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]. Taking your airline to new heights For more information about products 2006 Issue No. 1 and services featured in this issue of Ascend, please visit our Web site Editors in Chief at www.sabreairlinesolutions.com Stephani Hawkins B. Scott Hunt or contact one of the following 3150 Sabre Drive Sabre Airline Solutions regional Southlake, Texas 76092 ­representatives: www.sabreairlinesolutions.com 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.

Art Direction/Design Asia/Pacific Shari Manning Andrew Powell Vice President Contributing Designers Yvette Hunt, Michelle Kennedy, Level No. 05-05 Danielle McLelland, Tim St. Clair Technopark Block 750E Chai Chee Road Contributors Singapore 469005 Shaquiq Ahmed, Kathy Benson, Jack Burkholder, Vinay Dube, Glen Harvell, Phone: +65 9127 6927 Roland Hollis, Carla Jensen, Tracey Lewry, E-mail: [email protected] Craig Lindsey, Marcela Lizárraga, George Lynch, Deborah Magee, Sandra Meekins, Europe, Middle East and Africa Gary Millward, Mona Naguib, Soona Murray Smyth Oh, Nancy Ornelas, Wally Phillips, Jody Vice President Pickering, Jenny Rizzolo, Santosh Sah, Somerville House Melvin Tan. 50A Bath Road Publisher Hounslow, Middlesex George Lynch TW3 3EE, United Kingdom Phone: +44 208 814 4540 Awards E-mail: [email protected] 2006 International Association of Business Latin America Communicators Gold Quill. Marcela Lizárraga 2005 International Association of Business Communicators Bronze Quill, Silver Quill Vice President and Gold Quill. 3150 Sabre Drive Southlake, Texas 76092 2004 International Association of Business United States Communicators Bronze Quill and Silver Quill. Phone: +1 682 605 5333 E-mail: [email protected] 2004 and 2005 Awards for Publication Excellence. North America Reader Inquiries Kristen Fritschel If you have questions about this Vice President publication or suggested topics for 3150 Sabre Drive future articles, please send an e-mail to [email protected]. Southlake, Texas 76092 Phone: +1 682 605 5335 Address Corrections E-mail: [email protected] Please send address corrections via e-mail to [email protected]. Sabre Airline Solutions, the Sabre Airline Solutions logo and products noted in italics in this publication are trademarks and/or service marks of an affiliate of Sabre Holdings Corp. All other trademarks, service marks and trade names are the property of their respective owners. ©2006 Sabre Inc. All rights reserved. Printed in the USA. smart. proven. bankable. 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.

Helps airlines plan how to best offer their 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

Helps airlines 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

Helps airlines make the experience easier for their serve customers throughout the travel process. • Customer notification and trip information • Customer processing

Helps airlines manage daily operations to efficiently operate fly their schedules. • Crew management • Ground support • Resource • Dining and cabin • Maintenance, management services repair and overhaul • Schedule • Flight operations distribution

smart. proven. bankable. contents profile industry products 29

6 Distribution in India: 42 50 Anyone’s Game Blue Skies Take it Online Increasing air travel introduces IndiGo, as a result of India’s An increase in online air travel new challenges and opportunities liberalization, will take flight bookings in India has created for India’s travel distribution later this year. a need for robust Web-based suppliers. capabilities. 44 8 India Traffic Full Recovery 52 on the Rise 29 Jet Airways rapidly responds to Just Checkin’ in Numerous factors contribute On Track schedule disruptions through the Congestion in India’s airports can to India’s increase in travel. Indian Railways presents strong use of advanced technology. be streamlined through superior competition to the country’s self-serve check-in technology. 11 Low-Cost Carriers airlines. 46 Open Skies Gain Altitude Opens Challenges 54 Low-cost airlines and new 31 The Complete Package: India’s two traditional carriers Car“go” to India entrants in India may lead India’s Cargo Industry adapt to a new environment after Advanced technology helps cargo to consolidation. Air freight companies in India the country’s government eased operators in and out of India are positioned to seize a greater industry restrictions. realize continued success during 14 Measuring Revenue Man- ­portion of the country’s cargo a time of rapid growth. agement Performance market. Effective implementation and sound processes help airlines 35 get the most from their revenue Powers to Be management program. China and India are on their perspective way to becoming economic 20 powerhouses. Seeking Gold Liberalization has opened 38 Making it myriad possibilities for India’s Simple air transport industry. Bryan Wilson, project director for the International Air 23 The in Place Transport Association’s 100 to Outsource ­percent electronic ticketing Some of the world’s most ­initiative, discusses the prominent companies and progress on reaching the airlines are outsourcing to India. 2007 goal.

26 Open for 40 Preparing for Takeoff: India’s Business Aviation Infrastructure India’s airlines are poised to India’s government focuses expand their reach through on renovating its airports’ alliances and partnerships. infrastructure. don’t know if it’s a hobby, a passion, simply part of my job or, most likely, a combination of the three, but, to me, there’s nothing more exhilarating and rewarding in the air transport industry than watching a specific market rapidly emerge. In recent years, I’ve been fascinated by India’s ability to reinvent itself. A country that has traditionally endured economic chal- lenges has become the world’s second-fastest growing nation and has transformed itself into a true economic powerhouse, resulting in rising income for the estimated 300 million people in its middle class.

Several economic indicators have shown how far India has progressed. In 2004, India’s companies realized better than 15 percent on invested 31 capital. From 1999 to 2003, the percentage of non-performing loans dropped from about 15 percent to about 8 percent. mmmmmmmmmmmmmm 54 74 regional company

56 Rapid Reaccommodation: 60 Opening 68 From Planning Attaining Higher Levels the Door Through Execution of Customer Service Perot Systems helped launch Successful airlines are able to Sabre® Reaccommodation an economic surge in India that market their service, sell tickets, Manager helps airlines quickly proves valuable to the country’s serve customers and operate 74 respond to flight cancellations airlines. efficiently. The Sabre Airline Following the Sun ® and delays by efficiently rebook- Solutions business has tools The Sabre Holdings™ business A Game-Winning ing customers on alternate 62 designed to help airlines achieve offices in India provide exceptional Strategy flights. each of these strategic goals. service for local customers. Ethiopian Airlines is at the top of its Talking Technology 58 game in Africa’s air travel market. 70 76 From Distribution The Right Fix With Richard Ratliff to Merchandizing

Ramco Systems Corp. takes the 65 New choice-based demand Airlines in India seek ways Remote Access lead in providing maintenance, forecasts will enable airlines to to generate additional repair and overhaul solutions Four Canada-based airlines provide quickly determine when they are revenue. to carriers in India and around service to some of the country’s under or over priced. the world. most remote towns, filling a need for travelers who would otherwise have little or no travel options.

with Tom Klein Group President, Sabre Airline Solutions/Sabre Travel Network

It’s not a coincidence that India has made such a turnaround. A number specific areas of their businesses to be closer and better aligned with of factors, specifically liberalization and deregulation, have significantly their customers. contributed to the country’s transformation. Several businesses around the world have outsourced parts of their operations to India. A number I’m energized about our role in helping boost India’s economy. The Sabre of start-up, low-cost carriers have materialized. Several top carriers are Holdings™ business has offices in India, both in Mumbai, which is the exploring partnerships and alliances to enter India’s marketplace. The list aviation hub of the country, and Bangalore, the Silicon Valley of India. goes on. Our offices are engaged in software development, on-time customer service delivery and operational support throughout Asia/Pacific. For India’s growth potential is enormous; in 2004, 15 million passengers trav- our airline customers and India, it’s a win-win situation. Our Asia/Pacific- eled domestically by air, which is only 1.07 percent of the nation’s total based customers have local access to us, an essential element of supe- population. Last year, airlines in India placed aircraft orders accounting for rior customer service and relationship management. And for India, our 9 percent of the global total. offices have made available hundreds of jobs for local residents.

For the air transport industry, the Indian government lifted some very I’m excited about the opening of our Bangalore office last September. strict civil aviation regulations that really started the ball rolling. New Seeing the results of such hard work and team dedication is something competition, such as Kingfisher, SpiceJet and IndiGo, has spurred the that makes me very proud. And if I didn’t know it before, which I did, I cer- market, giving rail services a run for its money and providing options for tainly know now that our airline customers are in good hands with our sea- the country’s travelers that were once out of reach for many. In addition, soned, hard-working and incredibly talented India-based professionals. the new businesses have presented numerous employment opportuni- ties, helping further boost the economy and providing greater stability for With enormous positive energy revolving around the India marketplace the nation’s residents. and so many opportunities for airlines to reach a large population of poten- tial travelers, it was obvious that we needed to dedicate an entire issue Outsourcing has also made an enormous impact on India’s economy. of Ascend to India. Of course, our various sections enable us to drill Plans to build new airports to support the country’s growth in traffic down on other issues in the areas of technology and different regions of may solicit assistance from foreign information technology providers the world, so I’m certain this issue will give you valuable information. specializing in airport automation. Boeing will outsource aerospace system works to India during the next 10 years. Airbus is also exploring ways of leveraging this emerging market. IT providers are outsourcing mmmmmmmmmmmmmm India With more than 1 billion people — from diverse backgrounds in terms of religion, race, language, color and Tea Fields in Munnar customs — India is the second most populous country in the world and the world’s largest liberal democracy. India recognizes 23 official languages spoken across its diverse regions, including Hindi and English, the official languages of the central government. Behind China, it is the fastest growing devoloping economy in the world. Taj Majal, Agra, Uttar Pradesh India is divided into 28 states and seven union territories, a few of which are highlighted here. India has a rich and unique cultural heritage and has managed to preserve its established traditions throughout history while absorbing customs, traditions and ideas from both invaders and immigrants.

A street scene in Bangalore

Mumbai

Swami Vivekananda Memorial, Tamil Nadu

Photos by: Tea fields — geopaul/iStockphoto.com; Bahai temple — ARTEKI/ Shutterstock; Taj Mahal — Alejandro Lapuerta Mediavilla/Shutterstock; Street in Bangalore — Dhana Shekar/Shutterstock; Mumbai — JupiterImages Corporation; Swami Vivekananda Memorial — ARTEKI/Shutterstock; Goan Bungalow — Evgeny Itsikson/Shutterstock

Goan Bungalow A Country of Diverse Proportions

Kerala Visitors are attracted to the biodiverse state by its beaches, hill stations, tropical forests, waterfalls, wildlife, Ayurvedic health centers and monuments. Kerala surpasses the rest of the country in literacy, health care, population control, equitable distribution of income and popular participation in governance.

National Capital Territory of Delhi This Union Territory contains the nation’s capital, New Delhi, the economic hub of Northern India and one of the fastest- growing cities in Asia. In Old Delhi, tourists flock to attractions such as mosques, forts and other monuments that depict India’s Muslim history. Indira Gandhi Airport in Delhi is one of India’s main domestic and international gateways.

Uttar Pradesh Bahai Temple, New Delhi With nearly 176 million inhabitants, Uttar Pradesh is the most populous state in India and the most populous state in the world. Home of the Taj Mahal in Agra, Uttar Pradesh attracts a large number of both national and international visitors. Popular cities include Kanpur, Allahabad and Varanasi, widely considered to be the second oldest city in the world after Jerusalem.

Karnataka Karnataka is one of the most industrialized states in India. Its capital, Bangalore, has become a worldwide IT hub and is the IT capital of India, producing approximately 38 percent of India’s software. Karnataka is an ecologically beautiful land with tropical forests, beaches, thundering waterfalls and native wildlife, a fitting home to UNESCO’s Niligiri Biosphere Reserve.

Maharashtra Maharashtra is India’s leading industrial state, contributing 23 percent of national industrial output. Mumbai, the capital of Maharashtra, handles about 25 percent of the domestic and 38 percent of the international air passenger traffic in the country. It houses the headquarters of major financial institutions, insurance and mutual fund companies and is the home of major software parks.

Tamil Nadu Tamil Nadu is one of the most progressive and industrialized states in India. Chennai, the state capital, is the second leading software exporter in India and the home of India’s largest IT park. The city is also the most preferred destination for high-end business process outsourcing in financial services, healthcare and other back-office services for multinational companies.

Goa This tiny, formerly Portuguese enclave is one of India’s most popular domestic and international tourist spots. Although Goa has only 63 miles (101 km) of coastline, it attracts almost 12 percent of total foreign tourists arriving in India.

Source: Wikipedia mmmmmmmm industry

Distribution in India: Anyone’s Game

A heightened interest for air travel presents new challenges and opportunities for India’s travel distribution suppliers.

By Emmanuel Phillips | Ascend Contributor

he travel industry in India is growing at becoming aware of the fact that technology Share of India Market an incredible rate, making it necessary provided by computer reservations systems 60% T for airlines, travel agencies, railways and has to be the frontrunner if they are going to other travel-related companies to leverage successfully control costs. technology, adopt new business models and India’s travel business is expanding at 50% simply work smarter. And it’s no different for a rate of 20 percent to 25 percent year over 49% distribution providers. year, and all major GDS players are distribut- 40% The increase of disposable income, uti- ing their systems in India. Today, Amadeus 37% lization of the Internet and discounted airfares holds 49 percent of the market, Galileo holds 30% has given a boost to customers’ willingness 37 percent and Abacus (a partner with Sabre ™ to travel. And global distribution systems are Travel Network ) holds 14 percent. And with 20% utilized to ensure customers have immediate the recent entrance of Worldspan, combined access to updated information, last-minute with a rapidly changing environment, airline 14% availability and immediate confirmation. distribution is anyone’s game. 10% Travel distribution in India is still pre- Most business transactions will occur via 0% dominantly performed through travel agencies, the Internet in the near future, and GDSs will 0 Sabre/Abacus Galileo Amadeus Worldspan which account for nearly 90 percent of the continue evolving to meet the needs of tomor- country’s travel sales, and they remain the row’s travelers. Electronic tourism has quickly Rapid expansion of travel in India may primary point of access to customers. Travel gained a foothold in the Indian market, with radically shift market share for the world’s agents, who rely on GDSs, continually concen- an estimated 25 percent of travel sales being top GDSs. trate on their bottom line and are increasingly conducted through the Internet as of January

+count it up

239 49,973 28 million Number of paved runways at Number of airports in the world, accord- Number of direct, indirect and induced India’s airports. ing to the 2004 CIA World Factbook. jobs worldwide provided by air trans- port, which is expected to rise to 31 million by 2010. 130+ 730,750 1.6 billion+ Number of airlines in the European Number of U.S. revenue passenger Number of passengers worldwide air transport industry. Europe also enplanements from June 2004 to who use the world’s airlines for busi- has a network of more than 450 May 2005, with 721,743 scheduled ness and leisure travel. Research airports and approximately 60 air and 9,007 non-scheduled. indicates that by 2010, this number navigation services providers. could exceed 2.3 billion.

6 ascend mmmmmmmmmmmm industry

2005. According to industry analysts, this figure will increase to 50 percent to 60 percent in the India Passenger Numbers (millions) next five years. Electronic ticketing makes up Year International % change Domestic % change Total % change the majority of the country’s Internet sales and online hotel bookings are quickly rising. Online bookings are gaining momentum in India, as 1990-00 13.3 2.9 12.9 6.9 39.0 5.5 is evident from the recent announcement by Delta Air Lines that it has chosen India as its 2000-01 14.0 5.4 14.0 8.8 42.0 7.7 first Asian market to introduce online bookings. Internet usage has reached whopping 2001-02 13.6 -2.7 13.2 -5.9 40.0 -4.9 proportions in India, and projections call for a 54 percent growth during the next year. Travel 2002-03 14.8 8.8 14.5 9.6 43.7 9.4 portals are being launched at regular intervals. The online travel distribution market in India accounts for nearly 1.5 percent of the total 2003-04 16.7 12.3 16.0 10.9 48.7 11.4 travel market and is expected to grow to 10 percent in the next five years. 2004-05 19.5 17.0 20.1 25.0 59.6 22.3 The GDS channel, though still strong, faces several challengers as content provid- India has experienced significant growth in passenger traffic year over year, with an ers look to alternative distribution methods. ­exceptional boost occurring between 2003 and 2005. The hospitality industry is increasingly looking toward online travel intermediaries in place of Source: Ministry of Civil Aviation GDSs. In India, the rapid expansion of low-cost carriers is causing a clash of view with tradi- Rich product offerings and unique fea- ing themselves more relevant to all sectors in tional airlines. Traditional carriers are operating tures aimed at meeting diverse customer the tourism industry — airlines, travel agents through traditional GDSs while LCCs have requirements has led to an increase in the and other service providers. Going forward, moved to Internet-based models. number of travel insurance players aggres- every distribution channel will have to provide However, the traditional GDS model is sively promoting overseas travel. innovative offerings with cutting-edge technol- still relevant in India. Airlines continue to pay Last year was an extremely healthy ogy that will provide products that will bring commissions to travel agents, and recently, one for travel in India, and the biggest ben- value to their customers. a Kingfisher Airlines, one of the country’s new- eficiary of this unprecedented growth was est carriers, introduced a 10 percent commis- the Indian consumer. The country’s middle sion per sale to travel agents and will distribute class and rapidly increasing domestic tourism its inventory through GDSs. ­segment is spurring growth in its high-end One of the fastest-growing segments travel segment. Emmanuel Phillips is managing in India is travel insurance, and most of the The years ahead will bring new chal- director for Sabre Travel Network insurance suppliers distribute their products lenges for distribution systems in India. This in India. He can be contacted at through GDSs using their own Web sites. year, distribution companies will focus on mak- [email protected] Photo by K. Pichumani/The Hindu Pichumani/The K. by Photo Flight Plans

Number of Value* Airline Year founded planes ordered (in billions)

