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Ascend | Issue 1 | 2005 vice rier ds in-flight ser s national car INSIDE Gulf Air’ wins top awar SAS restructures to better compete Jet Airways becomes an inter 2005 Issue No. 2 33 36 42 , President US Airways n , O ma CE .Douglas Parker, conversation with … THE TRANSFORMER page 44 A and W Chair Taking your airline to new heights Taking MAGAZINE FOR AIRLINE EXECUTIVES A 2005 Issue No. 2 www.sabreairlinesolutions.com All rights reserved. Printed intheUSA. Printed rightsreserved. All pr Darren Rickey and Elayne Vick. RickeyandElayne Darren Gary Potter, Marley, Robert Magee, Deborah Lynch, George Lindsey, Craig AlanLarson, Kochan, Walt Jensen, A G Greene, Gretchen Vinay Dube, Clarke, via e-mailtow and/or ser trademarks noted in italicsthispublicationare products logoand Solutions Airline theSabre Solutions, Airline Sabre P Address Corrections I Reader Inquiries Excellence. forPublication 2004 and2005Awards Quill. and Silver Quill CommunicatorsBronze Business Associationof 2004 International S B Associationof 2005 International Awards H Contributors Clay R Graphic DesignManager Frisbie James Art Direction/GraphicDesign www.sabreairlinesolutions.com 76092 Texas Southlake, Dr. 3150 Sabre B. ScottHunt Hawkins Stephani Editors inChief 2005 IssueNo.2 [email protected]. articles, pleasesendane-mailto cation orsuggestedtopicsforfutur f ll othertrademar ilver Quill and Gold Quill. andGold Quill ilver oper lease sendaddr usiness Communicators Bronze Quill, usiness CommunicatorsBronze len H ans B y ou hav ty oftheirr Taking yourairlinetonewheights vice marks of an affiliate of Sabre Holdings Corp. Corp. Holdings ofanaffiliateSabre vice marks eed elle, J ar v e ell, S espectiv ks, ser questions aboutthispubli ack B [email protected]. vice marks and trade names are the andtradenamesare vice marks tev e ess corr o wners. ©2005S e urkholder, Michael urkholder, Hodges, Carla Hodges, ections abre Inc. Inc. abre e - Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and/or service marks of an affiliate of Sabre Holdings Corporation. ©2005 Sabre Inc. All rights reserved. smart. proven. bankable. contact making E-mail: [email protected] E-mail: [email protected] P States United S Dr. 3150 Sabre Vice President representatives: regional AirlineSolutions Sabre or contactoneofthefollowing at www.sabreairlinesolutions.com E-mail: [email protected] +6591276927 Phone: 469005 Singapore E-mail: [email protected] +16826055335 Phone: States United S Dr. 3150 Sabre Vice President Kristen Fritschel Nor M Latin America E-mail: murray +442088144540 Phone: T Middlesex Hounslow, Road 50A Bath S Vice President Smyth Murray Europe, MiddleEastandAfrica Chai CheeR 750E Block Technopark 05-05 No. Level Vice President Powell Andrew Asia/Pacific of inthisissue and services featured aboutproducts information more For staff [email protected]. s add someonetothemailinglist,please or article, address changeyour future suggestatopicforpossible To end ane-mailmessagetothe outhlake, Texas 76092 outhlake, Texas outhlake, omer hone: +16826055333 W3 3EE, United Kingdom W3 3EE,United ar Ascend th America cela Lizárraga ville H , please visit our Web site Web please visitour T exas 76092 oad ouse .smyth@sabr e.com A scend bankable results. CFOs and CIOs agree. Software solutions must make a positive financial impact. Fine-tuning operations and maximizing revenue streams can add millions to your bottom line — actual, tangible returns that can be taken to the bank. By working closely with carriers worldwide, we’ve developed a portfolio of flexible, integrated solutions that can optimize operations for all airlines — any size, any business model, anywhere in the world. Learn how we can work together to help you realize bankable results. Call us at +1 682 605 1000. Or visit www.sabreairlinesolutions.com. smart. proven. bankable. contents 52 s y t r e l c t i s u f u d o r d o r p n i p 6 Airport 33 Gulf’s Onboard with 48 ASPire to 52 Catering to Facelifts Top In-Flight Service Leading Technology the Bottom Line Airports around the world are Gulf Air boosts in-flight service Airlines can leverage leading Airlines utilize modern technology modifying to meet the changing with enhanced amenities such technology through applications to heighten in-flight service, needs of their airline customers. as onboard nannies and chefs. service provider models at a reduce costs and increase fraction of the total cost of revenues. 9 Choosing ownership. a Model 54 Forecasting the Airlines should consider many (Revenue) Future factors when choosing the right 33 Accurately forecasting revenues business model. helps airlines make timely corrective marketing decisions 15 Crossing and enhance cash management. the Border Airlines are pressuring legislators to change current governmental policies that limit cross-border ownership. 