Geoff Dixon, CEO, Qantas Airways

A MAGAZINE FOR AIRLINE EXECUTIVES 2004 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

AN ALLIED FRON T A conversation with … Geoff Dixon, CEO, Qantas Airways

INSID E

Air France and KLM form 4 Europe’s Largest Airline

18 The Evolution of Alliances

A Conversation with oneworld, SkyTeam 26 and Star Alliance

inventory control and distribution. In connec- tion with the IT push, in 1997 Aeroflot imple- mented systems from Sabre Airline Solutions The Russian Steps to automate and streamline its operations. Aeroflot’s 11 In 2001, to continue updating its IT, Aeroflot selected Sabre Airline Solutions as its As part of its new information technology program, Aeroflot primary technology partner, gaining access to has selected a bundle of 11 decision-support tools in key a wide range of leading technology that would The new 21st century Aeroflot, by leveraging operational areas such as planning and scheduling, fares advanced technology, is emerging as a dynamic not only bring the carrier’s operations up to speed, but also lay the foundation for future management, crew management, dining and cabin ser- and progressive national flag carrier, reflecting growth and expansion. Airline officials the major changes taking place in Russia today. believed choosing a single, primary technology vices, and reservations. partner would provide functional, integration, commercial and contractual benefits that The solutions Aeroflot has selected include: would help it update its systems to accommo- ™ By Jeremy Sykes | Ascend Contributor date the growth in the Russian marketplace. SabreSonic Passenger Solutions, In selecting a primary technology part- Sabre ® AirMax ® Revenue Manager, or most of its 80-year history, Aeroflot ority. About a decade ago, with the move ner, Aeroflot officials said they chose Sabre Sabre ® AirMax ® Group Manager, Russian Airlines didn’t have to worry away from communism, the country began Airline Solutions “because of its insight and Sabre ® AirFlite ™ Profit Manager, about keeping up with the trends moving quickly to catch up and now has one of successful track record of working with global F Sabre ® AirFlite ™ Fleet Manager, impacting the world’s aviation industry. the fastest-growing IT industries in the world. and regional airlines.” Sabre ® AirFlite ™ SlotManager ™, As the state-run flag carrier for the Much like its home country, Aeroflot has also “The breadth of the offering from Sabre ® ™ Soviet Union, Aeroflot, launched in 1923, made IT development a priority. As the airline Airline Solutions provides an integrated solu- Sabre PC AirFlite flight scheduling system, merely was tasked with providing affordable entered the fast-changing international mar- tion across all of our operations. In fact, we Sabre ® AirPrice ™ fares management system, Photos courtesy of Aeroflot Photos courtesy transportation across the vast expanse of the ketplace, Aeroflot officials realized that they believe the technology solution it has pack- Sabre ® AirPrice ™ Contract Composer, Soviet Union, a country of 865 million square needed to change quickly to keep pace with aged for Aeroflot offers benefits that are Sabre ® WiseVision ™ sales expansion system, miles, linking the nation’s major cities as well their technologically advanced competitors. unmatched in the industry,” said Sergey Sabre ®ProVision sm MIDT processing service. as serving remote areas previously connected Kiryushin, Aeroflot’s chief information officer. only by rail. “This smart technology means improvements But the fall of communism, and the Aeroflot was determined to get introduction of market forces, dramatically “the most advanced and effective changed Russia and its