Case Study - Airline Growth Strategy

Client Situation

Our Client, a publicly listed company operating in the Australian travel industry, has a wholesale ticketing business which has been under threat from:

1. Airlines cutting distribution costs and going direct to customers;
2. Consolidation amongst branded agent groups who are developing in-house ticketing centres; and
3. A loss of share from independent agents, a key customer group.

Pacific Strategy were asked to develop a five year strategy to combat these threats with specific analysis focusing on a number of initiatives already underway as well as new initiatives.

Approach

• We developed a market forecast for the Australian international air travel market and used this to understand the impact of various market changes on revenue and profit
• This enabled the CEO and Board to understand the value of the business under a variety of market scenarios, including the potential for M&A.
• In addition, we developed or reviewed a number of operational improvement projects that could deliver profit improvements.
• The overall strategy was approved by the Board and had a high level of buy-in from the management team.

Impact

Within 12 months of our strategic review, our Client and its possible M&A targets were rolled up into a consortium, which has subsequently sold a majority share to private equity firm.

Read more about our work in the Travel and Transport Industry: Featured Thinking - Is the Australian Travel Industry Ready for China?

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