© 2009 Sabre Inc. All rights reserved. wearelistening@sabre.com

OCTOBER 2003A MAGAZINE FOR AIRLINE EXECUTIVES

T a k i n g y o u r a i r l i n e t o n e w h e i g h t s

I N S I D E

Traditional carriers launchlow-fare subsidiaries

How airlines weathered"the perfect storm"

Cathay Pacific Airways’ crisis management process

E X T R E M E A I R L I N E M A N A G E M E N T

A conversation with …

DavidSiegel,CEO, US Airways

company

ascend74

It’s no secret that the airline industry

is experiencing pressures due to the

difficult economic environment and the

resulting changes in consumer behavior

and attitude toward travel. Although

airlines around the world are acutely

aware of the need to lower costs and

increase revenue, United Airlines is

particularly focused on improving its

bottom line by using advanced tech-

nology to achieve its goals.

A component of its successful strat-

egy has been to utilize a variety of Sabre

Travel Network products to effectively

manage ticket distribution and other

operating costs as well as capitalize on

revenue-generat-

ing opportunities.

Turnkey solutions

contributing to

this strategy

include the Sabre ® Direct Connect

Availability SM —Three-Year Option, mar-

keting information data tapes from the

Sabre ® Global Distribution System and

Sabre® Aggregate Ticket Control Number.

United aggressively distributes

tickets and targets sales through chan-

nels that produce the highest revenue.

Participating in the Direct Connect

Availability option enables United to offer

its customers access to all published

fares, including Web fares, through the

travel agency channel. The Direct Connect

Availability option also helps United gain

market share in routes where there is

heavy competition and sensitivity to

price. This approach increases its sales

opportunities and reduces the time it

takes for travel agents and consumers

to shop for and purchase United’s best

deals. The three-year option also reduces

United’s cost of ticket distribution by

providing it with a fixed, discounted

fee for the next three years. Through

the program, United receives discounted

booking fees in exchange for participat-

ing at the highest level in the Global

Distribution System and providing

access to its full fares and content.

At the highest connectivity level, United

is provided with a wide range of services

to market and sell flight and fare infor-

mation to approximately 56,000 Sabre

Connected SM travel agents around

the world.

United’s use of MIDT is another

effective tool that sharpens its competi-

tive edge, maximizes market potential,

develops meaningful sales incentive

plans and improves overall operations.

MIDT provides United with vital sales

intelligence including sales sources and

its position in the marketplace relative

to the competition. This tool provides

key transaction data enabling United to

analyze booking levels and competitive

market share.

Utilizing the latest innovation from

Sabre Travel Network, Aggregate TCN,

United now has insight to the full spec-

trum of fares and the prices consumers

are willing to pay for any given itinerary.

Aggregate TCN is the only source for

company

october 2003 75

The Winning Combinationalready cancelled. Based on centralized

planning and decision making, while

leveraging the benefits of local, decen-

tralized action, the integrated recovery

method brings together the best of both

worlds. In effect, decisions made at the

airport would be driven by the central-

ized airline operations control center

such that a global approach is taken

to re-accommodate passengers.

The Tools for the Job

The Sabre Airline Solutions product

development teams in conjunction with

the research group have been working

closely together to develop the fully

integrated schedule recovery system.

As a precursor to the final integrated

recovery product, decision-support

functionality has been incorporated into

several products, including the Sabre ®

AirOps™ Control suite, the Sabre ®

Flight Control suite for small- , medium-

sized and low-cost airlines and the Sabre ®

AirCrews™ crew management system.

The AirOps and Flight Control suites

include a real-time flight operations

management and movement control

system designed to monitor an airline’s

operations and provide alerts for potential

maintenance and operating constraint

violations. The AirCrews system includes

a day-of-operations module designed to

assist crew trackers with managing the

impact of schedule changes and disrup-

tions on crew scheduling. Sabre Airline

Solutions has introduced the Sabre ®

AirOps™ Decision Manager — a decision-

support tool that incorporates the sched-

ule recovery, aircraft recovery and pas-

senger flow models. The system helps

airlines find new aircraft assignments

that have the least impact on the current

schedule and are maintenance feasible.