most well-known airline, forcing the carrier to adjust in order to sur- technologies in the industry. THE HIGH LEVEL vive and compete on the international stage. It is for this reason we chose Now, as Russia continues to experience dra- News Briefs from Around the Globe the Sabre Airline Solutions matic economic growth, travel in the country vıew is soaring, and Aeroflot is working hard to technology package. keep pace. ” Who complex operations,” said Jim Tabor, operations in our ability to keep The Russian economy has been grow- general manager of operations perfor- everyone on plan.” ing at a rate of 4 percent to 8 percent in recent AirTran and jetBlue years, inflation has slowed, and travel is In 1997, Valery Okulov assumed the post What mance for AirTran. “FliteTrac Web JetBlue — “The two products will reflecting the surge. Russian airline travel is of chief executive officer of the airline and replaced every functional area of the benefit jetBlue by streamlining Updated their system operations expected to continue to grow both regionally moved quickly to incorporate modern business old system and brought new functions internal communications and and internationally. The growth of Russian air approaches, including adding technology. The control centers with new browser- travel during the next six years is forecasted to new CEO brought in external expertise to add a into the field station’s toolkit. Our field reducing reliance on telephone based modules for its operations increase 60 percent to 100 percent. Some new dimension to his management team, stations can now link via the Web to and teletype communications,” control and crew tracking systems. The experts predict that the number of passengers recruiting executives from the highly dynamic get estimated arrival and departure said Tom Rinow, director of system boarded in Russia will grow from 28 million Russian banking industry and bringing in indus- modules, part of the Sabre ® FliteTrac ™ last year to 100 million by 2015. try expertise from foreign airlines. times, station profile information, and operations for jetBlue. “As jetBlue and the Sabre ® CrewTrac ® systems, Airline officials realized that maintaining The new executive team focused on integrated log entries. continues to grow and expand can provide remote access to these Aeroflot’s position as the leading Russian air- improving the basics — the network and air- “FliteTrac Web meets our needs its route structure, station-specific line would take a drastic overhaul of its opera- line fleet were rationalized and service was applications using Sabre ® FliteTrac ™ tions, particularly its information technology. emphasized. External consultants assisted very well,” Tabor continued. “The communication will become even Web and Sabre ® CrewTrac ® Web. From top: Valery Okulov, Aeroflot chief For 70 years, as the state-run airline of a with strategy development. instantaneous ‘link and sync’ keeps more important. FliteTrac Web executive officer; Evgueni Bachurin, communist nation, Aeroflot, unlike many other As part of Okulov’s strategy, Aeroflot Why our field stations and customers will provide the kind of detailed Aeroflot commercial director; and Sergey free-market airlines, neglected to focus on also began using IT to help move to the next ™ Kiryushin, Aeroflot chief information officer. development of IT. Throughout the Soviet level of efficiency, embracing practices such AirTran — “FliteTrac Web exhibits better informed. We have seen major information that targets and is Union, business IT development was not a pri- as revenue management, fares management, the capabilities needed to manage our improvement during irregular tailored to each specific city.” a