Air India 1953 68 US$8.1

Indian Airlines 1953 43 US$2.2

Jet Airways 1993 50 US$9.1

Air Deccan 2003 62 US$2.6

GoAir 2005 50 US$3.3

Kingfisher Airlines 2005 78 US$6.0

Paramount Airways 2005 5 US$0.14

SpiceJet 2005 20 US$1.3

Airlines from India are on an aircraft buying spree. India’s travel industry is rapidly moving toward electronic tourism, with an estimated 25 percent of travel in India being *Includes options and plans as well as list and declared prices. sold via the Internet. Source: Bloomberg mmmmmmmmmmmm ascend  Background photo by Jason Stitt/Shutterstock industry

uring the last few years, India has been Regional Breakdown Traffic Breakdown by Region one of the fastest-growing air travel of International Traffic The Middle East is the largest single regional D markets. With a total population base of market out of India, owing mainly to migrant greater than 1 billion people, India represents to/from India labor from India working in the Middle East. a huge potential market. Even though it is This market constitutes 33 percent of total known as a developing country, India has a international traffic for India. Air India, Indian 300-million-strong middle class that travels Latin America Airlines, Gulf Air and Emirates carry the larg- frequently by air domestically and abroad. 0.3% est amount of traffic between India and the While domestic traffic has taken off recently, Middle East. India also has strong natural international Oceania Africa Europe is India’s second-largest market traffic — more than 25 million people of 2.8% 3.1% — 19 percent of the total — with the United Indian origin live in other parts of the Kingdom constituting the bulk of it. The United world, including the Middle East, the United Kingdom has strong historical links with India. Kingdom and the United States. In addition North Many European points, such as Frankfurt, to expatriate travel, business travel has America Germany, and Paris, France, are major gate- increased, resulting in strong overall growth ways for traffic beyond destinations such as in travel to and from India. 15.4% Other Asia the United States. International traffic in and out of the 25.6% North America represents 15 percent country is currently estimated at 23.5 million of international traffic to and from India — the passengers per year, which has been increas- largest international growth market from the ing steadily for the past few years, with Middle East United States. About 1.4 million people of 2005 being a strong growth year — increasing 33.5% Europe Indian origin live in the United States. India is by almost 17 percent. With liberalization 19.3% also the largest source of foreign students in of the air transport industry, this trend is U.S. universities. In addition, growing business expected to continue. Based on the Inter- links, particularly the global sourcing market, national Air Transport Association growth has created increased business travel to India. rates, international traffic to and from India is expected to increase to 33.4 million pas- How Airlines are Responding sengers by 2010. As the market continues to expand, both The Middle East, largely due to Indian The main components of traffic to India nationals working throughout the Indian and foreign carriers are responding include: region, represents the largest travel aggressively to market growth. Indian carriers Expatriate travel — About 25 million people market for India. But other regions, have taken the lead by expanding domestic of Indian origin who live abroad provide a such as North America and Europe, are and international services. At the Le Bourget strong ethnic travel market attractive to air- growing rapidly as India liberalizes its Airshow last year, Indian carriers ordered 190 lines. November through March, which is a air transport industry. new jets — the largest total for any country mild winter season in India, is the strongest and almost 9 percent of the world’s orders for season for travel to India. Summer holiday

season shows another seasonal peak due to Hindu Gopakumar/The S by Photo vacation travel. Global sourcing — The trend toward global sourcing has increased interest in India because it has a large base of skilled, English-speaking workers who are attrac- tive to multinational companies. The trend started in the early ’90s with call centers. India has now become a hub for software development, and airlines are catering to the market with direct services to development hubs such as Bangalore in southern India. Student travel — Each year, between August and September, thousands of students leave India to study at western universities. This constitutes a strong seasonal market out of India. During summer breaks, some of this traffic returns to India for vacation, adding inbound traffic. Growing economy — India has been on a strong growth path for the last few years, thanks to liberalization. Indian gross domes- tic product is growing at an average rate of 7 percent and is expected to continue at this rate for the next few years. As incomes Many native Indians travel abroad to attend college at western universities, contributing increase, resident Indians have more dispos- to a rush in outbound traffic during August and September and a heavy increase of inbound able money and have started taking holidays traffic in May and June. abroad. mmmmmmmmmmmm ascend  industry

Highlight Based on the International Air Transport Association growth rates, international traffic to and from India is expected to increase to 33.4 million passengers by 2010.

new jets in 2005. Growth in capacity last year New Jersey, in October. American Airlines Previously, Air India was the only Indian carrier was particularly remarkable due to increased began non-stop service from Chicago, Illinois, that served the market. liberalization. This trend is likely to continue to Delhi in November. Air India, which, so far The Indian market has a strong growth in the next few years if aircraft orders are any has had the largest share of the U.S.-India potential given the large population base and indication. market, is contemplating non-stop service to growing income and economy. This provides Air Sahara and its new owner Jet U.S. destinations to maintain its share. And growth opportunities for airlines serving the Airways are the largest private carriers that to cater to the growing information technol- market. Airlines are taking these opportunities have recently started serving international des- ogy business, Delta Air Lines announced new into account as the growth during the last year tinations. State-owned Air India and Indian service to Chennai, India, via its European indicates. And this is just the beginning. a Airlines are not far behind. Air India is trans- gateways. forming itself with a large order for long-range Liberalization of bilateral agreements jets for the first time in 10 years. created opportunities for growth from International carriers are also mov- London, one of the largest and most con- ing rapidly into the growing market. With strained markets from India. Recent bilateral Vijay Bathija is senior principal the advent of super-long-range jets such as ­agreements increased capacity by more than of marketing and planning, and the 777-200ER, non-stop services between 100 percent between the United Kingdom and Khaled Al-Eisawi is manager India and the United States have become India. Taking advantage of this, Virgin Atlantic market research and analysis for the possible. American Airlines and Continental and British Airways announced increases in consulting practice for the Sabre Airlines were the first carriers to take advan- service to India last year. Air Sahara became Airline Solutions business. They can tage. Continental Airlines started non-stop the second private carrier after Jet Airways be reached at [email protected] ­service between Delhi, India, and Newark, to announce service from India to London. and [email protected].

Growth in International Capacity Estimated O&D International Traffic to/from India

120 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 40 100 2005 35 80 2004 2002 2003 30 2001 60 25

20 ASK (billions) 40 15 Passengers (millions)

20 10

5 0 0 Local and international airlines are responding to the booming India market by increasing the number of available The last five years have seen a growing trend of increasing travel in the India market. seats to and from the country. After years Forecasts call for growth to continue for at least the next five years, reaching an estimated of moderate growth, capacity increased 33.4 million passengers by 2010. 24.6 percent from 2004 to 2005. 10 ascend mmmmmmmmmmmm Photo by G. P. Sampath Kumar/The Hindu Photo by Jan Kertzscher/PlanePictures.net 11 - - ascend While the rise in gross domestic pro- “Approximately 20 percent to 25 per The clear correlation in the demand and low-fare airlines. duct and a changing urban lifestyle is leading to a higher propensity to travel, much of the growth of air passengers driven by the segment is coming from the conversion LCC of rail passengers (see related article on page 29). flyers,” first-time are passengers our all of cent said Gaurav Agarwal, head of Air marketing Deccan. “We for grow the market in part by lowering prices on established routes and get ting the train customers to fly. In each of our the price of air travel in India reenforces what has been observed in other India sectors — is that a price-sensitive sales market potential at with low huge prices. This bodes especially well for the growing ranks of India’s Photo by Dana Ward/Shutterstock Photo by Dana Ward/Shutterstock a air

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20 country’s market have Airlines sengers India’s serving the route in October 2004, the average average the 2004, October in route the serving 215 to 162 from increased load passenger daily while fares declined from an average of 6,000 rupees (US$135) to 4,000 rupees (US$90). launch of Air Deccan, India’s its on seen clearly be can Deccan first Air of impact LCC. The Guwahati-Delhi route. After the carrier began India’s aviation sector enjoyed a percent increase in domestic passengers from healthy 11 2003 to 2004, which further grew to an excep tional 25 percent in 2005, coinciding with the eration of new entrants, the majority of which are low-cost carriers. Low-Cost F ket in India is witnessing an unparalleled prolif

Low-Cost Carriers GainLow-Cost Altitude mmmmmmmmmmmm industry

flights, we get at least 40 to 50 passengers also ramping up capacity to prepare for further ther,” said Capt. Gopinath. who get off the trains.” growth based on fleet orders already placed Other new startups are incorporating a India has a significant indigenous travel with aircraft manufacturers. The market share pure-play strategy by focusing on their air prod- market; the state-run railway network accom- of low-cost carriers is likely to approach 30 uct with low fares and low costs. SpiceJet’s stat- modates roughly 5 billion total passenger percent by next year. ed goal is to be “a low-fare, no-frills airline that trips, of which approximately two billion are aims to make air travel accessible to everyone.” long-distance domestic trips, while the num- Business Models “We are looking at purely a low-cost ber of domestic air passengers is only 15 In India, similar to other regions of the world, model,” Kumar said. million. Every day, 800,000 passengers travel LCCs with a mix of business models are Likewise, GoAir expresses its desire to by first- and second-class air conditioned rail, emerging. Air Deccan, for instance, approach- be “commoditizing air travel” and promises “a compared to just 40,000 airline seats available. es the market as an add-on retailer. quality-consistent, quality-assured and time- At the right price, some railway passengers, “We make no efforts to lure high-end efficient product through affordable fares.” those traveling in the more elite classes, are passengers; our target is the smart traveler Recent trends focus on development likely to shift from rail to air travel. who values his money,” said Air Deccan’s of more hybrid business models in India. “What we do is price between two chief executive officer and founding managing Paramount, for example, represents an upscale spectrums,” said Sanjay Kumar, general man- director, Capt. G R Gopinath, in a recent issue pure-play business model and aspires “to pro- ager of sales and marketing for SpiceJet. “Our of Express Travel and Tourism. vide world-class designer products and unpar- highest fare is around 20 percent to 40 percent How does the carrier do it? It offers alleled comfort, giving true value for money.” lower than the normal economy fare of full-ser- some of the lowest cost alternatives on key The airline targets the business travel vice airlines, and our lowest fare is close to the routes. market and offers premium-class services on air conditioned fare on Indian Railways.” In October, Air Deccan launched an its flights but not economy class. It is no surprise that the Ministry of Civil in-flight shopping scheme called “Brand for Kingfisher Airlines, on the other hand, Aviation estimates air passenger numbers to Less” with AVA Merchandising, part of the has adopted many characteristics of traditional grow to 59 million by 2010. Low-cost carriers, Indian arm of the global merchandising group full-service carriers. The carrier’s motto says which will transport an expected 5 million pas- Envision Merchandising. it all, “The Kingfisher class experience aims sengers in 2005 and 2006, or approximately “This will also help us get incremental to take air travel beyond just getting from 20 percent of total domestic passengers, are revenue, which will help us reduce fares fur- here to there.” This includes seatback in-

Low-Cost Carrier Business Models

A global study of low-cost carriers by Sabre Airline Solutions identified five predominant business models, which represent a continuum. There are many carriers that use a hybrid of these models, but they generally represent the unique strategies observed in the industry.

Business model Description Global prototype Indian example

Add-on retailers Demonstrate a singular focus on managing costs and being Ryanair Air Deccan the lowest-cost player in the markets they serve. Offer a highly basic product and rely on very aggressive low fares to stimulate demand. Rather than targeting a specific customer segment, these carriers seek to attract a broad base of customers through low fares. Developing ancillary revenues (on-board sales, fees for bag- gage) are critical for building profitability and further subsidizing even lower fares.

Pure plays Build brand based on an “every-day low-price” concept and offer a basic Southwest SpiceJet product. Utilize low fares to stimulate new demand, but profitability GoAir is driven predominantly by air travel as opposed to ancillary revenues.

Upscale pure plays Maintain cost-conscious approach but provide a more sophisticated jetBlue Paramount product that often includes frills such as larger seats, in-flight entertainment and business-class seating. Brand is based on cus- tomer experience, while pricing reflects value versus other similar product offerings in the marketplace.

Transitional Represent a hybrid between low-cost carriers and traditional carri- Gol Kingfisher Airlines ers. Make tradeoffs involving complexity of their business model and costs such as developing a network route structure rather than point to point and forming alliances with other carriers through codesharing or interlining.

Charter hybrid Charter operations represent a majority of their business. Air Berlin However, these carriers also sell scheduled seats on charter flights to augment their business with higher-yield passengers. Many exist in Europe and came about as a reaction to the consumer travel trends and LCC competition. 12 ascend mmmmmmmmmmmm industry Photo courtesy of The Boeing Company Boeing The of courtesy Photo Photo courtesy of GoAir of courtesy Photo

Despite uncontrollable costs such as jet fuel and landing fees, the Centre for Asia Pacific Aviation estimates that low-cost airlines in India can lower costs significantly more than tradi- tional carriers by following a simplified business model. Photo courtesy of Embraer of courtesy Photo Photo courtesy of Airbus of courtesy Photo flight entertainment, extra-wide seating, pre- assigned seats and meal service. In addition, Kingfisher Airlines confirmed orders for 20 ATR 72-500 turboprops, which Nigel Harwood, Kingfisher’s chief operating officer, describes as “feeder aircraft” for the carrier’s Airbus routes. This clearly implies a network route structure as Kingfisher Airlines grows. Similar to their global brethren, Indian LCCs have embraced long-held marketing strategies: price competition and differentia- tion. Although business models in India may leum Corp. Ltd., a petroleum refiner and mature LCC regions in the world, will eventu- be closely related to their global counterparts, retailer with 4,400 retail outlets, which enables ally see more consolidation. Kaul predicts that Indian LCCs have uniquely adapted them- the carrier to sell tickets through HPCL’s by 2010, there will be just three large LCCs selves to their market. Some aviation leaders gas stations. In addition, Air Deccan has in India, with another three or four smaller in India dispute that the country’s LCCs really recently implemented technology giving its regional players. a have a cost advantage. customers the ability to book flights via “With two-thirds of your fixed costs that mobile phones using NGPay’s mobile payment you can’t touch — be it fuel, navigation charg- platform. es, landing fees, pilots’ salaries — it doesn’t The future appears bright for LCCs in Steve Dumaine is a senior principal in make sense to me,” said Naresh Goyal, chair- India. Yet, while air travel is expected to grow airline strategy and planning for the man and founder of Jet Airways in a recent by more than 20 percent a year in the coming Sabre Holdings™ business. He can be Airline Business article. years, many believe that India, like the more contacted at [email protected]. However, LCCs still are able to achieve numerous benefits due to their busines model. Kapil Kaul from the Centre for Asia Pacific Expected Low-Cost Carrier Fleet Growth in India Aviation estimates that Indian LCCs can reduce Airline Start date Expected fleet size Time frame their costs by 15 percent to 20 percent versus legacy carriers by adhering to a simplified Air Deccan August 2003 75 2010 business model. SpiceJet’s Kumar is even more optimistic. Kingfisher Airlines May 2005 65 2010 “What is controllable with us? Staff uti- SpiceJet May 2005 20 2008 lization, distribution costs, operational issues, high density [route] and [aircraft] utilization Paramount October 2005 10 2010 benefits, and manpower capabilities such as multi-tasking,” he said. “With that kind of GoAir November 2005 36 2009 structure in place, you could probably realisti- cally achieve cost differentiation of 20 percent Magicair Announced 20 2008 to 40 percent versus a full-service airline such East-West Announced 40 2010 as Jet Airways or Indian Airlines.” To contain costs, Air Deccan doesn’t IndiGo Announced 100 2012 even provide free newspapers because it would require more time for attendants to Indus Announced 10 2007 clean the aircraft between flights. Air One Announced — — LCCs in India are also highly innovative in managing their sales and distribution Total 376 channels. Like other developing econo- mies, Internet and credit card penetration is The liberalization of the Indian air transport market has created opportunities for new airlines, characteristically low. However, rather than many of which have adopted a low-carrier operating model and have announced aggressive relying largely on traditional distribution fleet-growth plans. If the airlines carry through on their announced plans, almost 400 channels, LCCs have developed new sales additional aircraft will be filling the skies over India. channels to reach the broadest possible customer base. In March 2005, Air Deccan Source: Center for Asia Pacific Aviation entered a partnership with Hindustan Petro- (Data does not factor in some carriers that have plans to fly but have not announced fleet details.) mmmmmmmmmmmm ascend 13 industry

Measuring Revenue Management Performance

Airlines can get the most from their revenue management program by ensuring it is implemented effectively and processes are in place to validate its performance.

By Ben Vinod | Ascend Contributor

successful revenue management pro- out of revenue management in a steady-state to the bottom line, and without CEO commit- gram is the culmination of process, peo- operating environment. ment to revenue management, this can never A ple and technology that are effectively be accomplished. harnessed to maximize revenues. Measuring Investment and the CEO buy-in Key challenges that cannot be overcome performance of the revenue management Investing in revenue management requires without a commitment toward revenue man- process during its evolution from inception commitment from senior management to agement include: to steady state is probably the single most adopt the processes across the airline. Many How to accurately forecast products and important task to ensure the process is indeed chief executive officers have a keen interest services, contributing to the success and adding to the in revenue management given the competi- How to allocate capacity to derive the bottom line. tive advantage and impact on the bottom line. optimal mix, The introduction of a revenue manage- Without this commitment, revenue goals can- How to minimize spoilage, ment process at an airline generates incre- not be achieved. There are several complex How to retain market share without risking mental revenues. This is achieved with over- decisions that need to be made to add revenue revenue dilution, booking controls, discount fare mix controls, origin-and-destination controls and control of Passenger Simulation Model group passengers. However, the feat of rev- enue management is contingent on people, Scenario generation Core simulation process and technology coming together, and • Estimate unconstrained book- Scenarios, Event queue handling, the value generated can vary significantly by ings, cancellations, no-shows Simulation Data simulation clock, event data airline. There is a strong business case for • Generate simulation events handling, statistics collectors investing in revenue management, and airlines should examine all stages of the evolution of revenue management from inception through “go live” and steady state. Airline revenue management process Passenger decision model Today, most of the top 50 carriers Passenger modeling around the world have already made an Historical Bookings, cancellations, spill, investment in revenue management. How- Airline data bookings upsell, recapture, upgrades, depar- ever, several carriers in the top 300 are still PNR, Forecaster ture process (left at gates, depar- ture boarding compensation) contemplating investing in the practice. bookings, Forecasts Broadly speaking, there are three stages in inventory the evolution of revenue management within open/close Accepts / Optimal Requests an airline: controls rejects Investment and the chief executive officer Network Inventory controls buy in, optimizer Bookings Go-live validation and monitoring key perfor- Passenger storefront mance indicators, Steady-state operations and continuous demand management. Audit trail Summary It begins with a tentative decision to reports invest in revenue management followed by and log the validation exercise and commitment to make it work. The second step constitutes An effective simulation model requires three components — the airline’s revenue management the “go live” and subsequent validation of rev- process, a simulation environment and the passenger decision model. By using this model, enue-management-influenced performance. an airline can demonstrate the return on its investment in a revenue management program. The third stage is essentially getting the most 14 ascend mmmmmmmmmmmm industry

Revenue Management Transition going live with revenue management — pre- and Performance Measurement departure statistics and post-departure statis- tics. Monitoring performance measures over time serves two purposes. First, it is used as Steady-state a yardstick to compare month-over-month and Investment and “Go-live” operation year-over-year measures. Second, it detects the CEO hurdle validation continuous demand weaknesses in the revenue management pro- monitoring KPIs management cess and identifies corrective actions that need to be taken quickly.

