A MAGAZinE FOR AIRLinE EXECUTIVES 2006 Issue No. 2 2006 Issue No. 2 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 the globAl AdvocAte A Conversation With . Giovanni Bisignani director general and CEO International Air Transport Association page 38 www.sabreairlinesolutions.com I NSIDE Government regulations 6 affect globalization Latin American carriers 42 grow regionally AirAsia overcomes challenges 50 to its Thai-based subsidiary making contact To suggest a topic for a possible future article, change your address or add someone to the mailing list, please send an e-mail message to the Ascend staff at [email protected]. T aking your airline to new heights For more information about products 2006 Issue No. 2 and services featured in this issue Editors in Chief of Ascend, please visit our Web site Stephani Hawkins at www.sabreairlinesolutions.com B. 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All rights reserved. Printed in the USA. please send an e-mail message to smart. proven. bankable. [email protected]. Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and/or serviceAirline Solutions and the Sabre Sabre All rights reserved.marks of an affiliate Sabre Holdings Corp. ©2006 Sabre Inc. Helping you better market, sell, serve and operate — from planning through execution. We help you plan how to best offer your schedules market to customers and generate the most revenue. • Cargo management • Loyalty management • Revenue • Fares management • Revenue accounting management • Inventory • Revenue integrity • Schedule management management development We help you determine the best distribution channel sell to sell tickets to customers. • Booking engines • Customer relationship • Reservations • Business process management • Shopping management • Market data • Ticketing • Channel distribution and analysis We help you make the experience easier for your serve customers throughout the travel process. • Customer notification and trip information • Customer processing We help you manage daily operations to efficiently operate fly your schedules. • Crew management • Ground support • Resource • Dining and cabin • Maintenance, management services repair and overhaul • Schedule • Flight operations distribution smart. proven. bankable. contents 46 profile industry 34 6 38 The Global Red Tape Advocate Progress toward a more global IATA Director General and CEO industry has been affected by Giovanni Bisignani discusses his government regulations and views on greater liberalization other barriers. 25 Globalization: of the air transport industry. Fact and Fiction 10 The Unwritten Globalization in airline information 42 Livin’ La Vida Chapter technology will benefit carriers Buena Several factors must be through development of software Top Latin American carriers considered as Europe looks that is less expensive to own are luring passengers from to deregulate the computer and operate. buses to airplanes. reservations system industry. 28 46 50 16 The Route To Buying Spree No Borders All Thai’d Up Liberalization Global liberalization has fueled an Roberto Kriete, chairman and AirAsia continues expanding Alliances provide an alternative increase in the demand for travel. CEO of Grupo TACA, discusses despite challenges related to its to cross-border airline ownership how his airline has expanded cross-border ownership of its that could set the stage for more 32 Communications: throughout Latin America. Thai-based subsidiary. open skies in the future. A Necessary Exchange Communications play a vital 18 Pushing The role in developing partnerships Boundaries around the world. Has the reality of a deregulated European market met the 34 expectations? Going Global perspective Global expansion can create new 22 Working in a Low-Fare challenges for airlines that must Environment attract new customers. Low-cost airlines have caused traditional carriers to change their 36 revenue management practices Shaping Up and procedures. World scheduled airline passen- ger revenues have increased for the past three years and look to continue. 22 recently saw some analysis that calculated that the world’s airlines represent a US$400 billion industry, collec- i tively generating nearly US$3 trillion in economic activity. Without a doubt, airlines remain one of the main global eco- nomic engines, enabling the movement of people and cargo. And, while the current economic impact of airlines is certainly impressive, it could potentially be much higher if we operated in a less-restricted and more global industry. I’m encouraged to see that some steps have been taken toward unshackling our industry — more countries are reaching “open-skies” agreements, some governments have loosened ownership restric- tions for foreign investors and the three main airline alliances are showing the benefits of global partnerships. ascend 66 contents regional products company 52 Less Shopping. 56 66 At Your More Booking. Turning Profit Service New shopping and pricing Asia/Pacific airlines are growing Carriers will increasingly need functionality helps airlines numbers of passengers, amount interoperable technology in maximize e-commerce. of freight and overall revenues an increasingly global industry. despite high fuel costs. 70 From Distribution 58 Bridging to Merchandizing The Gap More airlines are realizing Kingfisher Airlines has deployed the benefits of the high-yield innovative solutions to work with GDS channel. global distribution systems. 74 Talking Technology 60 64 With Dirk Guenther Going Green? Revving Up Cargo and Michael Clarke Efforts to cap the emission of U.S.-based airlines are discover- New technology helps airlines greenhouse gases will have ing that revenue management accomplish large-scale schedule an impact on Europe’s aviation techniquescan help boost changes. industry. performance of cargo operations. 52 with Tom Klein Group President, Sabre Airline Solutions/Sabre Travel Network But much remains to be done. The International Air Transport that Giovanni has shared many of his insights and his vision for the Association estimates that the European Union’s actions cost airlines an industry in our cover story. estimated 5.9 billion (US$7.5 billion) a year. That’s a huge impact, and There are also plenty of examples of airlines — such as TACA it doesn’t even factor in similar results in other regions of the world. and AirAsia — that are following Giovanni’s lead and working to push The costs of inefficiencies inherent in the current system existing limits and force change. These airlines are expanding region- certainly haven’t helped airlines in their recovery efforts. And when ally, managing to work around government restrictions to develop combined with other factors such as record-high fuel prices, the cost of markets in several nations neighboring their home country. governmental involvement becomes an even larger burden. With the need for — and the potential benefits from — more There’s no question that less regulation results in more benefits openness, I believe it will be only a matter of time before we see the — not only for airlines, but for their customers as well. Alfred Kahn, development of a more rational structure to govern the airline