It is available as a supplemental product

for Sabre ® AirOps™ Movement Manager

as well as the Sabre ® FliteTrac system

and can be seamlessly integrated with

both the AirOps suite and the Flight

Control suite.

The Sabre ® AirOps™

Reaccommodation Manager optimally

re-assigns passengers whose flights

have been disrupted. The system

values each passenger according to

user-defined criteria such as frequent

flyer status, fare paid or class of travel,

prioritizing the passenger list based on

calculated values to create alternative

itineraries. The system’s automated

alert process notifies passengers of

their new itinerary. Because the system

simplifies the process of moving

misplaced passengers and minimizes

schedule changes, customer service

and loyalty is enhanced. And automat-

ing the re-accommodation process

also reduces costs. At the core of

Sabre Airline Solutions’ suite of pas-

senger re-accommodation tools is the

Passenger Reservation System. The

system provides the necessary flexibility

to accommodate passengers by flight

leg or origin and destination. This

enables airlines to take the passenger’s

entire itinerary into consideration

when selecting alternative flights for

re-accommodation. The automated

process is entirely table-driven and

user-defined, taking into consideration

variables such as booking class (high-

versus low-yield), down-line connections,

passenger profile (unaccompanied

minors), frequent-flyer-tier level,

ticketing status, boarding pass status

or others depending on the airline’s

preference.

Pushing Technology Forward

Most technology solutions in sched-

ule recovery focus mainly on optimizing

the disrupted schedule by minimizing

operational disruption. Although helpful,

this approach seldom considers the

commercial variables in formulating

the optimized solution. An optimized

solution considers factors such as

passenger mix (high- versus low-yield

passengers) on re-directed flights,

degree of competition on the route

(passengers’ choice of airlines) and

route and flight profitability. As these

new scheduling concepts are embraced

by decision-support vendors and sub-

sequently airlines, they will improve

the existing business processes and

practices. Schedule disruptions cannot

be eliminated, but they can be optimally

managed. As researchers continue

to push technology, airlines will have

more sophisticated tools to minimize

the effects — and costs — associated

with irregular operations. The future

mission of the airline operations

research community will be to deliver

next-generation scheduling and plan-

ning tools that meet the prevailing

needs of the industry and offer further

opportunities for improved efficiencies,

enhanced productivity and increased

attention to the impact on the airline’s

passengers.

Michael Clarke is a research

and development lead in

the research group supporting

Sabre Airline Solutions.

By Erin Buth | Ascend Contributor

United Airlines successfully utilizes multiple Sabre Travel Network distribution products to maximize revenue-generating opportunities and manage distribution costs.

“Lowering distribution costs is a key

component of our strategic plan to

reduce expenses.”

The airline integrated recovery model

incorporates various departments

within an airline to develop a more

optimal solution to recover from

schedule disruptions.

Through the Direct Connect Availability — Three-Year Option, United Airlines offers

its customers access to all published fares, including Web fares, through the travel

agency channel.

Ph

oto

s co

urt

esy

of

Un

ited

Air

lines

company

competitive fare data allowing United

to monitor its own pricing initiatives

against what its competitors are selling

in the same markets. The system pro-

vides airlines with all ticketing activity

in the Global Distribution System

excluding passenger personal data,

corporate, agency and commission-

related elements. The system is an

affordable element of marketing

research that provides insight into

how United’s advance sales compare

to that of the competition. The data

is invaluable for making decisions on

pricing promotions and viewing how

the market is selling.

“Lowering distribution costs is a

key component of our strategic plan

to reduce expenses,” said Greg Taylor,

senior vice president of planning for

United. “We saw the opportunity to

use a variety of Sabre Travel Network

products to accomplish this while

continuing the highest level of service

to our customers.”

By utilizing multiple tools, United

has been able to maximize revenue-

generating opportunities and manage

distribution costs, enabling it to sustain

long-term cost benefits.

Erin Buth is a sales marketing manager

for Sabre Travel Network.