The three stages in the evolution of revenue management within an airline lead Post-Departure Standard Measures to the development of an optimal program that delivers the most value. The historical performance of a flight is calcu- lated after flight departure. Post-departure per- formance metrics can be broadly classified as How to maintain an acceptable quality ger miles, load factor, spoilage and over sales. standard performance measures and revenue of service to retain customers, The incremental revenue statistics from the opportunity measures. How to adjust capacity to match demand proposed environment compared to the base- to supply for optimal performance. line (current environment) will demonstrate the Post-Departure Revenue The first stage involves the justification payback on investment. Opportunity Measures process by modeling business requirements The simulation model is also required to The revenue opportunity model represents and constraints that are specific to the operat- understand what enhancements in the future the second broad category of post-departure ing route structure and characteristics of the provide maximum return on investment and performance measurement. It determines the airline. Developing a simulation model consists can be used for extensive “what-if” analysis. incremental revenue earned as a percentage of three core components — simulation envi- Airlines have the option to develop a simula- of the maximum revenue opportunity avail- ronment, airline revenue management process tion model on their own or become part of a able through perfect revenue management. and passenger decision model. consortium with companies, such as the Sabre Increases in revenue opportunity measures An important consideration for simula- Holdings™ business, that provide unrestricted over time demonstrate the improvements tion is to use actual passenger name record access to a sophisticated simulation framework. in the revenue management process. This data augmented with spilled passengers Overcoming the CEO hurdle does not end approach can estimate revenue management based on historic open/close information by with the simulation analysis. In fact, it is simply performance at the flight or network level of booking class from the reservations inventory the beginning. The next step would be to iden- detail by determining both the potential for system. This approach to simulating passenger tify the vendor of choice, establish an organiza- revenue gain through revenue management behavior is a departure from the traditional tional structure with the right people and skill and the proportion of the revenue potential Monte Carlo simulation technique. Also, the pas- sets for the organization, and establish the reve- that was actually achieved. senger modeling module should replicate the nue management playbook based on a detailed The potential for revenue gain may specific inventory control structure that will be business process reengineering exercise. change over time as external factors change. supported in the airline’s reservations system. However, the proportion achieved will corre- The output of the simulation model will “Go-Live” Validation and Monitoring late with revenue management performance. include all the pertinent performance indicators key Performance Indicators Thus, the model provides a consistent mea- such as network revenue, revenue per avail- There are two broad categories of perfor- able seat miles, revenue per revenue passen- mance measures that can be tracked after Components of Discount Allocation Components of Performance Measurement Revenue Opportunity

Performance $$$$ measurement Spoilage

Historical performance Expected performance $$$ (post departure) (pre departure) Dilution

$$ Standard Revenue Corporate Model opportunityRevenue performance opportunity performance performance Revenue gained

$ Maximum revenue opportunity Corporate Model

performance performance Minimum Actual revenue

revenue revenue Revenue customer opportunityRevenue Minimum

Pre-departure statistics and post-departure statistics can be used to monitor performance The total revenue opportunity can be divided over time. Such measures can provide a basis of comparison and identify weaknesses in the into spoilage, dilution and revenue gained revenue management processes that need correcting. through the revenue management process. mmmmmmmmmmmm ascend 15 industry

Post-Departure Performance Measures Corporate measures Description Load factor The ratio of onboard traffic to available seats expressed as a percentage. An alternate definition is the ratio of revenue passenger miles to the available seat miles expressed as a percentage. Yield Passenger revenue per revenue passenger mile/kilometers. Revenue per available seat This is considered the single most important measure and the ratio of passenger revenue to miles/kilometers available seat miles/kilometers. Market share Represents an estimate of the proportion of total traffic in a market. Can be estimated from market information data tapes and passenger shopping data. Oversale (denied boarding) rate Calculated separately for voluntary and involuntary denied boardings. It is the ratio of number of denied boardings to the number of passengers boarded expressed in denied boardings per 10,000 passengers boarded. Spoilage Represents the number of empty seats on closed flights. Spoilage rate Ratio of number of spoiled seats to the number of passengers boarded expressed as a percentage. Over-sale cost Cost of customers who were denied boarding. Should be tracked by airport. Components of denied boarding costs are voucher costs, meals, ground transportation and goodwill. Expressed in unit of currency per person by airport. Load factor on closed flights This is the correction factor for incorrect overbooking. Measurement is based on open/close status throughout the flight by booking class and calculated as a weighted average by flight leg and base compartment. Closing rate Probability that demand for a booking class exceeds the available seats in the class. Employee productivity Standard measures of employee productivity and usually reported year over year. Average number of employees Productivity statistics are important since employee compensation constitutes Seat capacity per employee a significant part of the operating costs. (seat miles/kilometers) Passenger load per employees (ton miles/kilometers) Revenue per employee Model measures Description Forecast errors Errors associated with demand forecasting, cancellation rate forecasting, boarding rate forecast- ing. Common measures include mean absolute deviation, standard error, bias, weighted mean absolute percent error and mean squared error. Pre-Departure Performance Measures Corporate measures Description The ratio of onboard traffic to available seats expressed as a percentage. An alternate definition Booked load factor is the ratio of revenue passenger miles to the available seat miles expressed as a percentage. The expected load factor of a flight at departure based on current bookings, forecast of remain- Expected load factor ing demand and inventory controls. Expected revenue of a flight at departure load based on current bookings, forecast of remaining Expected revenue demand and inventory controls. Expected yield Expected passenger revenue per revenue passenger mile/kilometers. Expected revenue per available seat The ratio of expected passenger revenue to available seat miles/kilometers. miles/kilometers Ratio of spilled passengers to unconstrained demand to date for a future departure. This statis- tic must be computed by leg class or service class depending on inventory control method. If Spill rate by class the spill rates are not ascending from the highest valued class to the lowest, it identifies a prob- lem with how discount allocations are set. Probability that demand for a booking class exceeds the available seats in the class (pre-depar- Closing rate ture closing rates). Model measures Description Errors associated with demand forecasting, cancellation rate forecasting by reading day interval. Forecast errors Common measures include mean absolute deviation, standard error, bias and mean squared error. 16 ascend mmmmmmmmmmmm industry

sure, which enables airlines to track relative Impact of Revenue revenue management planning often has sig- performance over time. In addition, the model Management nificant positive financial impact as well. Long- also provides a specific revenue benefit associ- term revenue management planning must ated with revenue management. This capabil- consider the marketing plan encompassing ity enables airlines to quantify the benefits flight schedules, fares, group and off-tariff associated with performance improvements Capacity sales practices, distribution methods, passen- due to system or procedural changes or costs planning ger handling policies, frequent flyer program, associated with poor performance. This mea- Operations Marketing and advertising. Because so many functions sure can be applied across flight departures are involved, long-term planning must be con- by time or geographic regions or system to ducted at the corporate level. measure aggregate performance. Key performance indicators associated Discount allocation spoilage represents Revenue Fleet with revenue management should be tracked Distribution empty seats that result from premature clo- management planning and monitored across organizational silos, sure of discount classes in spite of excessive given its relevance to the key stake hold- demand for a flight that is a direct result of ers. This end-to-end transparency horizontally over estimating show-up rates and/or de- (across organizational boundaries) and vertical- mand for higher-valued booking classes. The Pricing Reservations ly (within an organizational hierarchy) should be revenue customer opportunity statistic is cal- leveraged by the CEO to enable zero latency in culated from the optimal mix achievable up Sales decision making. to the actual boarded count-by-flight leg, Business process integration across var- meaning that: ious functional areas — revenue management, Dilution equals actual revenue subtracted capacity planning, marketing, operations, fleet from revenue customer opportunity, Various functions within the airline can ben- planning, pricing, reservations, sales and dis- Spoilage equals actual revenue plus dilution efit from an effective revenue management tribution — is required for effective deci- subtracted from maximum revenue oppor- process. Using revenue management data sion making. This entails the optimal use of tunity. across the major functional areas of an air- revenue management data (both inputs and The revenue opportunity measures can line can lead to improved decision making. outputs) for effective decision making across be calculated by flight leg or flight number as the major functional areas in airline planning well as at the network level of aggregation. To and operations. compute the measures for a flight number or business climate and new low-cost entrants As is most often the case, forecast accu- network will require that a deterministic linear in the market. racy is blamed for poor corporate performance. program be solved. Frequently, multivariate models are If forecasts were perfect, achieving the target used to fit a response surface model to the performance measures would be a non issue. Pre-Departure Standard Measures significant variables that impact incremental The typical symptoms indicate that forecasts The pre-departure performance of a flight is revenues and, hence, isolate the revenue monitored to take corrective actions when impact of revenue management controls. This Forecast Accuracy vs. a flight’s expected performance is in doubt. approach has only met with limited success Proactive Management There are several key measures associated due to noise in the calibration process. A with corporate performance and model perfor- common approach is to normalize the fares mance, including: and recalculate all the pertinent statistics to Proactive Booked load factor, determine the benefits that can be attributed management Expected load factor, to revenue management. Expected revenue, Airlines operating in an origin-and-des- Expected yield, tination inventory control environment should Expected revenue per available seat mile/ store the total bid price and associated fare kilometer, value of the reservations request on the Spill rate by class, passenger name record before ending the Earnings/ Closing rate. ­transaction in the reservations system. The share estimate total bid price is calculated at the time of sell Isolating Revenue Management for determining availability. Once this data Performance is captured in the PNR, on a post-departure Improve Deliver on Isolating the performance of the airline reve- basis, the incremental contribution that can ­forecast the plan nue management process translates into be attributed to the revenue management accuracy in plan targets determining the incremental revenues gener- ­process can be determined. ated with optimal revenue management con- trols without considering other environmental Passive Steady-State Operations and management influences. Continuous Demand Management Measuring the direct revenue benefit Revenue management serves a central role in that can be attributed to revenue management an organization. When considering an invest- A combination of proactive management is difficult to estimate since it is difficult to ment in revenue management, an airline should and improved forecast accuracy can help an isolate the impact of revenue management evaluate the short- and long-term benefits. For airline make its plan, which means it would controls from external factors. Typical exter- a typical airline, most revenue management meet revenue and market share targets as nal factors that impact revenue management resources are focused on the short-term goal well as achieve target customer service lev- performance include pricing actions, capacity of maximizing revenue with a given sched- els and cost targets. changes, competitive activity, changes in the ule and fare structure. However, long-term mmmmmmmmmmmm ascend 17 industry

may be accurate at a macro level (e.g. market), Events and Alerts ous demand management addresses demand but not accurate at the itinerary class level Resolution variability positively to ensure the plan’s targets where seat inventory is consumed. Frequently, are met. situations may arise when too many discount Based on the recognition that variabil- seats have been sold, resulting in higher- PLAN ity in a competitive environment is too high valued passengers being spilled. As a direct to consistently forecast accurately, how can consequence of these issues, there tends to Events setup, Continuous revenue management performance measures be passing the blame among sales and rev- KPIs, thresholds, monitoring and be used proactively to make the plan happen enue management and operations when plans frequency of generation of consistently in spite of high variability in are not met. What the functional silos fail to ­monitoring alerts demand? An airline must embrace the para- recognize is that the business environment is digm of continuous demand management, becoming too dynamic to just rely on forecast- which requires putting processes in place ing accurately to drive performance. Categorize that account for variability and then proac- Putting revenue management processes alerts tively using all the business levers available aside for a moment, ultimately, the most impor- to respond to make that plan happen. This is tant issue is that an airline focuses on making accomplished by proactively balancing cur- “What-if” Opt iona the plan happen. The plan involves meeting l l Root cause rent and future goals as well as revenue and analysis oo revenue and market share targets for the cur- p analysis costs by using all means available to take cor- rent period, achieving target customer service rective action. levels to protect future revenues and achiev- To address variability, latency should be ing cost targets. A paradigm shift is required Execute Recommend overcome to ensure proactive management. to manage demand continuously to effectively business lever business lever Latency results because of slow propagation manage the business even if the forecasts are EXECUTE of information resulting in excessive cycle not accurate. Continuous demand manage- times for decision making. ment requires active monitoring of key per- Revenue management does not address The management of events, which serves formance indicators and proactively reviewing the cost side of the equation, which is an as a central nervous system, can be alerts to take the necessary corrective actions anathema for most unprofitable airlines today. established and orchestrated for proactive to ensure the plan can be achieved. This On the cost side of the equation, the same ­decision making. rapid sense-and-respond capability of continu- framework can be used to monitor and deliver

Alerts, Root Cause Analysis and Resolution

Event Root Cause Analysis Business Lever

Revenue management role Pricing role Sales role Capacity planning role Increase availability for class K by point of sale Inventory by class below plan Promote underperforming markets Market entity A Point of sale LON revenue below plan below plan Re-optimize price list and file new higher Sales volume Market entity B margin fares Ineffective promotions below plan revenue below plan Revise overrides Market entity C for desired markets revenue below plan to incent travel agent System revenue below target Match competitor price Market entity A Competitor price drop yield below plan Lower availability for low-value class Q that Market entity B Booked class variance Yield below plan negatively impacts yield yield below plan skewed to lower class

Market entity C Ineffective promo Promote new packages yield below plan packages Reduce capacity in market

The root cause analysis framework of an event helps an airline understand what caused the deviation from the plan and the business lever (supply or demand) that should be invoked to take corrective action. A root cause analysis should be conducted on each KPI, such as system revenue. The activation of the business lever may lie in different organizations such as pricing, revenue management, sales or capacity planning. A similar decision tree will be required for all KPIs that need to be monitored to ensure consistency in decision making. 18 ascend mmmmmmmmmmmm industry

Highlight

To guarantee ROI, a commitment is required from all levels of management, starting with the CEO, to establish the revenue management process and define roles, responsibilities and accountability for actions taken.

on cost targets for the current period and also a few weeks. and take corrective actions. With its portfolio deliver on targets for efficiency improvements The payback from revenue management breadth, the Sabre Airline Solutions® business that drive lower costs in the future. is usually realized within weeks and rarely is working with several airlines, small and Event management is central to the exceeds a year. As a general rule, the larger large, to establish processes to monitor the orchestration of continuous demand manage- the airline, the faster the payback on the initial plan with standard reports for performance ment based on alerts generated from rev- investment. This is because the incremental measurement. The ultimate challenge is to enue management performance measures. costs of deploying a revenue management automate this framework to ensure consistent The management of events serves as a central solution for a larger airline is much smaller than actions based on events. nervous system. This requires the definition of the magnitude of the incremental benefit. Even Ultimately, in steady state, revenue revenue management KPIs at distinct levels of for airlines with as few as 50 to 75 departures management plays a key role to “make the aggregation, frequency of monitoring (by the per day, the return on investment can still be plan happen” with the process of continuous minute, hour, day, week, etc.) and possible measured in weeks or months. However, the demand management. Implementation of rev- recourse for a corrective action by invoking a deployment of revenue management is not a enue management awareness enterprise wide demand or supply lever. Events can be estab- panacea for generating incremental revenues is critical to ensure transparency across the lished and orchestrated for proactive decision and profitability. To guarantee ROI, a com- organization and leverage key revenue man- making. mitment is required from all levels of man- agement-related performance indicators to Demand levers include pricing actions, agement, starting with the CEO, to establish ensure that revenue plans are met by enabling promotions, sales incentives and overrides. the revenue management process and define zero latency in decision making. a Supply levers include capacity changes, roles, responsibilities and accountability for change frequency on markets served and actions taken. entering new markets. Typically, the effects To get the most out of a revenue man- of invoking a demand lever can be realized agement program requires the continuous Ben Vinod is chief innovator for immediately while supply levers are less agile, monitoring of pre-departure and post-depar- Sabre Airline Solutions. He can be and the impacts will only be realized after ture measures to provide continuous feedback contacted at [email protected].

+count it up

1843 1913 1958 Year William S. Henson, a British Year Igor I. Sikorsky, a Russian Year the Boeing 707 began the first inventor, patented plans for a steam- inventor, built and flew the first U.S. jet transport service between driven airplane that had many of the four-engine plane. the United States and Europe. basic parts of a modern airplane.

