Efficiency Excellence Award in different categories:

a)      Oslo International Airport won “European Airport Efficiency Excellence Award”,

b)      Geneva International Airport was awarded with  “European Small-Medium Airport Efficiency Excellence Award”,

c)       Hong Kong International Airport won “Asia-Pacific Airport Efficiency Excellence Award”,

d)      Seoul-Gimpo International Airport was nominated with  “Asia-Pacific Small-Medium Airport Efficiency Excellence Award”, and

e)      Hartsfield-Jackson Atlanta International Airport won “Global and North American Efficiency Excellence Award”.

During the next two days people from both universities and industry were presenting their research papers on wide aviation related topics, mainly:

Airport and airline economics, airport planning, forecasting, safety and security, human factors, strategic management, airline operations, cargo, airline marketing, air service liberalization, ownership and privatization, merger and alliance, network and competition, air transport policy and law, environment, high speed rail, tourism, ATM and aircraft technology.