Geoff Dixon, CEO, Qantas Airways James Hogan, President and CEO
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A MAGAZINE FOR AIRLINE EXECUTIVES 2004 Issue No. 21 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 ANON ALLIEDTHE ROUTE FRON TOT RECOVE R Y A conversation wAi tconversationh … with … Geoff DixoJamesn, CEO, Qantas AirwaysHogan, President and CEO, Gulf Air INSID E Industry Showing 19 Signs of INSIDRecoveryE Low-CostAir France Carrier and KLM Mode forlm 384 ContinuesEurope’s Largest to Evolv Airline e Recent Breakthroughs 1879 Thein Revenue Evolution Managemen of Alliancets A Conversation with oneworld, SkyTeam 26 and Star Alliance © 2009 Sabre Inc. All rights reserved. [email protected] regional Everything to Gain Estonian Air remained profitable during some of the industry’s lowest points, but the carrier still realizes the need to make major adjustments in order to adapt to a changed marketplace. By Tim Ricketts | Ascend Contributor mid a rapidly transforming This year, the carrier plans to add a fifth air- a profit for the third consecutive year. Estonian industry, the past year also craft to its single fleet of Boeing 737-500s. Air, which earned a net profit of €5.2 million marked a period of great change The airline, owned in part by Scandinavian (US$6.6 million) in 2003, more than doubling for Estonian Air. Airlines (49 percent), the Estonian govern- its €2.5 million (US$3.2 million) net result of the ment (34 percent) and Cresco Ltd., an previous year, carried 410,652 passengers for AIn recent months, the national carrier of the year, a 30 percent increase over the previous the Republic of Estonia added four destina- year, and maintained an average load factor of tions, leased an additional aircraft, introduced Our new and considerably lower 59 percent, five points higher than in 2002. a revamped low-fare structure and launched “prices have changed flying to an Erki Urva, president of Estonian Air, an ambitious information technology invest- affordable, down-to-earth mode attributed much of the growth to the airline’s ment program, which have helped the 13-year- new low-fare structure, which was introduced old carrier maintain profitability despite the of traveling for our customers in on all its routes in 2003 and features one-way struggles of the industry. Estonia and abroad alike. fares as low as €45 (US$56) to Hamburg, “Changes in products offered were ” Stockholm, Moscow, Oslo and other similar aimed at responding to changed customer destinations and approximately €65 (US$81) to needs and values,” said Leela Lilleorg, vice Estonian investment bank (17 percent), Frankfurt, Paris and Amsterdam. president commercial for Estonian Air. derives 85 percent of its income from sched- “Our new and considerably lower prices “Finding cost-efficient ways of conducting our uled passenger operations, 6 percent from have changed flying to an affordable, down-to- daily business does give the solid platform to charter operations, 3 percent from cargo and earth mode of traveling for our customers in enable that.” 6 percent from other services. Estonia and abroad alike,” Urva said. In 2003, the airline began service to Even while undergoing dramatic “Estonian Air has proven that an airline can Paris, Oslo, Berlin and Amsterdam, growing changes, Estonian Air grew its passengers car- offer prices comparable with bus, train and its network to 12 destinations in Europe. ried and load factors and managed to carve out ferry fares and still maintain profitable operation Photo courtesy of Estonian Air ascend 67 regional Everything to Gain Estonian Air remained profitable during some of the industry’s lowest points, but the carrier still realizes the need to make major adjustments in order to adapt to a changed marketplace. By Tim Ricketts | Ascend Contributor mid a rapidly transforming This year, the carrier plans to add a fifth air- a profit for the third consecutive year. Estonian industry, the past year also craft to its single fleet of Boeing 737-500s. Air, which earned a net profit of €5.2 million marked a period of great change The airline, owned in part by Scandinavian (US$6.6 million) in 2003, more than doubling for Estonian Air. Airlines (49 percent), the Estonian govern- its €2.5 million (US$3.2 million) net result of the ment (34 percent) and Cresco Ltd., an previous year, carried 410,652 passengers for AIn recent months, the national carrier of the year, a 30 percent increase over the previous the Republic of Estonia added four destina- year, and maintained an average load factor of tions, leased an additional aircraft, introduced Our new and considerably lower 59 percent, five points higher than in 2002. a revamped low-fare structure and launched “prices have changed flying to an Erki Urva, president of Estonian Air, an ambitious information technology invest- affordable, down-to-earth mode attributed much of the growth to the airline’s ment program, which