1896 1953 1983 Year Samuel P. Langley of the Year the first turboprop transport, Year a Rockwell Sabreliner became United States flew a steam powered the Vickers Viscount, began regular the first plane to cross the Atlantic model plane. airline service. Ocean with a pilot guided only by a satellite navigation system. mmmmmmmmmmmm ascend 19 By Lynne Clark | Ascend Staff

There is a gold rush in the skies over India. And it seems that every venture capitalist in the world with the requisite 444 million rupees (US$10 million) to launch a private airline wants to stake a claim. India’s new breed of aviation entrepreneurs represents businesses from breweries, distilleries and public relations companies to textile con- glomerates and billionaire families. Many are motivated by the prospects of money and glamour associated with air- lines. Many want to change the aviation world similar to the way Southwest Airlines’ Herb Kelleher and Ryanair’s Tony Ryan have done. Relaxed government regulations have opened countless All see gold on the Indian aviation horizon. opportunities for India’s air transport industry. The Sunrise Sector said Capt. G R Gopinath, managing director of to expand their fleets. In October, the govern- India is the world’s second most emerging Air Deccan. “What we are witnessing today ment raised the foreign investment limit aviation market after China. is the birth of a new industry. Aviation is in the local aviation sector from 40 percent “The country, which just 10 years ago no longer a taboo, and it is now becoming to 49 percent, and non-resident Indian had a total operating fleet of 150 aircraft an integral part of the country’s economic investment up to 100 percent is now permis- or less, suddenly led the order book at the ­development.” sible in domestic airlines without government Paris Air show in 2005 with 190 new aircraft approval. However, the government policy orders,” said Vijay Bathija, senior principal with Open-Skies Policies bars foreign airlines from taking a stake in a the consulting practice for the Sabre Airline Perhaps agreeing with Capt. Gopinath and domestic airline. Solutions® business. other industry observers, the Indian govern- During the past 12 months, India has Fueling the orders is a perfect storm ment last September implemented aggressive signed a number of open-skies agreements, of opportunity created by the simultaneous policy changes and bilateral air service agree- signaling its readiness to modernize aviation ­relaxing of government policies on foreign ments with more than 15 nations including the policies. Already, the Indian government’s new equity ownership, new open-skies policies, United States and the United Kingdom, almost openness is showing results, including: rising income levels among a growing Indian instantly increasing the number of flights into Bilateral pacts with Sri Lanka and Singapore; middle class and an unexploited potential in and out of India. Granting multiple-carrier status to Indian air- India’s tourism. Soon after, the government cleared an craft by three Association of Southeast Asian “I didn’t need a McKinsey [& Company almost 14-year request by the two state- nation countries — Singapore, Malaysia and consultant] to tell me there’s a market here,” owned airlines, Air India and Indian Airlines, Thailand;

SpiceJet photo by Joe G. Walker/MyAviation.net; Jet Airways photo by M Radzi Desa/MyAviation.net; Kingfisher Airlines photo by Torben Guse; /MyAviation.net; AirDeccan photo by Jan Kertzscher/PlanePictures.net; GoAir photo by Olav Rhensius/Propfreak Collection Allowing low-cost airlines from these ASEAN countries to enter India; Beyond the Core Business Permitting private Indian airlines with five years of flying experience to fly to all global Airline Owner Business destinations except the Gulf. Until now, private local airlines were only allowed to Air Deccan Captain G R Gopinath Helicopter charters operate within the country. Kingfisher Airlines UB Group Breweries/distilleries Key Players Clearing skies have cleared runways for more IndiGo InterGlobe Enterprises Global travel technology planes in India. State-owned and private air- lines are vigorously expanding their fleets, and SpiceJet Royal Holding Services Royal Airways/Kusagra family foreign players are rushing in to stake their claim in the Indian aviation goldmine. GoAir Bloomberg Dyeing Textiles Currently, liveries from 19 carriers cross the skies over India. With the exception of Air India and Indian Airlines, newcomers are all Some of India’s carriers are capitalized by successful businesses in other industries. privately held. The financial strength, powerful leadership and well-known brands of these companies With its recent acquisition of Air Sahara, ­provide the initial stability many start-up airlines lack. Jet Airways has emerged as one of the ­strongest and largest domestic carriers in the country, with nearly 50 percent domestic share. “Jet Airways just recently started inter- special promotional fares at virtually half the taxi operators and later converted to scheduled national service,” Bathija said. “While it is still price of a railway ticket to many destinations. operators. However, due to either the restric- losing money in the international circuit, it is Air Deccan’s phenomenal growth tive route policies or level of funding, many well-positioned for the future. Scale matters, spurred the entry of nearly a dozen low-cost carriers folded. This time, the market is much and Jet Airways is the largest private carrier carriers in India, and it faces stiff competition more enthusiastic, and the operating environ- with rights to international destinations and a from Kingfisher Airlines, SpiceJet and GoAir. ment is much less restrictive. The chance of strong domestic network.” “The new challenger on the scene is success for many carriers is much greater this Among low-cost carriers, Air Deccan the colorful Kingfisher Airlines,” said Bathija. time around.” remains the leader. The country’s first “no-frills” “Modeled on the international Virgin Atlantic, Of course, the success of newcomers airline is a business unit of Deccan Aviation it is growing rapidly and has achieved almost and established carriers depends on whether Private Limited, India’s largest private heli- 6 percent of the domestic market share within the Indian government follows through on charter company. a few months of operation.” promises to further liberalize the aviation mar- “We were already successfully into the Kingfisher Airlines is a wholly owned ket and improve the quality of airport infra- business of chartered flights where we got subsidiary of United Breweries Holdings structure. (See related article on page 40.) a lot of calls from people wanting to go to Limited, the UB Group’s investments hold- “Infrastructure is a major concern,” said destinations that were unconnected,” said ing company. The UB Group is one of India’s Bathija. “While plans are being developed to founder Capt. Gopinath, a former captain in largest companies with revenues of 87 billion upgrade facilities or lay ground work for new the Indian Air Force. “This started the initial rupees (US$2 billion) and is the largest Indian airports, the lead time for these plans to come thought process. Our country is vast, the infra- manufacturer of beer and liquor. Based in to fruition is very long. The good news is that structure is poor, air connectivity is bad; all Bangalore, Kingfisher Airlines is India’s first the government realizes that capital is required these factors were considered. I realized that and only private airline to receive the pres- and is moving fast to privatize major airports. if anybody needed low-frill aircraft, it was India.” tigious “New Airline of the Year” award in “A skilled labor shortage, particularly for Combining Southwest Airlines and 2005 for Asia/Pacific and the Middle East from cockpit crew, is also a challenge carriers must Ryanair business models, Air Deccan began the Centre for Asia Pacific Aviation within six face,” Bathija continued. “Kingfisher Airlines is operations in August 2003 with one aircraft months of commencing operations. opening its own pilot training academy. So and one regularly scheduled flight a day from while there will be some growing pains, I am Bangalore, India, to Mangalore and Hubli, India. Who will Survive? confident that growth will continue. There will Today, it connects 44 cities with 180 flights to With many of the nation’s newcomers in the be consolidation successes and failures. destinations throughout India. start-up phase, it’s too early to predict who the However, I expect the total supply of seats to The cornerstone of Air Deccan’s aggres- survivors will be. continue growing and demand to keep pace.” a sive growth is rock-bottom fares to attract rail- “This is the second round of aviation lib- way passengers to upgrade to air travel. During eralization in India,” Bathija said. “In the early Lynne Clark can be contacted at the past few years, the carrier has offered 1990s, private carriers started services as air- [email protected]. 22 ascend mmmmmmmmmmmm industry

The in Place to Outsource

India’s tremendous growth in air travel, liberalized government policies, and significant regional demand for aviation products and services has some of the world’s most prominent companies and airlines outsourcing to India.

By Shail Maniar | Ascend Contributor

mid roaring jets over the skies of Highlight operations and back-office support business Bangalore, India, the information tech- process outsourcing services. The leading Anology hub of India and home of state- BPO company has been highly focused on run aviation major Hindustan Aeronautics Ltd., For India to play a operating and managing critical business pro- the country signaled its desire to emerge as a cesses in the travel, insurance and financial major aviation outsourcing destination in the formidable role in the services domains. In 2005, WNS upstaged presence of more than 350 aerospace firms at Wipro Spectramind from the top spot among the Aero India 2005 air show. India’s back-office and call center companies. This claim is supported by a recent con- aviation outsourcing vergence of key catalysts for the Indian aviation Strengths and Weaknesses industry: an escalating domestic travel market, business, the country To succeed in India and offer a range of prod- favorable aviation policies by the current Indian ucts and services domestically and to regional administration, and a large domestic market must grow in every travel and transportation businesses, the cur- for aviation products and services fueled by rent crop of providers will need to be flexible a spurt of new domestic start-up airlines. For aspect of the industry and quick to market. The boutique players such India to play a formidable role in the aviation as Kale Consultants and SkyTECH Solutions outsourcing business, the country must grow — services, products that focus on a limited portfolio of products in every aspect of the industry — services, and services seemingly have an advantage: products and manufacturing. and manufacturing. Investment dollars to be spent across fewer products, resulting in a richer functional History and Evolution offering,

Traditionally, Indian companies in the aviation Hindu John/The Shaju by Photo outsourcing business were limited to offering contract information technology services to regional airlines primarily in the areas of host development and back-office revenue account- ing services. The key driver was availability of a large, inexpensive and skilled work force, positioning India as an IT services provider in the early to mid 1990s. The year 2000, or Y2K, created a huge one-time demand in India for host development and maintenance services primarily for airlines, which were highly sus- ceptible to the millennium bug. This enabled many Indian companies to establish relation- ships with airlines’ chief information officers in the region and solicit additional business after the turn of the century. With no market for products and ser- vices in the local domestic India market, the growth in aviation outsourcing was limited to IT and business process outsourcing services. WNS is one business that has been very suc- Leading global companies have outsourced parts of their business to provide improved cessful in making scale matter in customer customer service as well as remain geographically convenient to their customers. contact, passenger revenue accounting, and mmmmmmmmmmmm ascend 23 industry

Aviation Outsourcing in India

These companies are rapidly transforming from offering services to building a healthy travel and transportation product portfolio.

Company Profile Based Major product offerings

Kale Consultants Incorporated in 1986, India public offering in Mumbai Passenger and cargo revenue accounting, 1999 air cargo management, BPO services, ­consulting Bird Information Part of the The Bird Group — a conglomer- Gurgaon Reservations system, Web-based hosting for Systems ate of companies — RDM, Amadeus (India), low-cost carriers, BPO solutions Arvato Services India IBS Group Initiated operations in 1997, acquired Trivandrum Reservations system, flight management, TopAir in 2002 and Avient Solutions from staff travel management, operations control, Honeywell in 2003 crew management, airport operations, cargo management

These businesses are consolidating their positions as global providers of IT solutions and services for the travel and transportation industries.

Company Profile Based Service offering

Hexaware Technologies Formed in 1990. India public offering in Mumbai Outsourcing of application development and 2001. Merged with Aptech Software in 2001 maintenance, host development services WNS In India since 1996. Formerly a subsidiary of Mumbai Customer contact, passenger revenue British Airways. Private global equity inves- accounting, operations/back office support tor Warburg Pincus owns a majority stake. Ranked the No. 1 BPO firm in India InterGlobe Established in 1998 as a JV between Gurgaon IT services — development/maintenance, Technologies InterGlobe Enterprises and Cendant Corp. loyalty program management, IBE BPO Services — customer contact, fares management Aviation Software Wholly owned subsidiary of Tata Chennai End-to-end solution development primarily in Development Consultancy Services, Ltd. Originally formed mainframe environment, business consulting Consultancy India, Ltd. as a JV between TCS and Singapore Airlines and application maintenance Tata Consultancy In India’s top 3 IT services company. Public Mumbai Consulting, IT services (host development), Services offering in 2004 BPO

These foreign entrants are establishing global development and delivery models in India.

Company Profile Based Major product offerings

SkyTECH Solutions U.S. based and formed in 1999. JV between New York, Flight scheduling, drug/alcohol testing, United Airlines and The Chatterjee Group. New York ­aircraft/engine health management, airport Marketing rights to jointly develop/market/ (Kolkata) resource management, gate assignment/ customize UAL’s flagship aviation products planning globally. Sabre Airline Solutions Initiated operations in March 2005 Southlake, Texas Global development, delivery and research (Bangalore) Boeing U.S. civil and military aircraft manufacturer Seattle, Will source US$1.9 billion of aerospace sys- Washington tems work, maintenance and overhaul facil- ity in India Build a pilot training school in India Accenture Global management consulting, technology Minneapolis, Customer contact, passenger revenue services and outsourcing company. Wholly Minnesota accounting, operations/back office support owns Navitaire (formerly Open Skies of HP) (Bangalore) IBM Global services business focused on the White Plains, IT services for travel and transportation airline vertical New Jersey Consulting and integration services (New Delhi) 24 ascend mmmmmmmmmmmm industry

Flexibility to provide fully customized Highlight frequency ID-based baggage tag systems be solutions to a customer, resulting in a solu- developed in India in the near future? There tion that will likely work for contracted is a high probability of this happening sooner customers, Customers expect than later. Excellence in a particular domain, resulting in Indian IT outsourcing leaders — Infosys best-of-breed offerings. a one-stop shop for and Wipro — are scratching the surface to On the flip side, challenges remain in provide services to travel and transportation marketing their products and services glob- solutions that integrate businesses. Both have enormous economies ally — strengthening their sales and marketing of scale, global presence and marketing reach. teams, increasing global support capability and well within their Between them, they efficiently run the IT “thinking big” would certainly be near-term infrastructure of some of the largest insurance objectives. offering and meet and banking institutions in the world. There is Customers expect a one-stop shop for no doubt they will succeed in the travel and solutions that integrate well within their offer- ­transportation industries. Traditionally, major ing and meet their customers’ needs. The their customers’ needs. global travel companies have outsourced to value proposition of offering a limited prod- U.S. IT service providers, such as IBM and uct portfolio is weak. In addition, customers EDS. The future could see the same travel expect some level of consulting services to Jet Airways and Kingfisher Airlines and a surge companies outsourcing data centers, desk- be bundled with product offerings, enabling of new low-cost carriers, both airline busi- tops and key back-office operations to Indian domestic and regional carriers to better realize ness models will demand newer and more IT leaders. return on investment of their IT spend and gain flexible ways of using technology for their Accenture currently has 25,000 employ- access to best business practices from mature businesses. ees in India, China and the Philippines, and it aviation markets. The Indian government has already made plans to hire an additional 25,000 during the a decision to privatize New Delhi and Mumbai next two to three years. Accenture is a classic Future Trends — Innovation airports, and the remaining metros Chennai example of leveraging global marketing and and new Competitors and Kolkata will follow soon depending on the sales strengths with a delivery structure (cost, Local Indian companies focused on servicing success at the first two airports. New airports scale and efficiency) based in India. Coupled the travel and transportation sectors, such are currently being built in Bangalore and with a very strong IT consulting practice, as Kale Consultants and The IBS Group, will Hyderabad. Foreign IT companies specializing Accenture is positioning itself to be a formi- continue to broaden their product offerings. in airport automation could potentially partner dable player in the aviation space. Innovation and investment into new tech- with local counterparts in India to outsource Aviation outsourcing in India took a nologies and products will likely be their key the automation for these airports, which offer huge leap up the value chain when The growth drivers. With a domestic market led by considerable business potential. Will the next- Boeing Company agreed to outsource aero- world-class, service-oriented airlines such as generation biometric check-in systems or radio space systems works valued at US$1.9 billion to India during the next 10 years. The U.S. aerospace firm is also committed to set up an India-based maintenance and overhaul facil- ity as well as a pilot training center. Boeing made the decision under a counter-trade agreement between New Delhi and Wash- ington, D.C., whereby Air India agreed to purchase more than 60 aircraft. This is an emerging business in India and faces tough competition from established players such as China and Japan. Airbus is also looking at various options of leveraging India as one of the largest aero- nautical complexes in Asia, with total capacity to make and maintain a wide array of civilian and military aircraft and avionics. State-run Hindustan Aeronautics will play a key role in exporting and supporting aerospace systems development in India. India is well on its way to becoming a powerhouse in offering aviation products and services to global customers. However, the road to being an aviation manufacturing hub is littered with challenges, such as infrastructure, logistics and competition from China. a

Photo by D. Gopalakrishnan/The Hindu Shail Maniar is managing director for Infosys, one of India’s top outsourcing companies, benefits from a rapidly maturing outsourc- the Sabre Airline Solutions business ing industry, with a recent 21 percent boost in profits. in Bangalore. He can be contacted at [email protected]. mmmmmmmmmmmm ascend 25 открытый geöffnet aperto 打開 abierto aprire Open ouvet for Business