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inventory control and distribution. In connec- tion with the IT push, in 1997 Aeroflot imple- mented systems from Sabre Airline Solutions The Russian Steps to automate and streamline its operations. Aeroflot’s 11 In 2001, to continue updating its IT, Aeroflot selected Sabre Airline Solutions as its As part of its new information technology program, Aeroflot primary technology partner, gaining access to has selected a bundle of 11 decision-support tools in key a wide range of leading technology that would The new 21st century Aeroflot, by leveraging operational areas such as planning and scheduling, fares advanced technology, is emerging as a dynamic not only bring the carrier’s operations up to speed, but also lay the foundation for future management, crew management, dining and cabin ser- and progressive national flag carrier, reflecting growth and expansion. Airline officials the major changes taking place in Russia today. believed choosing a single, primary technology vices, and reservations. partner would provide functional, integration, commercial and contractual benefits that The solutions Aeroflot has selected include: would help it update its systems to accommo- ™ By Jeremy Sykes | Ascend Contributor date the growth in the Russian marketplace. SabreSonic Passenger Solutions, In selecting a primary technology part- Sabre ® AirMax ® Revenue Manager, or most of its 80-year history, Aeroflot ority. About a decade ago, with the move ner, Aeroflot officials said they chose Sabre Sabre ® AirMax ® Group Manager, Russian Airlines didn’t have to worry away from communism, the country began Airline Solutions “because of its insight and Sabre ® AirFlite ™ Profit Manager, about keeping up with the trends moving quickly to catch up and now has one of successful track record of working with global F Sabre ® AirFlite ™ Fleet Manager, impacting the world’s aviation industry. the fastest-growing IT industries in the world. and regional airlines.” Sabre ® AirFlite ™ SlotManager ™, As the state-run flag carrier for the Much like its home country, Aeroflot has also “The breadth of the offering from Sabre ® ™ Soviet Union, Aeroflot, launched in 1923, made IT development a priority. As the airline Airline Solutions provides an integrated solu- Sabre PC AirFlite flight scheduling system, merely was tasked with providing affordable entered the fast-changing international mar- tion across all of our operations. In fact, we Sabre ® AirPrice ™ fares management system, Photos courtesy of Aeroflot transportation across the vast expanse of the ketplace, Aeroflot officials realized that they believe the technology solution it has pack- Sabre ® AirPrice ™ Contract Composer, Soviet Union, a country of 865 million square needed to change quickly to keep pace with aged for Aeroflot offers benefits that are Sabre ® WiseVision ™ sales expansion system, miles, linking the nation’s major cities as well their technologically advanced competitors. unmatched in the industry,” said Sergey Sabre ®ProVision sm MIDT processing service. as serving remote areas previously connected Kiryushin, Aeroflot’s chief information officer. only by rail. “This smart technology means improvements But the fall of communism, and the Aeroflot was determined to get introduction of market forces, dramatically “the most advanced and effective changed Russia and its most well-known airline, forcing the carrier to adjust in order to sur- technologies in the industry. THE HIGH LEVEL vive and compete on the international stage. It is for this reason we chose Now, as Russia continues to experience dra- News Briefs from Around the Globe the Sabre Airline Solutions matic economic growth, travel in the country vıew is soaring, and Aeroflot is working hard to technology package. keep pace. ” Who complex operations,” said Jim Tabor, operations in our ability to keep The Russian economy has been grow- general manager of operations perfor- everyone on plan.” ing at a rate of 4 percent to 8 percent in recent AirTran and jetBlue years, inflation has slowed, and travel is In 1997, Valery Okulov assumed the post What mance for AirTran. “FliteTrac Web JetBlue — “The two products will reflecting the surge. Russian airline travel is of chief executive officer of the airline and replaced every functional area of the benefit jetBlue by streamlining Updated their system operations expected to continue to grow both regionally moved quickly to incorporate modern business old system and brought new functions internal communications and and internationally. The growth of Russian air approaches, including adding technology. The control centers with new browser- travel during the next six years is forecasted to new CEO brought in external expertise to add a into the field station’s toolkit. Our field reducing reliance on telephone based modules for its operations increase 60 percent to 100 percent. Some new dimension to his management team, stations can now link via the Web to and teletype communications,” control and crew tracking systems. The experts predict that the number of passengers recruiting executives from the highly dynamic get estimated arrival and departure said Tom Rinow, director of system boarded in Russia will grow from 28 million Russian banking industry and bringing in indus- modules, part of the Sabre ® FliteTrac ™ last year to 100 million by 2015. try expertise from foreign airlines. times, station profile information, and operations for jetBlue. “As jetBlue and the Sabre ® CrewTrac ® systems, Airline officials realized that maintaining The new executive team focused on integrated log entries. continues to grow and expand can provide remote access to these Aeroflot’s position as the leading Russian air- improving the basics — the network and air- “FliteTrac Web meets our needs its route structure, station-specific line would take a drastic overhaul of its opera- line fleet were rationalized and service was applications using Sabre ® FliteTrac ™ tions, particularly its information technology. emphasized. External consultants assisted very well,” Tabor continued. “The communication will become even Web and Sabre ® CrewTrac ® Web. From top: Valery Okulov, Aeroflot chief For 70 years, as the state-run airline of a with strategy development. instantaneous ‘link and sync’ keeps more important. FliteTrac Web executive officer; Evgueni Bachurin, communist nation, Aeroflot, unlike many other As part of Okulov’s strategy, Aeroflot Why our field stations and customers will provide the kind of detailed Aeroflot commercial director; and Sergey free-market airlines, neglected to focus on also began using IT to help move to the next ™ Kiryushin, Aeroflot chief information officer. development of IT. Throughout the Soviet level of efficiency, embracing practices such AirTran — “FliteTrac Web exhibits better informed. We have seen major information that targets and is Union, business IT development was not a pri- as revenue management, fares management, the capabilities needed to manage our improvement during irregular tailored to each specific city.” a