News Briefs from Around the Globe

Who

American Airlines, Continental

Airlines, Delta Air Lines, Northwest

Airlines, United Airlines

What

Elected to participate in the Sabre ®

Direct Connect Availability SM — Three-

Year Option, which commits the carriers

to a three-year term at the highest level

of participation in the Sabre ® Global

Distribution System in exchange for a

reduced booking fee rate that is fixed

for three years. As part of the agreement,

the airlines will provide all published

fares, including fares they sell through

their own or third-party Web sites, to

all users of the Global Distribution

System, including more than 56,000

Sabre Connected SM online and offline

travel agencies. The program now

includes bookings made in the United

States, U.S. Virgin Islands, the

Caribbean and Europe.

Why

American — “Lower distribution

costs plus broader availability of our

fares to the largest subscriber base

means Sabre DCA is a real winner

for American,” said Craig Kreeger,

American's vice president-sales.

“Innovative solutions for today’s

marketplace make Sabre Travel

Network our preferred GDS provider.”

Continental — “Providing travelers

the maximum level of customer serv-

ice is the highest priority for us,” said

Jim Compton, senior vice president

of marketing for Continental Airlines.

“This program improves our ability

to do that by offering customers access

to all published fares, including Web

fares. It also helps us meet a key

business objective to further reduce

distribution costs. We recognize the

effectiveness of the Global Distribution

System, which offers one of the highest

yielding channels.”

Delta — “Through this new partner-

ship, we will give our customers added

flexibility, choice and convenience through

broader multi-channel access to our pub-

lished and Web-only fares,” said Lee

Macenczak, Delta’s senior vice president,

sales and distribution. “The program

also allows us to further reduce distri-

bution costs and reflects our confidence

in the value of the Global Distribution

System and its operating efficiencies as

a high-yield channel.”

Northwest — “Participating in the

Sabre DCA Three-Year Option enables

us to meet the important goal of low-

ering distribution costs while serving

travelers through multiple channels,”

said Al Lenza, vice president of distri-

bution and e-commerce with Northwest

Airlines. “This new initiative demon-

strates Northwest’s efforts to make all

our publicly available fares and content

available where it is economically

viable for us to do so.”

United — “It will provide our cus-

tomers with a full range of our fares in

a cost-effective manner for all parties,

while allowing us to significantly reduce

our distribution costs at the same time,"

said Greg Taylor, United Airlines’ senior

vice president-planning.

T H E H I G H L E V E Lvıew

Optimal performance for airlines and airports

These are unprecedented times in the air transport industry. But there’s one thing you can count on. Sabre Airline Solutions will be here, providing innovative technology solutions for your toughest challenges. Just as we have through five decades — in good times and in bad — for more than 200 airlines worldwide.

Times like these demand fresh thinking. Proven, ROI-based solutions. And a technology partner that can not only see the future, but can help you reach it. Times like these demand Sabre Airline Solutions. www.sabreairlinesolutions.com

proven

makingcontactTo suggest a topic for a possible

future article, change your address

or add someone’s name to the mail-

ing list, please send an e-mail mes-

sage to the Ascend staff at

wearelistening@sabre.com.

For more information about prod-

ucts and services featured in this

issue of Ascend, please visit our

Web site at www.sabreairlinesolu-

tions.com or contact one of the fol-

lowing Sabre Airline Solutions

regional representatives:

Asia/Pacific

Mike Baldwin

Senior Vice President

Level 9, Phillips Building

15 Blue Street

North Sydney NSW 2060

Australia

Phone: 61 2 8923 5230

E-mail: mike.baldwin@sabre.com

Europe, Middle East and Africa

Vinay Dube

Vice President

23-59 Staines Road

Somerville House

Hounslow, Middlesex

TW3 3HE, United Kingdom

Phone: 44 20 8814 4540

E-mail: vinay.dube@sabre.com

The Americas

Walter Jacobs

Vice President

1 E. Kirkwood Blvd.

Southlake, Texas 76092

United States

Phone: 817 264 7657

E-mail: walter.jacobs@sabre.com