By Billie Jones | Ascend Contributor

Relaxed regulations in India open opportunities for the region’s airlines to expand their reach through alliances and partnerships. Photo by Christoph Ermel/iStockphoto.com Photo by SK Desai /Wikipedia

was a liberating year for ing up more capacity for business people ers began operations and many more are on aviation in India. and tourists from the United States to visit the horizon. The liberalized India marketplace Liberalized business practices in the India and more Indians to visit the United could also lead to acquisitions and mergers second most populous country in the world States. Carriers have already reacted to the that would further change the industry. The are already creating unprecedented expansion new rules. For example, Continental Airlines Jet Airways/Air Sahara merger, for example, in India’s civil aviation, including opportunities and American Airlines began non-stop ser- ­positions the combined carrier in both domes- for carriers to integrate with the worldwide vice between New Delhi, India, and U.S. tic and international markets. International airline network. India is rapidly liberalizing its destinations late last year. Delta Air Lines ­carriers, such as Jetstar Asia, started interna- business practices with bilateral agreements expanded service to India, adding Chennai. Air tional low-cost flights from Singapore to Kolkata for economic trade. Information technology India added Chicago, Illinois, and Los Angeles, and Bangalore, India, while British Airways was the first sector to take off. The telecom California, to its routes, and Jet Airways and increased weekly flights from 19 to 35, and sector, which the Indian government deregu- Air Sahara — which has been purchased by Air France has added service into Bangalore. lated a few years ago, was the second. The Jet Airways — have plans to start service to In 2005, Air India added several internation- Indian civil aviation sector promises to be a the United States through Europe. al routes, for example, London Heathrow, third “thrust” sector of the Indian economy, Last year, four domestic low-cost carri- Birmingham and Frankfurt in Europe; Seoul, largely because of the steps taken to open it to competition. Domestic India Markets Share Trends In 2005, new air transport accords re- placed antiquated agreements that placed Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 restrictions on services between countries. 60% These restrictions included limits on cities that could be served and pricing. An open-skies agreement with the United States, replacing 50% agreements signed in 1956, provides for open routes, capacity, frequencies, designations and 40% pricing, as well as opportunities for cooperative marketing arrangements, including codesharing. This liberalization of aviation business 30% practices has created a huge expansion of mar- ket demand. International and domestic carri-

ers are already taking advantage of these new Market share 20% opportunities. India’s domestic markets make up 60 percent of its market demand. Domestic low-cost carriers are growing to satisfy this 10% increase. New market entrants Kingfisher Airlines and SpiceJet have already grabbed mar- ket share and show no sign of slowing down. 0% Internationally, the new bilateral agree- ments have allowed India’s international de- parting seats to rise by 16 percent year over Jet Airways Air India Air Deccan Indian Airlines Kingfisher Airlines Air Sahara Spice Jet year (average six months from June through Jet Airways continues to be India’s domestic leader in market share although the November) while international passenger demand ­liberalization of the market has lead to the launch of new carriers that have cut into for the same period has risen by 14 percent. its lead. New entrants such as SpiceJet and Kingfisher Airlines have combined to quickly The new accord with the United States grab more than 10 percent of the market in the last year. is already having a multiplier effect by open- mmmmmmmmmmmm ascend 27 industry Photo by Mohammed Yousuf/The Hindu Yousuf/The Mohammed by Photo Korea, and Kuala Lumpur, Malaysia, in Asia; and Toronto, Canada. This liberalization of business practices has opened the door for increasing alliance memberships and codeshare opportunities as well. Alliance partnerships have the potential of shifting positive market share. Air India has codeshares with Swiss International Air Lines, Austrian Airlines, Asiana Airlines, Singapore Airlines, Air France, Aeroflot Russian Airlines, Emirates, Kuwait Airways, Air Mauritius, Malaysia Airlines, Lufthansa German Airlines, SilkAir, Turkish Airlines and Thai Airways. Indian Airlines has limited codeshares with Gulf Air and SriLankan Airlines. Air Sahara started a codeshare agree- ment with American Airlines in November. “We are looking at a global footprint spanning Europe, the United States and South- east Asia,” said Air Sahara President Ronojoy Dutta. The two carriers have created a seam- less connection from 25 major cities in India to 125 cities in the United States, through their Delhi and Chicago hubs. By combining strategic schedule adjustments in top connect- Liberalization of business practices in the aviation arena has presented opportunities for an ing markets and increased screen presence, increase in alliance memberships and codeshare agreements, which have potential to drive Air Sahara will increase load factors and mar- up market share. Indian Airlines is one of many carriers in India taking advantage of these ket share. relationships, with codeshare agreements with Gulf Air and Sri Lankan Airlines. Air Sahara’s 23 connecting flights from New Delhi to destinations across India will carry American Airlines flight numbers, which will to focus on managing schedules, fares and generate significant revenue and reduce oper- provide greater choice of connections between inventory across the network rather than on a ating costs. the two countries. The agreement would not flight-by-flight basis. In addition, the Sabre® Fares Manage- only lead to both airlines jointly selling each State-of-the-art technology supports air- ment Systems monitor both domestic and others’ tickets on their India-U.S. network, lines’ strategic planning and enables them to international pricing activity and provide pric- but would also place each others’ flight codes carry those plans through to day of operation. ing analysts the tools to identify and analyze in their respective services on the sector. Air The Sabre Airline Solutions® business also has pricing changes. From a revenue management Sahara is also hinting at the possibility of join- a variety of tools to help airlines better manage perspective, the Sabre® AirMax® Revenue ing a global airline alliance. their networks. The Sabre® AirFlite™ Planning Manager has the capability to forecast de- How will Indian carriers leverage these and Scheduling Suite seamlessly integrates mand at the O&D level and create optimal factors to their advantage? The key to man- core flight scheduling functions such as sched- inventory levels for the entire network. The aging rapid change is the effective use of uling, profitability forecasting and analysis, Sabre® AirMax® Availability Processor System airline best practices and technology. The fleet assignment, and slot management with supplements an airline’s reservations system airline industry has honed its planning and shared interfaces and database information. to evaluate reservations requests by the net- scheduling practices through the use of opti- This integration improves forecast perfor- work value of the O&D city pair rather than on mization models. Airline best practices quan- mance and accuracy and reduces turnaround a leg-by-leg basis. The AirOps suite ensures tify market opportunities, measure the impact time, resulting in a flexible, stable and efficient these plans are carried out through day of of competitors’ changes and enable carriers tool. operation. to respond quickly to their rapidly changing The integration of scheduling and the Liberalization and change creates oppor- environment. Through the integrated use of Sabre® AirOps™ Suite supports dynamic control tunities to penetrate new markets and gain schedule management and operations tools, of schedule changes to ensure optimal sched- market share in existing ones. Advanced tech- airlines optimize their origins and destinations ule performance. An airline must continually nology and business practices enable airlines and maintain their optimized strategy through decide which markets to serve and how often, to manage this opportunity. The right tools day of operation. As airline networks grow, when to fly and which type of aircraft to assign managed properly enable them to visualize scheduling, pricing and revenue management to a specific route. It also needs to track slot their strategies as well as manage their sched- activities become more complex. Adding des- rights as well as evaluate the profitability of ules, markets, fares and inventory and react tinations to a network increases the potential various scheduling alternatives and codeshare quickly in the rapidly changing worldwide land- O&Ds for sale geometrically, making it much opportunities to stay ahead of the competition. scape of airline service. a more difficult to keep track of competitive When an airline environment is changing rap- changes. The potential exists for low-fare idly with new entrants, codeshares, alliances local passengers and international connecting and mergers and best practices, innovative Billie Jones is a senior consultant passengers competing for the same inven- tools provide critical advantages over com- for the consulting practice at tory on a flight. To realize the full potential of petitors. The AirFlite suite supports all planning Sabre Airline Solutions. She can be large, highly diversified networks, airlines need and scheduling functions and is designed to contacted at [email protected]. 28 ascend mmmmmmmmmmmm industry

On Track

Despite the emergence of low-cost airlines in India, Indian Railways’ passenger traffic and earnings continue to rise, making rail a strong competitor to the air transport industry.

By Lauren Lovelady | Ascend Staff

or every passenger who boards an air- rail passengers, who account for about 20 est rail system in the world, as well as the plane in India, more than 300 passengers percent of rail’s revenues. Perhaps for the first biggest employer. For decades, rail has been F board trains. At first glance, these sta- time in its more than 150-year history, India’s the country’s principal mode of passenger tistics seem like a windfall for the country’s rail system is facing direct competition. and freight transportation, playing a key role centrally managed rail system, but in fact, they Rail service was introduced to India in the economic and social development of show the enormity of the potential air travel in 1853, and by 1947 — the year of India’s the country. More than 60,000 kilometers market. And, recently launched low-cost air- independence — there were 42 separate rail of track and 8,000 trains carry more than lines are stepping in hoping to lure this market systems. In 1951, the systems were brought 13 million people each day throughout all into discovering the benefits of flight. In par- together into a single state-owned company, parts of the country and to neighboring Nepal, ticular, they are targeting India’s upper-class Indian Railways, which is the second-larg- Bangladesh and Pakistan.

Rail Versus Air Fare Comparison Rail classes Airline/rail Full fare Promotional/discount Rail first A/C 4,175 rupees NA

Rail second A/C 2,210 rupees NA

Rail third A/C 1,485 rupees NA Full-service Airline/rail Full fare Promotional/discount Indian Airlines 8,685 rupees 3,965 rupees

Jet Airways 9,800 rupees 4,000 rupees

Air Sahara 8,000 rupees 3,888 rupees Low-cost Airline/rail Full fare Promotional/discount Air Deccan 3,550 rupees 2,828 rupees

SpiceJet 3,650 rupees 2,250 rupees

Kingfisher Airlines 3,960 rupees NA

Although rail remains the dominant mode of transportation in India, fares offered by low-cost carriers may soon begin to attract passen- Photo by Bijoy Ghosh/The Hindu gers, particularly those traveling in first- and second-class air condi- For 150 years, rail service has been the most common means of tioned rail cars. The three-week advance purchase fares on low-cost travel in India, but the increase of low-cost carriers in the country carriers from Delhi-Mumbai, for example, are comparable to those and a much-improved economy presents enormous opportunities offered by rail in premium classes. to convert these rail passengers to the air. mmmmmmmmmmmm ascend 29 industry

Rail stations in India serve 13 million passengers each day to various parts of the country and to neighboring countries. Photo by Lazyoldsun, Creative Commons Creative Lazyoldsun, by Photo

Air-conditioned express trains, intro- Despite plunging air fares, some will never be frequent traveler programs in specific markets, duced as an alternative to once prohibitively able to afford the price of an airline ticket. as well as a passenger profile management expensive air travel, connect most major cities. Others will have no interest in experienc- system. The railway has utilized computerized The majority of rail passengers, however, trav- ing the unfamiliar. And for many people, it’s a reservations centers throughout the country el in overcrowded and sometimes outdated matter of convenience. For example, an hour- for the past few years. In addition, timetables lower-class carriages. For most of India’s pop- and-a-half train or bus ride may be required to are being modified, food and beverage ser- ulation, rail is the least expensive and most reach the nearest airport from a remote village, vices enhanced, routes extended, and frequen- popular mode of transportation. But that is all followed by an average one- to two-hour wait at cies to popular destinations increased. In direct changing. the airport to check in, clear security and board response to time savings gained by air travel, The recent emergence of low-cost the aircraft. After a two-hour flight, another the speed of trains on some routes will be carriers is placing air travel within reach of hour-long train trip to the final destination is accelerated. Low occupancy trains and desti- thousands of middle-class Indians eager for required for a total of five-and-a-half to six-and- nations will be eliminated. And approximately alternatives to a sometimes congested and a-half hours. The same trip via train may take 2,500 special trains, many to popular tourist unpredictable rail system. Perhaps more impor- seven hours, but the majority of cities, towns destinations, will run this year. tantly, these airlines are stimulating economic and villages have centrally located train sta- As an integral part of India’s past and growth and development by focusing services tions with easy access to neighborhoods and present culture and economy, the country’s rail on secondary cities and towns with airstrips businesses. Getting from point A to point B system is not likely to disappear despite the that have gone unused since the end of may take longer, but it’s not nearly as complex. challenges it currently faces internally and World War II rather than the country’s handful What it does mean is that India’s rail externally. Even with the upstart of several of crowded, big-city airports with established system must upgrade and reposition itself low-cost carriers last year, Indian Railways’ carriers. to effectively compete in the 21st century. passenger traffic grew by 10 percent and its The results are encouraging. Due to Under increasing pressure to invest in im- earnings by 12 percent. The good news, there- increased accessibility, these secondary loca- proving and modernizing Indian Railways’ fore, for both the rail and air travel businesses tions are now being evaluated with interest infrastructure, the government recently allo- is that India’s transportation sector is experi- by businesses desiring to expand or relocate cated a special fund of 133 billion rupees encing extreme growth in passenger demand from overpopulated areas. With fares as low (US$3 billion) to help renovate decaying tracks, fueled by a developing economy. More than as 487 rupees (US$11), passengers can fly rebuild bridges and update a manually oper- ever, this vast nation of more than 1 billion to these destinations once only accessible by ated, outdated signaling system, which has people is on the move, and its citizens now train, arriving in a fraction of the time. been blamed for a number of accidents. have more choices than ever before for getting Does this mean India’s rail system is Progress has been slow, but the appearance to their destinations. a destined to become obsolete? Not likely. First, of low-cost carriers with competitive fares may it’s important to realize that the majority of prove to be the catalyst needed to jump start India’s population will most likely continue this enormous project. to utilize the rail system as its primary mode On the customer-service front, Indian Lauren Lovelady can be contacted of transportation for a number of reasons. Railways is exploring electronic ticketing and at [email protected]. 30 ascend mmmmmmmmmmmm industry

The Complete Package: India’s Cargo Industry

With 60 percent of India’s cargo handled through ground transportation, air freight companies are poised to take a greater slice of the country’s cargo market.

By Mukundh Parthasarathy | Ascend Contributor

teel. Oil. Produce. Automobiles. Livestock. India, is significant, though India’s share in the How does India compare with China’s air cargo Clothing. Electronics. If it can be sold, world trade remains relatively small. Open- segment? The jury is still out. Sit can be shipped. A broad range of skies policies among countries and the elimina- In 2004, the total Indian cargo market imports and exports keeps India’s cargo busi- tion of quotas in the textile sector will further was about 1.2 million tones while in the ness thriving. Today, 30 percent of the value fuel growth in the cargo market. same year, Hong Kong airport generated 3.1 of the country’s international trade moves The air cargo potential in India shows million tones, Shanghai 1.9 million, Beijing by air, giving air transporters a significant much promise: 662,000 and Guangzhou 632,000. On the opportunity to tap into India’s cargo industry. It has grown at a rate of about 12.4 percent whole, China’s airports generate six times the With liberalization, removal of export/ a year during the last 10 years (domestic and tonnage of Indian airports. import controls and a buoyant economy, international — growth by volume). For air freight volumes, the standard India’s air cargo business is flourishing and set It has a current growth rate of 18 percent. for emerging markets is that air freight should to grow by 10 percent annually. All parameters Its growth rate year over year in 2006 is grow twice that of the national gross domestic point to a favorable future due to the height- expected to reach 20 percent. product. While the Indian economy is growing ened capabilities of Indian manufacturers to Its air freight traffic is expected to double by compete with others and an improvement in 2010, and the four metros (Delhi, Mumbai, World Air Cargo quality and delivery schedules. Export/import Chennai and Kolkata) will handle twice the Market Percentage volumes are likely to rise by 12 percent to 15 tonnage. percent during the next couple of years, which, Talking about India leads to an inevitable India according to Air Cargo Agents Association of comparison with the other Asian giant, China. 4.5%

Rest of the world 95.5%

100% = US$200 billion

World ranking of India’s airports based on air cargo traffic: Mumbai...... 58 Delhi...... 70 Chennai...... 120 Kolkata...... 168

India currently makes up only 4.5 percent of the total global air cargo market, indicat- ing considerable untapped potential for cargo traffic. No Indian metro airports even

Photo courtesy of Hong Kong International Airport rank in the top 50 in the world based on While Air India’s cargo operations have contributed to the overall success of the country’s air cargo traffic, whereas two other Asian freight business, they stand to face fierce competition from new local competition as well airports — Hong Kong and Tokyo — are as from DHL, British Airways World Cargo, Singapore Airlines Cargo and Thai Cargo. among the top five. mmmmmmmmmmmm ascend 31 industry

Air India’s Cargo panies gain prominence, resulting from low- Highlight Market Share cost framework and abundance of well-trained scientists. Share of Air India in the air cargo Export/import volumes market in India (FY 2004-05) Key Players Air cargo has moved from a monopoly to a are likely to rise by competitive industry in recent years. Growth in Air India air freight services has been attracting various 12 percent to 15 10% new and existing airlines. Apart from the two national carriers, Indian Airlines and Air India, new entrants such as GoAir and Kingfisher percent during the next Rest of Airlines have proposed playing a bigger role in the players the Indian air freight market. This is after Blue couple of years, which, 90% Dart Aviation had, for several years, been the country’s sole dedicated cargo airline, operat- according to Air Cargo ing for its parent courier company, Blue Dart Share of cargo revenue in the Express. Agents Association of revenue for Air India (FY 2004-05) Air India is still India’s major air carrier, but its position is threatened by new entrants India, is significant ... as well as the aggressive strategy pursued by Cargo international carriers flying in and out of India. 10% Major global air cargo carriers seek to tap the Indian market, and there has been a surge in Indian Government’s Role interest since last year: The rapid growth of air traffic in India and its DHL, which has taken control of Blue Dart, insufficient airport capacity is prompting the Other intends to emerge as the largest logistics Indian government to further deregulate its 90% and express cargo provider in India. civil aviation policy. The measures taken by the British Airways World Cargo plans to make government to boost growth include abolition Mumbai and Delhi its mini hubs for Asia, of the national carrier monopoly and continued Air India, which has 10 percent of the expecting to double capacity and revenues expansion of open-skies policy. This provides Indian cargo market, receives 10 percent of from India. incentives that attract many foreign airlines its revenues from transporting freight. Both Emirates SkyCargo and Korean Air Cargo and stimulate creation of new private carriers. figures may come under pressure as more entered into a codeshare agreement for The government, in a move to create cargo operations enter the market. cargo capacity on two key routes — to Delhi favorable conditions for national and foreign and Mumbai. airlines, has decided to abandon its high-tariff Singapore Airlines Cargo plans to increase regime and reduce landing fees by 15 percent. at 7 percent, the cargo traffic volumes at the services to India by almost tenfold. To aid regional airport development, it has three largest Indian airports — Delhi, Mumbai Thai Cargo plans to expand services to waived landing fees for aircraft carrying less and Chennai — grew by just 7 percent com- India. than 80 passengers. Travel tax has been abol- pared to the world average of 5 percent, based on volumes from 1995 to 2004. Looking at the traffic growth between From Monopoly to Competition Competition stage the major airports in India, only Chennai has been growing at an average of 10 percent while National carriers Indian Delhi and Mumbai grew by less than 6 percent. Airlines and Air India are Oligopoly stage ramping up their cargo Key Contributors to Growth activities. Burgeoning trade in pharmaceuticals, textiles, Air India reentered the New entrants such as gems, jewelry and perishables are key growth air cargo space. Monopoly stage Jet Airways, GoAir and drivers in India. Indian Airlines also Kingfisher Airlines plan Surging exports from sectors such as Air India exited the cargo started air cargo to capture a significant textiles, pharmaceuticals and fast-moving con- market during mid 1990s operations. share of the air freight sumer goods have improved India’s air cargo due to losses. market. business. The sector is growing at a rate of For several years, Blue 20 percent annually in terms of volume. The Dart Aviation was India’s Many global players export/import policy 2004-2009 of the Indian sole dedicated cargo such as British Airways, government has set a target for the sector to airline. DHL, Singapore Airlines, improve its share in total global trade from the Emirates SkyCargo, current 0.8 percent to 1.5 percent. Most cargo movements Korean Air Cargo and Half of India’s air freight exports and took place in the belly THY Cargo are very keen imports are related to the textile industry of passenger aircrafts. on India. — consumables and machinery going in, cloth- ing and footwear coming out. A huge upside As the Indian government relaxes restrictions in air transport, the cargo industry will move is predicted in the growth of healthcare-relat- from a pure monopoly to a more open-competition environment. ed shipments as Indian pharmaceutical com- 32 ascend mmmmmmmmmmmm industry

ished, and the excise duty on aviation fuel has This will depend on the new passenger capac- whereas large metro airports such as Mumbai also been reduced. ity hitting the market. Until a few years ago, or Chennai are bursting with traffic and becom- Air India and Indian Airlines, to facilitate only Air India and Indian Airlines were allowed ing congested. freight movement, are converting old passen- to operate international services, while foreign The need to improve existing infra- ger aircraft to cargo carriers. Both Air India and carriers were forced to make payments to Air structure at airports is increasingly being Indian Airlines are creating separate divisions India in return for traffic rights. Now that private emphasized and felt. Modification plans are for cargo. The airlines are considering leasing carriers are being allowed to fly internationally, being executed, but analysts feel that these aircraft for cargo operations. The two state- air freight rates may also come under pressure. would not be adequate in the long term. owned airlines are likely to enter the capital Cargo handling and infrastructure related to market early next year to raise funds. The air- Hurdles to Overcome movement of goods in and out of the country lines are in the process of appointing advisers Inadequate airport infrastructures (see related are limited. for an initial public offering. article on page 40), security systems and Mumbai’s Chatrapati Shivaji International outdated technology pose key roadblocks, airport, which continues to be India’s major Impact of Cargo Growth which are stifling the growth in air cargo traf- gateway for international air cargo, has two The Indian government recognizes civil aviation fic. Approximately 50 percent of international runways that intersect each other, with an as one of the pillars of economic development traffic rights remain unused under the bilat- average air cargo movement of 15 flights per and employment for the future, but it will be eral system due to airport capacity constraints. hour. The situation is so poor that the airport difficult to answer whether stronger economic India has more than 240 airports. A large num- faces congestion during certain times when growth will lead to better profits for airlines. ber of them are unused or underdeveloped, the demand exceeds capacity. The lack of