have helped the 13-year- new low-fare structure, which was introduced old carrier maintain profitability despite the of traveling for our customers in on all its routes in 2003 and features one-way struggles of the industry. Estonia and abroad alike. fares as low as €45 (US$56) to Hamburg, “Changes in products offered were ” Stockholm, Moscow, Oslo and other similar aimed at responding to changed customer destinations and approximately €65 (US$81) to needs and values,” said Leela Lilleorg, vice Estonian investment bank (17 percent), Frankfurt, Paris and Amsterdam. president commercial for Estonian Air. derives 85 percent of its income from sched- “Our new and considerably lower prices “Finding cost-efficient ways of conducting our uled passenger operations, 6 percent from have changed flying to an affordable, down-to- daily business does give the solid platform to charter operations, 3 percent from cargo and earth mode of traveling for our customers in enable that.” 6 percent from other services. Estonia and abroad alike,” Urva said. In 2003, the airline began service to Even while undergoing dramatic “Estonian Air has proven that an airline can Paris, Oslo, Berlin and Amsterdam, growing changes, Estonian Air grew its passengers car- offer prices comparable with bus, train and its network to 12 destinations in Europe. ried and load factors and managed to carve out ferry fares and still maintain profitable operation Photo courtesy of Estonian Air ascend 67 regional “Estonian Air has proven that an airline can offer prices comparable Photo by Jennifer Knoeber with bus, train and ferry fares and still maintain profitable operation and development. Aviation in the entire world has changed forever, and Estonian Air has been successfully following these changes.” and development. Aviation in the entire world has changed forever, and Estonian Air has been successfully following these changes.” To help administer its new fare structure, the airline installed the Sabre ® AirMax ™ Revenue Manager, which features a restriction-free pricing model that enables airlines to forecast demand Estonian Air, founded in 1991 when the country regained its independence after the fall of in a restriction-free the Soviet Union, has positioned itself to take advantage of its home county’s entry into pricing environment the European Union this month. EU membership, which promises to increase passenger and determine the traffic to and from the country, will make it easier for people throughout Europe to travel best fare levels to use to the historic cities of Estonia and experience their old-world charm. for each flight. The installation of the Revenue Manager By revamping its fare structure and is part of the airline’s investing in IT, Estonian Air, headquartered in strategic IT investment the nation’s historic capital city of Tallinn, has program, launched in also prepared itself to take advantage of the first quarter of dynamic changes in its home country. This 2003 in order to help it By revamping its fare structure month, Estonia, located on the Baltic Sea adapt to the new mar- and the Gulf of Finland, bordering Russia and “and investing in IT, Estonian Air, ketplace, which has Latvia, fully enters the European Union, a seen the expansion of headquartered in the nation’s move expected to further boost a robust low-cost carriers and historic capital city of Tallinn, economy built since the country gained the retrenchment of independence following the collapse of the has also prepared itself to take traditional airlines. Soviet Union. The country has also begun Estonian Air realized advantage of dynamic changes preparations to adopt the Euro as its nation- that enhancing its IT in its home country. al currency in 2007. could give it a compet- ” As EU membership will make it easier itive advantage by increasing efficiency, Headquartered in Tallinn, the capital for more people to discover the scenic thereby reducing costs and further of Estonia, Estonian Air serves 12 desti- beauty of Estonia, a country featuring islands, improving profitability. nations in Europe with its fleet of four forests and lakes, the airline expects The airline, looking to improve its Boeing 737-500s (right) and will add its fortunes to continue to improve. The airline reservations and related IT systems as well a fifth 737-500 this year. already anticipates continued passenger as reduce costs, has also implemented the growth this year, adding new routes and increas- SabreSonic ™ passenger solution for reserva- ing frequencies to existing destinations. a tions and departure control functionality, the Sabre ® Aerodynamic Traveler ™ Self-Service Tim Ricketts is the Sabre Airline Solutions Kiosk and the Sabre ® Aerodynamic Traveler ™ account director for Estonian Air. Gate Reader to efficiently process passen- He can be contacted at gers at the airport. Photo and illustration courtesy of Air Estonia [email protected].