19 “Fare”ly Simple Many traditional network carriers perspective are simplifying fares to offset the affects of low-cost competition. 22 Inflammatory Fuel Airlines must take necessary 36 Back to steps to counteract today’s the Future sharply escalating fuel prices. SAS has reorganized to better compete in its home markets. 25 Just the (e) Ticket 42 Jet Airways: From Airlines will have to modify their Domestic to International operations to comply with IATA’s Jet Airways capitalizes on electronic ticket mandate. reduced government regulations to add international service. 28 Reduced Fleets, Raised Revenue 44 The Many traditional airlines are Transformer reducing fleet types to gain oper- CEO Douglas Parker discusses ating efficiencies and effectively how the new US Airways has compete with low-cost rivals. remade itself into a carrier better positioned for long-term success. 31 T5: The Gateway e decided to focus this issue of Ascend on the many ways to British Airways’ Future W airlines around the world are embracing a fundamentally British Airways’ new Terminal 5 changed and more competitive industry. The changes have many will boost customer service and aspects — low-cost carriers with rising costs, traditional airlines improv- employee morale while gaining ing their cost structures, the development of new aircraft that open operating efficiencies. new markets and the growth of powerful technology that helps reshape operations. And, there has been much discussion and antici- pation about a possible transformation through industry consolidation. 36 Our cover Q&A with Doug Parker about the recent merger of US Airways and America West may very well signal the long-awaited 59 l y Form follows function — a n that has been misunderstood. n a “ o p Form and function should be one, i g joined in a spiritual union. m e o — Frank Lloyd Wright r ” c 56 African Safari: Continent’s 59 Latin 64 Talking Technology 69 Carriers on the Hunt for Beat with Barry Smith new Opportunities The low-cost/hybrid carrier model Airlines can better address crew, Many Africa-based airlines are is becoming more prominent in maintenance and operational modifying their operations to Latin America, changing the issues through fleet assignment leverage the continent’s growth region’s landscape. models that incorporate station potential. purity. 62 Small Companies, Big Business 67 Supplier 69 Looks Good, Delta leverages a valuable growth Connection Works Well market that provides an additional Sabre Holdings has developed Sabre Airline Solutions takes revenue stream. new technology to improve the a customer-centric approach ability for travel suppliers, such to ensure the development of as airlines, to distribute their innovative, highly usable software content. applications. with Tom Klein Group President, Sabre Airline Solutions/Sabre Travel Network restructuring of the airline industry. For better or for worse, it’s clearly Add the fact that while global traffic has only realized an annual growth consolidation as the new US Airways becomes a much bigger player and rate of 6 percent, the private aviation sector is growing considerably this aggressive move by Doug and his innovative team will surely shake more at 20 percent to 25 percent a year. up the U.S. airline industry. So what is the right answer? Coming on the heels of the Air France-KLM merger, the new US Airways feeds the notion that further consolidation will take place. And perhaps I believe some much-needed consolidation will benefit the industry if alliances will become more tightly woven to create even more consoli- seen in specific markets around the world. But it’s a mistake if we sim- dation and efficiency. So consolidation is happening, isn’t it? ply say that the industry is consolidating — it’s too limited a view. The number of customers who buy airline tickets continues to grow, and Inevitably, consolidation seems obvious — until you look at other market they are choosing from a broader range of options, making distinct changes that suggest just the opposite: that the airline industry is, in trade offs between price and convenience, high service and basic trans- fact, fragmenting. To believe that, you have to look at customer trends portation, and even the specific set of services for which they are will- and some high-growth markets. ing to pay. And they come in greater numbers from powerful, emerging markets such as China and India. So, I think the right answer is a bit of First, traditional network carriers today serve a much smaller percentage both — consolidation where it brings efficiency and fragmentation dri- of the total market. During the past five years, low-cost carriers
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