Top Drivers of Import and Export Goods in India (Values in U.S. $ Million) Export commodities April 2003 – March 2004 April 2004 – March 2005 Change Weight Petroleum: crude and products 3,568.44 6,792.14 90.34% 8.57% Gems and jewelry 10,573.38 13,705.43 29.62% 17.29%

Machinery and instruments 2,776.3 3,493.06 25.82% 4.41% Drugs, pharmaceuticals and 3,310.73 3,712.57 12.14% 4.68% fine chemicals RMG cotton (including accessories) 4,789.66 4,567.2 - 4.64% 5.76% Import commodities April 2003 – March 2004 April 2004 – March 2005 Change Weight Gold 6,516.93 10,259.33 57.43% 9.58% Petroleum: crude and products 20,569.60 29,844.10 45.09% 27.87%

Machinery (except electrical & electronic) 4,743.59 6,550.64 38.09% 6.12% Pearls, precious and 7,128.70 9,423.45 32.19% 8.80% semi-precious stones Electronic goods 7,506.18 9,739.04 29.75% 9.10% India’s Top Export and Import Destinations (Values in U.S. $ Million) Export country April 2003 – March 2004 April 2004 – March 2005 Change Weight Singapore 2,124.84 3,795.51 78.63% 4.79% People’s Republic of China 2,955.1 4,586.28 55.2% 5.79% United Arab Emirates 5,125.61 7,098.14 38.48% 8.96% United States of America 11,490.11 13,265.6 15.45% 16.74%

Hong Kong 3,261.83 3,651.33 11.94% 4.61% Import country April 2003 – March 2004 April 2004 – March 2005 Change Weight United Arab Emirates 2,059.85 4,581.96 122.44% 4.28% Switzerland 3,312.75 5,817.92 75.62% 5.43% People’s Republic of China 4,053.23 6,746.66 66.45% 6.3% United States of America 5,034.86 6,291.49 24.96% 5.88% Belgium 3,975.92 4,566.29 14.85% 4.26% mmmmmmmmmmmm ascend 33 industry Photo by Dinodia Photo Library Photo Dinodia by Photo Photo by K. K. Mustafah/The Hindu

Surging exports in various segments have improved India’s air cargo business to US$9 billion. Booming trade in certain key industries — such as pharmaceutical, gems and jewelry, dyes, machinery, textiles, per- ishables, engineering, auto parts and chem- icals — has fueled much of the growth. Photo by Suraj Shetty/iStockphoto.com Shetty/iStockphoto.com Suraj by Photo Photo by Paul Cowan/iStockphoto.com Photo by Melissa Schalke/BigStockPhoto.com Melissa by Photo Photo by Vino John/The Hindu

availability of land for further growth limits the accept advance sale of space or a neutral air scope for expansion. waybill, two important features of any cargo The India cargo industry has proposed system or portal, mainly because there is no that the second airport at Mumbai should be a legal framework for this because India is gov- cargo hub so existing cargo operations can be erned by the Warsaw Convention. shifted to the new location, which many of the After weighing all the parameters affect- country’s cargo transporters favor. Also, a mech- ing the Indian air cargo market, there is still anized transit cargo terminal is proposed to be a vast untapped potential in India, which located at the airport. In addition, there is great- currently accounts for a mere 4.5 percent er need to strengthen security check points, of the total world air cargo market while the closed-circuit television checks, security audits country moves toward becoming the third-larg- and test checks using undercover agents. est economy in the world behind the United Most of India’s systems are legacy, States and China. Indian metro airports do which do not conform to latest technology. not come even under the top 50 in the world Additionally, most systems are manual and based on air cargo traffic, whereas two other Mukundh Parthasarathy is product need automation. This is all the more surpris- Asian airports are among the top five — Hong marketing manager for cargo solutions ing given the fact that software has been Kong and Tokyo. So all signs are promising, for the Sabre Airline Solutions® India’s major growth industry during the last and there is cautious optimism about India business. He can be contacted at decade. Airlines operating into India do not becoming an airfreight hot spot. a [email protected]. 34 ascend mmmmmmmmmmmm industry

Powers to Be

The two emerging nations of China and India are drawing much attention for their potential to become economic powerhouses.

By Hans Belle and Vera Lye | Ascend Contributors

articipate at any airline industry con- the rapid growth of the non-state sector, China’s Strength ference these days, and you’d almost and the opening up of the country to foreign P always see China and India featured as trade and investment. Last year’s key moves 1.8 key topics for discussion. This is not a surprise, included the sale of equity in China’s largest 1.5 however, since corporations around the world state banks to foreign investors and refine- Merchandise exports India China are wide-eyed about the attractively healthy ments in foreign exchange and bond markets. 1.2 economic figures that come out of these According to the U.S. Central Intelligence 0.9 ­countries — and most are scrambling to get Agency World Factbook, these moves have the first cuts of the pie. resulted in a more than tenfold increase in the 0.6 There’s no doubt China and India will county’s gross domestic product since 1978.

Trillions of U.S. dollars Trillions 0.3 be economic strongholds during the coming Measured on a purchasing-power-parity basis, years, but questions still remain: Who will be China, in 2005, stood as the second-largest 0 ’02 ’04 ’06 ’08 ’10 the forerunner? How big is big? When will economy in the world after the United States, EST they fulfill all the expectations and predictions although the country still ranks lower in terms Data: Global Insight Inc. that have been made of them? What kinds of of income per capita, and 150 million Chinese ­challenges are present today? fall below international poverty levels. While China and India run neck and neck One thing is for certain, it is not going to The robust growth in economy, albeit in terms of a booming economy, China be an easy road to the top. in sporadic areas within the country, has led remains the manufacturing powerhouse to a fast-growing middle class, eager to col- over India, and it is expected to hold its top China’s Economy lect stamps in their passports and grow their position for years to come. Reforms in China started in the late 1970s with travelogues. As such, China’s travel figures the phasing out of collectivized agriculture, fol- are equally impressive. Outbound travel from lowed by liberalization of prices, fiscal decen- China is growing at high rates, and its numbers tralization, increased autonomy for state enter- are staggering. By 2020, outbound travelers India’s Strength prises, the foundation of a diversified banking from mainland China are estimated to reach system, the development of stock markets, 115 million annually, becoming the world’s 90

75 IT and service exports India China 60

45

30

Billions of U.S. dollars 15

0 ’02 ’04 ’06 ’08 ’10 EST

Data: Evaluserve

India takes the lead over China in informa- tion technology and services exports, and with each year, the gap between the two nations continues to widen. By 2010, India

Photo by Luisa Fernanda/Dreamstime.com is expected to earn nearly US$80 million in During the next decade outbound passengers from China are expected to reach 115 million these areas, while China will produce less a year, which will become the largest source of outbound tourists globally. than US$15 million. mmmmmmmmmmmm ascend 35 industry

largest source of outbound tourists. Currently, Highlight only 2 percent of its population travel out of China, according to the Pacific Asia Travel Association. In 2003, the number of Chinese ... India’s share in the world’s gross domestic overseas travelers surpassed that of Japan, making it the largest outbound market in product is set to rise from 6 percent to 11 percent Asia. In 1988, with the exception of Macau and Hong Kong, Chinese citizens could only by 2025 ... By 2025, the Indian economy is travel to Thailand. Today, more than 70 coun- tries have approved destination status. According to the World Tourism Organization, projected to be about 60 percent the size of China is among the top 10 nations for out- bound tourism. From 1994 to 2003, the total the U.S. economy ... And by 2035, India is number of outbound Chinese tourists reached nearly 100 million, at an annual growth rate of predicted to be a larger growth driver than the 13.87 percent. The opening up of China and the subse- six largest countries in the European Union ... quent flurry in tourism development has also led to growth in inbound tourism. The World Photos by Dinodia Photo Library Photo Dinodia by Photos

India’s service industry — including financial institutions, hotels, restau- rants and trade services — holds the largest portion of gross domes- tic product and accounted for about 48 percent in 2000.

Tourism Organization reports that in 2004, Economic analysts, quoted in Economy first 10 months of 2005 rose 13.5 percent from China had already risen from fifth to fourth Watch, said India’s share in the world’s gross the previous year, to 3.6 million, while tourism position in the world’s top tourism destinations, domestic product is set to rise from 6 percent earnings increased 20 percent to 229.6 billion displacing Italy. International visitor arrivals to 11 percent by 2025, while that of the United rupees (US$5.1 billion). went up 26.7 percent to 41.8 million. States may fall from 21 percent to 18 percent. “China could replace the United States By 2025, the Indian economy is projected China’s and India’s Health as the third-most visited destination soon, to be about 60 percent the size of the U.S. and Wealth with the United States just 4.3 million arrivals economy. And by 2035, India is predicted to However, it is not a rose-petaled path to the ahead of China,” according to a Centre for Asia be a larger growth driver than the six largest top. Numerous challenges confront the gov- Pacific Aviation report. “Staging the Olympics countries in the European Union, though its ernments of these two countries. In both in Beijing come 2008 will undoubtedly bolster impact will be a little more than half that of the China and India, wealth and development is these numbers even more.” Unites States. disparate, owing to the sheer largeness of India, which is now the fourth-largest each country and the relative newness of India — the Competing Neighbor economy in terms of purchasing power parity, economic development. In China, for instance, Despite shared borders and similar successes will overtake Japan and become the third major about 69 percent of the population is still rural, in recent years, India’s growth path and future economic power within 10 years, according to and most of the wealth exists in the coastal looks different than China’s. India’s economy Economy Watch. cities. is diversified — from traditional village farming Like China, the growing middle class has China’s banking system presents one to a range of modern industries and high-tech led to an explosion in travel — especially out- of the largest challenges for its government. services. The service sector is the fastest bound travel. India’s outbound tourist market A recent Deloitte & Touche report suggests growing and has the largest share in gross is now hot on every tourism marketer’s list. two critical areas that need immediate action: domestic product, accounting for about 48 Just the fact that Indians have overtaken the corporate governance issues arising from the percent in 2000. Business, communications, Japanese as the highest per diem spenders in changing legal status of state-owned commer- financial, community and trade services as well the world, averaging US$200 a day, is enough cial banks into joint-stock companies, and the as hotels and restaurants are among the fast- to bring tourism practitioners knocking on implementation of a deposit insurance system est-growing sectors. India’s doors. And this high spend is backed and necessary controls. The relaxation of government controls has by high volumes of traffic as well. In 2004, 6.2 “To ensure that the government will been a boon for foreign trade and investment in million Indians traveled abroad. achieve rapid and robust progress, China’s some areas. However, high tariffs and limits on Although still lagging in relation to out- financial system should be enhanced in a way direct foreign investment are still in place. Last bound numbers, inbound tourism is not fair- that will foster greater transparency, build inter- year, the Indian government liberalized invest- ing badly either. India’s Ministry of Tourism national investor confidence and reduce the like- ment in civil aviation, telecom and construction. reported that international visitor arrivals in the lihood of conflicts of interest,” the report said. 36 ascend mmmmmmmmmmmm industry

In India, the disparity in wealth distribu- With low-cost carriers firmly footed in the growth — a challenge that, though not insur- tion is also an issue. Almost two-thirds of its aviation scene, secondary cities are prospering. mountable, will not be simple. population still lives in rural poverty. However, In an increasingly liberal aviation envi- For all the analyses and commentaries to address the matter, India’s government ronment, foreign players are also jumping about which country will lead, there is perhaps recently passed a bill in parliament to embark on the bandwagon. Key markets such as the something to be said about cooperative suc- on an ambitious antipoverty program to help United Kingdom, Germany, France, Singapore cess — one country’s success will likely spur spread more widely the benefits of the coun- and the United States are seeing capacity the other to higher grounds. And for foreign try’s rapid economic growth. expand. players looking to these two countries for new Challenges in India’s financial infrastruc- “Strong economic growth of 8 percent, market share, there are probably synergies ture also exist. Simplifying procedures and relax- increasing international trade and enhanced and opportunities to ride both waves. India ing entry barriers for business activities is impor- destination marketing of India overseas is likely and China both represent huge opportunities tant, as is the ease with which firms are able to see continued strong demand for inbound for growth, and businesses would be remiss to enter into and exit from business activities. and outbound services,” according to a CAPA to overlook either one. a India also faces other concerns — con- report on India. trolling population growth (India is the second- Hans Belle is vice president of marketing highest populated country in the world after Who Will be the Forerunner? for the Sabre Holdings™ business in China). In terms of density, India exceeds With such staggering numbers and optimistic Asia/Pacific. He can be contacted at China since India’s land area is almost half of predictors, the challenge for China and India [email protected]. Vera Lye can be China’s total land, and developing world-class is to have supporting infrastructure match the contacted at [email protected]. Photo by Bijoy Ghosh/The Hindu Ghosh/The Bijoy by Photo Hohenhaus/iStockphoto.com Ron by Photo Library Photo Dinodia by Photo Photo courtesy of The Boeing Company Boeing The of courtesy Photo infrastructure to sustain growth in all sectors of the economy presents challenges.

In the Skies As their economies evolve, the aviation industry in both countries has taken similar flight plans. Last year, the Chinese aviation industry ordered 580 aircraft from Boeing and Airbus — propelling the two manufacturers toward a record year. The General Administration of Civil Aviation of China forecasts Chinese airlines will take delivery of 100 to 150 aircraft each year between now and 2010, according to a CAPA report about Chinese aviation. The report also indicated the country’s fleet will rise from 900 at the end of 2005 to 1,600 by 2010. Interestingly, China’s aviation industry saw more earnings in one year alone (2004) than in the entire previous decade. However, much like the other world’s airlines, Chinese airlines struggled with profitability, mostly due to high fuel prices. India was more of the same story. In 2005, international and domestic air traffic grew by 20 percent or more; at least five new carriers took to the skies, and massive fleet orders were recorded. The expansion comes not exclusively from news players — senior airlines have also been in the spending mood, In December 2005, Boeing and Air India formally announced an order agreement for 68 buying new aircraft and announcing route and airplanes, valued at more than US$11 billion at list prices. It is the single-largest commercial capacity expansion plans along the way. airplane order in India’s civil aviation history. mmmmmmmmmmmm ascend 37 industry

Making it Simple

A conversation with Bryan Wilson, project director for the International Air Transport Association’s 100 percent electronic ticketing initiative.