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Partnering with a single IT provider gives Aeroflot access to a broad portfolio of advanced decision-support tools Good Neighbors designed to meet its current and future objectives.

Photos courtesy of Aeroflot Regional associations enable member airlines to collaborate by sharing expertise, interacting with each other and leveraging purchasing power.

By Badal Vyas | Ascend Contributor

lobal alliances and individual partnerships fulfill its mission “to promote cooperation cialized airline forums. The Industry to our operations and that means better we chose the Sabre Airline Solutions technol- ble traffic in the next five years. Gare not the only kinds of relationships amongst Arab airlines and to serve their com- Partnership Program enables these companies results to our bottom line and improved ser- ogy package. Its solutions are the only ones The airline is poised to take another that benefit airlines. mon interests through service excellence.” to build relationships with AACO members. vice to our customers.” that will provide both flexibility for our clients’ large step by joining the SkyTeam alliance in Around the world, regional airline orga- The organization, formed within the AACO’s leading role among the Arab air- Through its IT partnership, Aeroflot selling, booking and ticketing air travel, as well November 2005, positioning it to resume its nizations have developed to not only promote framework of the Arab League of States, now lines provides fertile ground for future in-depth selected advanced tools for its market data as maximizing productivity for agents. In addi- place among the world’s pre-eminent airlines. regional cooperation but also to assist mem- includes 20 airlines. Photo courtesy of AACO and analysis, fares management, flight opera- tion, the new technology will provide many With SkyTeam’s various operational and IT bers with their operations, share ideas about The organization’s tions, planning and scheduling, and revenue new features both for Aeroflot and for travel requirements, Aeroflot continues to rely on its how to cope with a changing industry environ- main objectives The AACO airlines have management. Earlier this year, Aeroflot agents as well as for our passengers.” chosen IT partner, placing its primary systems ment, and provide education and training for include: “realized the need to take expanded the agreement again, adding com- Although the airline’s move to incorpo- in the hands of Sabre Airline Solutions, which members. Promoting the ponents from the SabreSonic ™ Passenger rate advanced IT represented a culture will help the airline prepare to enter the global As they developed, these regional asso- highest safety action and have begun Solutions for reservations, departure control change, it proved successful, helping Aeroflot alliance. ciations also realized they could assist mem- standards, introducing new revenue- and Web shopping. The open-systems archi- improve its financial performance from annual Through innovative leadership, taking bers by helping them bargain for products and Providing a frame- growing techniques. tecture of the SabreSonic solutions provides losses of US$100 million in 1998 to profits of bold initiatives and by relying on a strong, sta- services or by acting on behalf of all members work for a better ” Aeroflot with leading functionality and the flex- US$100 million by 2002. The changes have ble technology partner, Aeroflot has taken the in order to secure better bulk rates from ven- economic environ- — Abdul Wahab Teffaha, ibility to integrate new technology. The agree- helped Aeroflot take advantage of the coun- necessary steps to shake off the shackles of dors. Today’s associations go beyond their ment for airline secretary general, AACO ment also will provide Russian travel agencies try’s continued economic stability, generating its communist past and transform itself into a original purpose by uniting to form collective operations, with full access to the Sabre ® global distribu- after tax profits of US$113 million on revenues leading, modern airline. a bargaining consortiums focused on collabora- Promoting high tion system, giving them the ability to directly of US$1.5 billion in 2003. tion and attaining cost-effective solutions from standards of con- book air travel, car rentals, cruises, tours and Last year, the airline carried 6 million vendors and suppliers. sumer-driven services, cooperation and success stories. The AACO rail travel worldwide. passengers, a far cry from its Soviet heyday of Two regional associations — the Arab Providing a high-quality and cost-effective airline consortium strives to enable Arab air- “Aeroflot was determined to get the the 1970s when it transported more than 100 Jeremy Sykes is Sabre Airline Air Carriers Organization and the African framework for human resources develop- lines to better understand and respond to their most advanced and effective technologies in million as the world’s largest airline. But Solutions’ head of sales for the Europe, Airlines Association — are leading examples of ment, national markets, allowing them to expand the industry,” said Evgueni Bachurin, commer- Aeroflot’s passenger traffic is growing steadi- Middle East and Africa region. He can be how neighboring airlines can work together to Investing in the synergy of interaction their share and services. AACO’s committees, cial director for Aeroflot. “It is for this reason ly, and the airline has aggressive plans to dou- contacted at [email protected]. benefit themselves. between members through establishment formed from subject matter experts from of joint projects. member airlines, meet regularly to share Continuously working to study and insights, examine industry trends and deter- update the needs of the airlines it represents, mine market needs. These committees invite THE HIGH LEVEL AACO is part of an emerging new breed of vendors to present their products and then partnerships. The AACO Industry Partnership evaluate the product’s features and match News Briefs from Around the Globe Program, for example, helps create a mutually them with airlines’ needs. vıew Pan-Arab Partners beneficial environment for airlines and other AACO joint projects entail more than The Arab Air Carriers Organization has been a companies. The program attracts carefully volume discounts and extend into the quality Who Why regional consortium pioneer. Since its found- selected world-leading companies and pro- of service as well as the common require- ing in 1965, the organization has worked to vides them with exclusive access to its spe- ments of AACO member airlines. All AACO bmi bmi’s process of tracking daily “We are very pleased to be changes to industry fares by implementing the AirPrice system, What maintaining all Airline Tariff which will complement other Sabre +count it up Selected the Sabre ® AirPrice ™ fares Publishing Company published Airline Solutions products currently in management system to boost fares in a common database, use,” said Adrian Parkes, commercial 230 — Length in feet of the Russian Antonov AN-124-100, the world's largest regularly operated cargo plane. The aircraft has a profitability through tactical and enabling the carrier to retrieve director for bmi. “We look forward to wingspan of 240 feet; it weighs 175,000 kilograms (385,800 pounds) when empty and can carry a total payload of 120,000 kilograms strategic analysis and management of both published and unpublished reaping the benefits of a fully (265,000 pounds). The aircraft's 24-wheel landing gear allows it to kneel down, which significantly reduces loading and unloading times. fares. The system will streamline fares by origin and destination. automated pricing solution.” a

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