ince its inception in 1945 in Havana, with implementation. This was largely driven their status with respect to interline electronic Cuba, the International Air Transport by growing customer acceptance. Travelers in ticketing agreements. We intend to keep a S Association has created various stan- mature markets have seen electronic ticket- regular channel of communication with them dards, practices and procedures to provide the ing as a step forward. This, in turn, created via our 100 country managers, who have world’s travelers with safe, reliable, secure and the momentum for some smaller airlines to been well briefed on the essentials of elec- economical air service. move rapidly toward 100 percent adoption tronic ticketing. Depending on their re- Growing from 57 members to 265 span- where electronic ticketing was already being sponses, we will come back with more expert ning 140 nations around the world has been used across their sales and route networks. advice on how to move forward or help anything but simple, yet the prime organiza- But the success of electronic ticketing really where they have problems with third-party tion for inter-airline cooperation strives to bring reflects the commitment of airlines to imple- vendors. simplicity to its members through its most ment projects that are a win for themselves recent and, possibly, most influential industry (better service, lower costs), a win for agents Q: What has been the response to your initiative — Simplifying the Business. Simply (removing logistical complexity and associ- Simplifying the Business initiative across put, the project is designed to bring conve- ated costs) and a win for passengers (elimi- the industry? niences to the traveling public while keeping nating lost tickets and the need to collect A: The Simplifying the Business — StB costs to a minimum through less complex paper tickets as well as avoiding the stress of — initiative was launched with the full support practices. queues at airport ticket desks). Good products of our board of governors and annual general One of the most pressing aspects of sell themselves. meeting in May 2004. It will contribute US$6.5 the five-pronged plan is the aim at moving the billion in annual industry savings through pro- global airline industry to electronic ticketing Q: This year’s target includes achieving 70 cess change. Our industry is still relying on by the end of 2007, saving the industry up to percent electronic ticketing. What are your standards and procedures built up during the US$3 billion a year — approximately US$9 per key strategies to achieve this objective? past 50 years. Many of these consequential ticket. A: To achieve 70 percent by the end of this processes fail to embrace opportunities pro- Recently, Bryan Wilson discussed the year, we have a different type of challenge. vided by newer technologies. So StB projects progress on reaching the 2007 100 percent To a certain extent, we’ve picked the low- are designed to bring modern technologies e-ticketing goal. hanging fruit; now we’ve got to crack the into practice in ways that will simplify and more difficult parts of the electronic ticketing enhance the customer experience while reduc- Question: 100 percent electronic tick- puzzle. We have to quickly address airlines ing airline costs. eting is an ambitious target, and IATA has whose systems don’t support electronic tick- Airlines are delighted at the opportu- mapped stages to reach this goal. You eting or that have not prioritized electronic nity to lower costs and improve the customer recently announced that the adoption per- ticketing, countries with regulatory hurdles, air- experience, particularly at a time when no-frills centage for electronic ticketing had risen ports where ground handlers are choosing to carriers are not burdened by equivalent paper- from 25.4 percent to 40.7 percent, mean- ignore electronic ticketing, interline electronic based practices. ing you beat the 2005 target of 40 percent. ticketing, and, inevitably, those customers It is true that some airlines see the What was your main challenge in achieving or agents who may still be resistant to going requirement for technology change as a real this, and how was it overcome? electronic. challenge, but the vast majority recognizes the Answer: In 2005, our biggest challenge This year, we intend to build upon the need to move forward. In this day and age, was to create the awareness that the elec- relationships we have developed with the standing still is not an option. tronic ticketing challenge was a reality — that electronic ticketing managers at the 350 air- meant getting it onto the top of the to-do lines around the world that use IATA Billing Q: Many countries have government own- list at every airline. Overall, we’ve significantly Settlement Plans. We have extensive data ership or influence over airlines or airports. improved the market penetration of electronic detailing the progress carriers have made Has this created any specific issues for the ticketing as big airlines have surged forward in rolling out electronic ticketing, including electronic ticketing mandate? 38 ascend mmmmmmmmmmmm industry

A: I can think of very few examples of gov- during recent years is happening independent Q: There have been accusations that elec- ernment ownership of airlines or airports being of electronic ticketing. Some airlines, for exam- tronic ticketing only really benefits larger in itself a problem for electronic ticketing. But ple Aer Lingus, have reduced the number of airlines. Who really benefits from electronic there are several examples where government partners they have or actively prioritized some ticketing, and why? policies are a hindrance. partners over others. This is almost always A: It is certainly true that electronic ticketing There are a few countries where legisla- true for airlines in an alliance. In the last few offers huge savings to big airlines, especially tion actually requires a paper ticket to be issued months, we have certainly seen some airlines, if they have simple route networks and few to the customer for air travel. Governments such as Alaska Airlines and Air Canada, declare interline partners. But many of these big car- need to understand that allowing an electronic their intentions to only convert a fraction of riers have had to make large investments ticket to be issued and kept by the airline while their interline agreements into interline elec- in system changes as they tend not to use providing an itinerary receipt to the passenger tronic agreements. The stated reasons reflect industry system providers that can spread the should fulfill the same need. Other countries a desire to consolidate their partnerships in electronic ticketing cost across many custom- have fiscal procedures that currently make use general and a realization that it is not cost ers. So we have also seen many small airlines of paper tickets for receipts or foreign currency effective to build and maintain an IET for a low simply upgrade to the electronic ticketing control. Some require the ticket for security volume of customers. versions of their passenger service systems procedures at airports. We believe there are At IATA, we assess that airlines could and roll out electronic ticketing very quickly fairly simple workarounds for these problems. still carry the vast majority of their existing and cheaply. Both groups are very happy with However, airlines, regional airline associations interline passengers with only a small portion electronic ticketing — and their customers and and IATA have to make the right representa- of their interline partners. The 80/20 rule seems agents are even more delighted. tions to governments. The key argument is that if the rest of the world is moving to 100 percent electronic ticketing, why can’t this Highlight country as well? At airports, our primary concern is where a government is backing a single ground han- ... our biggest challenge was to create the dler that is only using a departure control system that does not support electronic ticket- awareness that the electronic ticketing challenge ing. During the course of this year, IATA will be working with those airports to ensure that was a reality — that meant getting it onto flights can continue to be handled to the satis- faction of airlines and passengers. the top of the to-do list at every airline.

Q: Where can airlines and ground han- dlers go if they need help achieving IATA’s ­mandate, and what has IATA done to to apply. If airlines choose to only implement For airlines running their own systems, ­support them? IET agreements with their preferred partners, and especially those that are smaller and have A: Airlines and ground handlers are offered they will still support the majority of the inter- not maintained a regular stream of upgrades considerable support by IATA: line activity today. to support electronic ticketing component technology such as EDIFACT messaging, an We have a StB support portal at Q: The recent economics of the industry electronic ticketing upgrade seems a large and http://www.iata.org/whatwedo/simplibiz1 have resulted in a shortage of investment expensive project. However, sorting out their that provides a wealth of information about funding. How can electronic ticketing be systems so they can compete in the 21st cen- all the StB projects — more extensively activated globally in such a constrained tury with efficient processes will bring much about electronic ticketing. environment? more benefit than just electronic ticketing. We offer workshops to explain electronic A: Running an airline continually requires In some ways, I see electronic ticketing ticketing and other StB projects — again investment — in people, planes and process- as driving all airlines toward investing in mod- listed on the Web site. es. The returns from implementing electronic ern technology to become more productive, ticketing are significant. Apart from the obvi- which is what the aviation industry requires. We continue to stay in close contact with ous areas such as paper stock, printers and airline StB managers at a local level and offer supporting ticket on departure at airports, we Q: How do you intend to celebrate New direct advice as needed. advise airlines to consider how electronic tick- Year 2008? We encourage airlines and ground handlers eting moves them toward cheaper distribution A: Well, that’s a good question. I don’t know yet, to approach their system providers to ask channels and self service for passengers at but I am confident it will involve celebrating the about the electronic ticketing compliant ver- airports. achievement of 100 percent electronic ticketing! sions of their systems. But the cost to an airline of not imple- I think it will become quite clear several menting electronic ticketing is also an impor- months earlier whether we have achieved a Q: Today, many airlines have more than tant consideration. Without electronic ticket- high enough electronic ticketing penetration 200 interline ticketing agreements. Will this ing, airlines will need to distribute their own and have removed the remaining obstacles. be sustainable in a world of 100 percent paper tickets, and they will inevitably lose the Inevitably, there will be some airlines that will electronic ticketing? majority of interline traffic as other airlines will still be implementing more interline electronic A: Through the years, many airlines have simply be unable to accept paper from 2008. In agreements in 2008, but I am committed to gradually increased the number of interline a nutshell, there are savings to implementing making sure the IATA challenge is complete. agreements. And, as you say, some large air- electronic ticketing and costs to not imple- Of course, there is much more to do in this lines have well in excess of 200. But let’s be menting it. Each on its own would probably dynamic and exciting industry, including com- clear that the reduction in interline agreements more than justify the business case. pleting the other StB projects. a mmmmmmmmmmmm ascend 39 industry

Preparing for Takeoff: India’s Aviation Infrastructure

India’s significantly improving economy and rapidly growing air transport industry have the country’s government focusing on overhauling its airports’ infrastructure.

By Lynne Clark | Ascend Staff

ndia’s “air travel revolution,” declared Indian air transport sector is among the most Recently, India displaced the United last December by Civil Aviation Minister vibrant and fastest growing in the world, but it States as the second-most-favored destination Praful Patel, won a major skirmish Feb. 1 could be a much greater catalyst for economic for foreign direct investors after China, accord- when the Indian government approved bids by growth if critical bottlenecks in the system are ing to consulting firm A.T. Kearney, Inc. two public/private partnerships pledging 184 removed. The most urgent is infrastructure, Foreign-owned factories, software com- billion rupees (US$3.5 billion) to modernize the particularly Mumbai airport. We need results panies and call centers are opening in India in country’s Delhi and Mumbai airports. fast, or a great start could turn into a disaster.” unprecedented numbers, and their executives A consortium comprising Indian firm are traveling into the country more often, GMR and Fraport, a German airports opera- Growing Prosperity making the need for modern airports an urgent tor, won the bid for modernizing Delhi’s Indira The Indian economy is surging. By 2040, priority. Gandhi International Airport Delhi. Indian group per capita gross domestic product is expect- Clearly, market forces are overcoming GVK and South African Airports were awarded ed to be 445,000 rupees (US$8,442), up incessant government meddling and stifling the Mumbai International Airport project. The from an estimated 36,390 rupees (US$691) bureaucratic inertia, which has characterized airports in Mumbai and Delhi handle half the now, according to Goldman Sachs Group, India’s airline segment. Investors are seeing total air traffic in India — 520 and 450 flights Inc. Budget airlines are making travel more this developing industry as a goldmine of oppor- daily, respectively. According to projections, affordable for more Indians. In 2004, 6 million tunity. India today has the world’s largest mid- the airports will handle three times more traf- Indian tourists traveled overseas, a 15 percent dle class of 300 million people and the fourth- fic by 2010, numbers that imply Mumbai and increase from 2003. largest economy, growing 7 percent annually.

Delhi will be as busy as Hartsfield-Jackson Hindu John/The Shaju by Photo Atlanta International Airport and Chicago O’Hare International Airport are today. The Delhi and Mumbai bid victories came after more than a year of bureaucratic wrangling and political opposition to privatizing Indian airports, and more than eight years after a 1997 government report identified the need for a rapid infusion of foreign capital to update the state-run airports called a “disaster” by Hong Kong investor Marc Farber. The wins cost Patel valuable political capital — to settle a four-day strike by airport workers in January, he was forced to prom- ise union leaders in writing that none of the employees of the state-run Aviation Authority of India would lose their jobs. Deal opposition also came from bidders who failed to get the contracts and are now challenging the bidding process in court. These are the types of bottlenecks the International Air Transport Association warned that the Indian air transport sector could ill afford. Speaking last October at a meeting host- The establishment of call centers, such as this one in Chennai, has resulted from the need ed by the Confederation of the Indian Industry of businesses in developed countries for cost-effective BPO services. India, where the cost in New Delhi, IATA General Director and Chief of labor is lower than in developed countries, offers a more economical alternative. Executive Officer Giovanni Bisignani said, “The 40 ascend mmmmmmmmmmmm industry

A lack of modern airports has allowed annually, according to rediff.com, an Internet Besides Delhi and Mumbai, the Aviation only 15 million people a year to travel by air, portal focusing on the global Indian economy. Authority of India has proposed to modernize compared to the more than 13 million who Inadequate parking bays in Delhi and 35 non-metro airports to world-class stan- travel by intercity trains each day. India boasts Mumbai are forcing many carriers to park dards. Another 50 are being considered for many of the world’s millionaires — 61,000 as their fleets in nearby metropolitan areas such improvement. of June 2004 — and more than 300,000 as Hyderabad, Ahmedabad and Chennai. Under the proposed plan, the govern- Indians pay for first-class rail tickets daily, By 2010, experts predict both Delhi and ment will adopt a “cluster approach” where

costing approximately the same as many low- Hindu Chakravarty/The Shanker by Photo price air fares. The number of flights per person is only 0.014 per year, fewer than in Haiti and just a fraction of the United States and Australian rates of 2.02. The potential is not lost on industry prognosticators. According to IATA, Indian carriers placed more than 550 billion rupees (US$12 billion) in new aircraft orders at the 2005 Paris Air Show. Jet Airways and Indian Airlines posted profits last year, even with high fuel costs. In 1991, India had two carri- By 2010, India’s government will revamp its main airports, such as the Indira Gandhi ers, state-owned Air India and Indian Airlines. International Airport, to help relieve congestion due to increased traffic. Today, there are 11 and four more are set to begin operations. Traffic is expanding rapidly. IATA fore- Mumbai will need 50 more bays. And these five airports in a zone will be grouped together casts international passenger traffic growth of bays need to be bigger. The current parking under a joint venture. 8.4 percent annually between 2005 and 2009, bays cannot accommodate an aircraft the size “Since there are many small airports in and as high as 12 percent when adding domes- of the Airbus A380. a zone that are loss making, we are going to tic travel. Freight is also expanding. The Indian club them with the profit-making airports in a market for international freight is expected to Skies Cleared for Change particular zone or region,” said Prime Minister grow by nearly 10 percent annually during the Modernizing India’s airport infrastructure is Patel. “This will help fund the modernization next five years. a monumental task. But India’s Secretary program of the airports as well as develop- for Civil Aviation Ajay Prasad is optimistic ment of all the airports that will happen simul- Infrastructure Hurdles the country’s politicians have finally grasped taneously. By 2010, the work is expected to The market is growing. The potential is great. the need for urgent reforms if the country be completed.” But can the infrastructure support the rapid is to take advantage of the unprecedented Other short-term measures meant to growth? Detractors have decades of inertia upsurge in its economy. He cites “blue sky” clear India’s runways include: to back them up. Aviation tourism writer reforms currently being implemented based Proposed relief packages aimed at high fuel Rabindra Seth said, “Airport infrastructure on recommendations of the Naresh Chandra taxes and navigation charges, has always been built for yesterday, never for Committee. The Chandra Committee, named Finalization of a long-term national civil avia- tomorrow.” for its chairman, a former cabinet secretary tion policy, Prior to 1990, India’s aviation sector and respected civil servant, recently published Approval of private companies to sell jet was controlled by a heavy-handed government an extensive report on problems within the fuel, bureaucracy and party politics that rejected aviation sector, identifying four key steps to Agreement allowing third-party ground free competition, foreign investment and for- solving them: ­handling, eign goods. Dozens of state-sponsored com- Establish a level playing field and remove the Revamping of how routes are awarded, missions, studies and inquiries have confirmed extortionate tax regime via lower taxes and Incorporating air traffic control, that the civil aviation sector was a pawn to charges across the entire industry, Limited open skies to cater for peak season dispense political patronage. Promote private equity participation by requirements, Overregulation and mismanagement reducing barriers to entry, Liberalizing international routes with neigh- have left a legacy of a grossly underdeveloped Strengthen the Directorate General of Civil boring countries comprising the 10-member air transport industry plagued by delays, safety Aviation by ensuring it is adequately manned Association of Southeast Asian Nations, concerns, low customer satisfaction levels to regulate all important disciplines such as A flexible approach to airport financing and and operational problems. In addition to more airworthiness, flight operations and monitor- easing of foreign direct investment, with airports, India needs more pilots, flight crew ing air traffic control services, 74 percent allowed without government and air traffic controllers. Develop institutional mechanisms that pro- approval for airports and up to 49 percent in According to the Business Standard, vide support for socially desirable but uneco- airlines. Non-resident Indians can take a 100 a leading Indian financial newspaper, delays nomic services. percent stake in domestic airlines without of anywhere up to an hour have become par The New Delhi and Mumbai deals are approvals. for the course in airports such as Delhi and evidence of the government’s commitment The government promises major struc- Mumbai. Both airports typically handle 25 to to change. In addition to these international tural reforms are just months away from being 28 flights an hour, compared to 40 per hour per upgrades, Unique Zurich Airport AG recently announced. The skies over India are worth runway at most international airports. began constructing a new, privately owned air- watching. a Lack of adequate runways increases field in Bangalore, the “Silicon Valley” of India airport turnaround time. Extra fuel for delayed and very soon its biotech hub. The Bangalore landings and takeoffs in India may cost each air International Airport at Devanahal is scheduled Lynne Clark can be contacted at carrier nearly 7 billion rupees (US$131 million) to open in 2008. [email protected]. mmmmmmmmmmmm ascend 41 Photo by Dinodia Images/Alamy Cloud photo by Sherri R. Camp/Shutterstock

IndiGo, one of the newest low-cost carriers in India, is set to take advantage of the ­increasingly liberalized air transport market.

ater this year, the skies over India will state-owned carriers that previously domi- 2008. The remaining amount of the airline’s become even more blue. IndiGo, a new nated the market. equity is held by financial institutions. L low-cost Indian domestic airline launched Business in other industries, see- “The 21st century belongs to India,” by InterGlobe Enterprises, created a stir in the ing the potential of India’s aviation market, Gangwal said. “We feel privileged at the pros- industry by ordering 100 Airbus A320 aircraft, have launched airlines, including a brewery pect of contributing to the growth of India’s the largest single order in India’s aviation history. (Kingfisher Airlines), a textile company (GoAir) aviation sector. IndiGo will serve the nation’s “The aviation industry in India is on the and helicopter charters (Air Deccan). air travelers with superior customer service threshold of the next big revolution, and IndiGo InterGlobe Enterprises — the foremost and provide great value for the money.” is ideally positioned to fill the fast emerging travel conglomerate in India, offering airline The start-up carrier has one of the best- need for reliable, efficient and economical air and aviation management, travel-related ser- financed launches in aviation history with an travel,” said Rahul Bhatia, managing director vices, travel technology, travel distribution ser- initial funding of 3.5 billion to 4 billion rupees of InterGlobe Enterprises and co-owner of vices and hotel development and management (US$79 million to US$90 million). The airline the airline. “IndiGo will also make a humble services — is also looking to capitalize on the has also added an executive team with vast yet significant contribution to India’s growth aviation sector with IndiGo. airline experience, including Chief Executive by creating employment opportunities directly InterGlobe Enterprises partnered with Officer Bruce Ashby, Chief Operating Officer and through ancillary services.” Rakesh Gangwal, an experienced aviation Steven Harfst and Chief Financial Officer Riyaz The launch of IndiGo reflects the coun- executive with more than 20 years in senior Peermohammed. try’s burgeoning air transportation industry. management positions at United Airlines, Air “IndiGo has a strong business plan to Government liberalization has led to a rapid France and US Airways. Bhatia and Gangwal, operate in one of the fastest-growing aviation increase in the number of airlines serving the CEO of WorldSpan, own a combined 20 per- markets in the world,” said Ashby, a 20-year nation. Since 2004, seven new carriers have cent of the airline. Their initial US$80 million airline industry veteran including stints at US announced their launch, challenging the two stake is set to increase to US$250 million by Airways, Delta Air Lines and United Airlines. mmmmmmmmmmmmmm By Ramesh Premkumar | Ascend Contributor

Highlight IndiGo’s launch is expected to bring down average fares and increase frequency between key cities, and travelers are expected to benefit the most.

“This is a once-in-a-lifetime opportunity to come in at the ground level as the CEO to guide the airline initiative from one of the most professional aviation groups, InterGlobe.” Oil prices — Indian carriers have experienced Travelers, aviation experts and com- In April 2005, the start-up airline received a drastic decrease in their profitability margins petitors are watching IndiGo closely. IndiGo’s its No Objection Certificate from the Indian due to high fuel costs, which are expected launch is expected to bring down average government to launch scheduled services. In to present a significant challenge to IndiGo. fares and increase frequency between key July 2005, the airline placed its blockbuster Lack of airport infrastructure to support the cities, and travelers are expected to benefit aircraft order, worth US$6 billion at list prices, rapid growth of air travel — Many of India’s the most. and will take delivery of eight aircraft by the main cities lack the airport facilities to sup- As a result of Jet Airways’ US$500 mil- end of the year, nine more next year and one port the current levels of traffic, much less lion buyout of Air Sahara in January, IndiGo, every month thereafter. the increases in travel marked by low-cost Kingfisher Airlines, GoAir and Air Deccan entrants. announced an agreement to share engineer- IndiGo’s Business Model Natural calamities (fog, floods, storms) — ing resources, equipment, technical man- The airline plans to adopt a low-cost carrier 2005 was a challenging year to India’s air- power and training requirements to cut costs model, with fares expected to be competitive lines due to unexpected severe rain, floods of operations (all four carriers fly Airbus air- with those of other low-fares airlines such as and fog. India’s Director General of Civil craft). In addition, the four-member league Air Deccan. The fares are expected to be 40 Aviation (equivalent of the U.S. Department is expected to transfer passengers between percent lower than those of full-service carriers. of Transportation) has issued new stringent each other’s flights on an agreed flat fare in IndiGo will operate as domestic spe- regulations mandating that pilots for India’s case of disruptions or over bookings. cialist on category A routes (between metro carriers who are not trained to handle fog Significantly, the airlines agreed not to cities) and on category B (between metro and conditions will not be allowed to land at the poach licensed manpower from each other, second-tier cities) routes. Indian regulations nation’s second-busiest airport, Delhi. subject to sharing technical manpower and mandate that a carrier operate for five years training instructors. They are expected to before serving international routes. Indigo’s Key Differentiator establish a common compensation package Aviation industry watchers believe IndiGo’s for all licensed expatriates. IndiGo’s Biggest Challenges biggest advantage will be its size. With 100 It is a dynamic time in the India market- Despite its advantages, IndiGo faces several aircraft, it will be able to serve all airports in place marked by the launch of new entrants issues it must overcome: the country with multiple connections. With such as IndiGo. With its capitalization and Shortage of skilled resources (pilots, flight its substantial start-up financing, the airline large aircraft order and low-cost business attendants, ground crew) — Shortage of will be able to grow rapidly and connect the model, the blue skies promise to take on the skilled resources is seen as the single-larg- lucrative metro routes with flights every half shade of IndiGo. est threat to Indian carriers, especially new hour, something that will take traffic away entrants. Indian carriers have had to offer from existing operators. Ramesh Premkumar is an India-based double and triple compensation packages to Another key benefit comes from regional director for the Sabre Airline attract talent. It has also resorted to hiring InterGlobe’s expertise in handling ticketing Solutions business. He can be contacted foreign professionals at a premium. and inventory management for other airlines. at [email protected]. mmmmmmmmmmmmmm Photo by Kamal Narang/The Hindu

well-known fact that airport and air traffic Recoverycontrol facilities in the country are barely able to support commercial airline operations. In irline flight schedules and operations are addition, most major airport facilities share susceptible to unexpected disruptions airside and air traffic control services with the Full By Michael Clarke Athat result from crew shortages, severe military. In many situations, major commercial Ascend Contributor weather patterns, system congestion and air- airports will temporary close to support military craft failures. These problems are exacerbated activities and/or training. This usually happens in emerging countries with still-developing on short notice, severely impacting an airline’s airport and air traffic control systems that are planned operations. Also, government regula- Through the use of straining to support airline traffic levels. The tions require scheduled airlines to maintain air phenomenal growth of airline passenger traffic services to secondary markets proportional to and aircraft movements in the Indian sub-con- the level of service offered in major markets integrated, advanced tinent as a result of deregulation is a case in (such as Mumbai, Delhi, Bangalore, Chennai, point. Kolkata). Since 1990, India’s domestic airline Like most operating environments,the decision-support systems, industry has experienced more than 100 Indian domestic airline market is often prone to ­percent growth in aircraft movements, with disruptive weather patterns. During December more than 10 new airlines starting or planning through February, airports in cities such as Jet Airways can quickly to start operations in an already congested Delhi are closed for periods of up to five hours environment. On the international front, the due to early morning and late evening fog. This signing of more liberal bilateral agreements, as has a significant impact on the daily operations and effectively overcome well as open-skies agreements, has resulted of scheduled carriers. Airports are sometimes in impressive growth of scheduled opera- closed for several days due to extremely heavy tions. At the same time, there have not been rains during the monsoon season. Last August, unexpected schedule any significant improvements or expansion of both the international and domestic airports ­airport facilities. (See related article on page 40.) in Mumbai (the financial center and major Even before this massive growth in gateway city) were closed for runway flooding. disruptions. commercial air traffic, Indian airlines were Granted, they both share the same runways, exposed to restrictive operations as it is a along with the military base. Once the airports mmmmmmmmmmmm profile

re-opened, scheduled carriers were forced by Indian Scheduled Domestic Airline Industry the government to reduce their operations by 30 percent for three subsequent days. Working under such demanding condi- tions, Jet Airways elected to acquire Sabre® Growth Decision Manager, an innovative tool within the Sabre ® AirOps™ Suite. Decision Manager 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 20 180 is a fully functional decision-support system developed for airline schedule recovery. The 18 160 system currently considers aircraft mainte- 16 nance routings, crew connection assignments, 140 14 passenger origin-and-destination itineraries, 120 operational constraints (air traffic slots, airport 12 slots, curfews, gates, weather alerts), and 100 relevant market considerations (coverage, rev- 10 80 enue, equipment requirements). Jet Airways 8 is currently in the process of implementing 60 Decision Manager to deploy it in conjunction 6 ® 40 with Sabre Movement Manager, another sys- 4 tem within the AirOps suite. Decision Manager 20 has been developed to seamlessly integrate 2 ® with Movement Manager as well as the Sabre 0 0 ® FliteTrac system. Number of passengers (millions) Number of operational aircraft An effective schedule recovery sys- tem has to consider aircraft maintenance, crew scheduling, passenger itinerary, airport resource allocation and network operational constraints to accurately account for typical Growth Trends decision making within an airline. Decisions on whether to cancel or delay a scheduled flight 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 have to be based on the bottom-line benefit to 25 the airline. It’s not just important to consider 22.5 the number of passengers on the aircraft, but also what revenue contribution comes from 20 the flight. In addition, an airline controller has to consider all possible solution options including 17.5 potential equipment substitutions and dynamic 15 flight schedule adjustments. Such decision- making procedures require timely access to 12.5 passenger itinerary data in conjunction with aircraft and crew assignments. 10 Since Decision Manager derives all the 7.5 requirement data and information directly from the centralized flight operations database, sug- 5 gestions proposed by the system will adhere Available seat kilometers (billions) Revenue passenger kilometers (billions) to prevailing operating conditions and restric- tions. For example, if a particular airport is unable to support operations of a specific type After the downturn of the industry in 2000/2001, the domestic India air transportation of aircraft, Decision Manager will not assign industry is displaying significant growth in terms of aircraft in operation, number this aircraft type to operate into the given air- of passengers carried, number of available seat kilometers and revenue passenger port. Of course, the solution generated by the kilometers. Such growth is putting a strain on infrastructure, which can further decision-support system will depend on the complicate efforts to recover from schedule disruptions. integrity and accuracy of the data stored in the centralized database. If an aircraft’s minimum equipment list is not updated after a scheduled vidual airline controllers make split decisions decisions will enable Jet Airways to maintain maintenance event, Decision Manager may that have a significant impact on the carrier’s its competitive market position as India’s lead- inadvertently prevent the aircraft from being profitability. By standardizing the decision-mak- ing carrier. For carriers in rapid growth mode assigned to a specific flight with special opera- ing process, managers can be confident that such as Jet Airways, having a scalable deci- tional requirements. As such, the successful the optimum decision has been made based sion-support tool in place will support smooth deployment of Decision Manager will dictate on suggestions provided by Decision Manager. operations even in uncharted skies. a a well-established data management proce- Decisions made that consider all aspects of dure. One of the benefits of implementing a the airline’s operations (resources, costs and Michael Clarke is a principal research decision-support system such as Decision revenue) will ensure that the airline is always scientist for the research team for the Manager is establishing consistent decision focused on the bottom line. In addition, the Sabre Holdings™ business. He can be making across the airline. In many cases, indi- ability to make quick yet accurate operations contacted at [email protected]. mmmmmmmmmmmm ascend 45 Liberalization Open Skies in India,s air transpor t industr y has caused the By Shail Maniar | Ascend Contributor , or several decades, air travel in India was coun tr y s two traditional monopolized by the two traditional state- F owned airlines — Air India (primarily inter- national) and Indian Airlines (domestic). This carr iers to adapt to a supremacy began to erode in the early 1990s when the Indian government scrapped the ban on privately owned airlines, and a host new environment. of smaller airlines eventually sprouted to challenge India’s dominant flag carriers. Some folded, but others, such as Jet

Air India Express photo by TomLo/PlanePictures.net; Air India photo by Attila Hollósi/PlanePictures.net; Indian Airlines photo by Andrew Hunt/Airliners.net; Airways, thrived, and as a result, Jet Jet Airways photo by M Radzi Desa/MyAviation.net; Air Sahara photo by Antony Best/Airliners.net; Paramount Airlines photo by Luis Rosa/MyAviation.net; Airways’ domestic market share British Airways photo by Wojtek Werpachowski/Airliners.net; SpiceJet photo by Joe Walker/MyAviation.net; Go Air photo by Olav Rhensius/Propfreak Collection; rose to more than 40 percent Lufthansa photo by Chai Tzong Ying/Airliners.net; Cathay Pacific photo by Ben Wang/Airlners.net; Kingfisher Airlines photo by Gerd Beilfuss/MyAviation.net; AirDeccan photo by Jan Kertzscher/PlanePictures.net by early 2005. mmmmmmmmmmmm Opens Challenges

By Shail Maniar | Ascend Contributor

For much of the ’90s, Air India, Indian The quest for a “quality product” from Airways — are taking on Air India on many of its Airlines and Jet Airways each carved out a the Indian consumer (result: new airlines once-prized international routes. Domestically, market segment of their own, and it seemed focused on providing world-class service). both Air Deccan and recent entrants Kingfisher that equilibrium of sorts would be maintained As 2006 progresses, both Air India and Airlines and SpiceJet are eroding Indian for a very long time. Economists coined 2004 Indian Airlines will need an extreme makeover Airlines’ market share each month on most as “the year India learned to fly” and 2004 to survive and compete in the changed Indian domestic routes. By early 2006, the combined turned out to be a watershed in Indian civil aviation market. LCC market share in India was around 27 aviation. Three key factors that supported this percent, and as a result, Jet Airways’ market claim were: Current State of Affairs share dropped to about 35 percent and Indian Liberalization of India’s civil aviation policies Competition is leashing a three-pronged Airlines’ share dropped to 25 percent. On the (result: launching of several new private air- attack on both Air India and Indian Airlines. positive side, Jet Airways and most other carri- lines), Having established itself as a dominant player ers increased capacity in the domestic market, A burgeoning Indian economy (result: very in the domestic air travel space, Jet Airways indicating that the size of the Indian aviation strong travel demand), and Air Sahara — recently purchased by Jet market has increased year over year. mmmmmmmmmmmm mmmmmmmmmmmm ascend 47 profile

Open-skies agreements with India have result- position their products to gain a substantial the inherent strengths and the solid base of ed in Asian, European and Middle Eastern slice of the Indian market. the airline — of its vast network, technology airlines ramping up flights to India; Air India and infrastructure. Indian is hoping that newer has lost its dominance on various routes to Turning Challenges into aircraft and a fresh brand will enable the Indian British Airways (flights to London), Cathay Opportunities traveler to view it as an entirely new carrier. Pacific Airways (service to Asia) and Lufthansa Though the Indian government has One school of thought says that Air German Airlines (flights to Europe). recently liberalized the aviation policy to sup- Indian and Indian should merge, saving millions The current state at Air India and Indian port new local private airlines, it needs to strike of dollars by creating operational synergies in Airlines can be summed up as: a balance between liberalization and support marketing, ground handling and purchasing as 1. Desperately needing a long-awaited fleet for Air India and Indian Airlines to create a more well as reducing their workforce from 40,000 renewal. New aircraft have not been added vibrant, competitive and liberalized aviation to 20,000. The government has considered in more than a decade. industry, which would be a draw for investors this option, but political pressures and oppo- 2. One of the largest workforces among air- and travelers alike. The government is tackling sition from trade unions have stalled these lines in the world today. the issues head on. Recently, the government plans. The current strategy is to offer portions 3. Government interference in the manage- finally approved a plan to buy up to 68 aircraft of the airlines’ equity to the public while retain- ment decision-making process. Political lead- for Air India and 43 for Indian Airlines. There ing full management control. ers continue to control appointing managers, is a window of opportunity for Air India, and Will these measures, when added up, deploying aircraft and deciding routes. the government realizes this, too, since the revive both Air India and Indian and enable Another not so obvious challenge facing biggest beneficiary of open-skies agreements them to compete? Opponents say these mea- both Air India and Indian Airlines is potential such as that with the United States will be Air sures are half baked and won’t take them far. talent attrition. Both have an experienced work India in the short term. No other local airlines And unless they are given access to foreign force with expertise in key airline functions, have aircraft capable of flying to long-haul des- capital and independent decision making, they particularly in international operations. For a tinations such as the United States. will have little chance to survive. long time, an aviation career in India could only The government’s other strategy is to Will They Survive? Given how the Indian aviation scenario Highlight is playing out, Air India has better odds at turning around and surviving as compared to domestic-focused Indian Airlines. The barriers By early 2006, the combined LCC market to entry are much higher for a new Indian car- rier in international operations verses operating share in India was around 27 percent, domestically. Some signs indicate Air India may be considering starting a full-fledged domestic and as a result, Jet Airways’ market share operation to feed its large international opera- tion, a move that would position the airline dropped to about 35 percent and Indian to compete with the combined Jet Airways and Air Sahara. Air India has a vast network of routes in its arsenal, though much of it is Airlines’ share dropped to 25 percent. unused due to limited aircraft capacity and mission capability. Though the new aviation policies will allow the likes of Jet Airways and Air Sahara to initiate international flights, this be sought at these two airlines. New private establish and solidify Air India’s presence on is easier said than done. Long-haul flights airlines will need to get up and running quickly, international routes that lack competition from require appropriate aircraft, crew and logistical and a natural place for them to hire trained the likes of the combined Jet Airways and support. cockpit crew and administrative staff would be Air Sahara. The government’s new policy of Undoubtedly, regardless of which airlines from the two state-owned airlines. The recent allowing Jet Airways and Air Sahara to fly to survive in this battle, the biggest beneficiary takeover of Air Sahara by domestic leader Jet international destinations, such as Southeast will be the Indian air traveler. India remains far Airways enables it to further strengthen its Asia, Europe and the United States, excludes behind China in numbers of domestic passen- position in the India marketplace and distance the high demand and profitable routes to the gers and aircraft. But the global aviation indus- itself from the rest of the pack. The acquisition Middle East for now. As a result, Air India try sees India as the next China. The aviation also enables Jet Airways to gain additional floated a low-cost subsidiary, Air India Express, scenarios in both China and India are playing access to key operational assets (check-in to primarily operate from the southern state of out quite differently — new Indian entrants, counters, hangars, parking bays, etc.) as well Kerala to the Gulf and West Asian destinations such as Kingfisher Airlines, are leading the way as qualified and trained cockpit crew, cabin with an 18-aircraft fleet. If this experiment is in creating a totally new travel experience for crew, and maintenance personnel. successful, it would make Air India Express Indians, and the state-owned flag carriers are The state of the aviation industry in gen- the choice airline for the millions of Indian playing catch up for survival. a eral, however, is upbeat and vibrant. According expatriate workers in that region. to the International Air Transport Association’s Indian Airlines is undergoing a more dra- forecast for India, international passenger traf- matic makeover to respond to the competition fic will grow 8.4 percent annually between and is in the process of re-branding itself to now and 2009. When added to domestic traf- Indian. Signifying continuity with change, the Shail Maniar is managing director for fic, the growth is close to 12 percent. With this new look of the airline communicates a bold, the Sabre Airline Solutions® business in magnitude of growth, it is natural to assume striking, progressive and distinctive image. The Bangalore, India. He can be contacted that both Air India and Indian Airlines could big and bold font of the new logo connotes at [email protected]. 48 ascend mmmmmmmmmmmm (ELPINGYOUGOWHEREYOUNEEDTOGROW

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Take it Online

An increase in online air travel bookings in India has created a need for robust Web-based capabilities.

By Craig MacFarlane | Ascend Contributor

t’s no mystery why more and more two years to US$40 million. Web sites for efficiently and leverage choices of other part- airlines are attracted to the India mar- low-cost carriers and specialized travels portals ner airlines, car and hotel products directly to ket. Despite a growing population of such as makemytrip.com and ghumo.com con- customers at anytime, from anywhere. The 1.1 billion, only 15 million people a year travel tinue to grow, drawing increasing numbers of Web component has realized tremendous by air domestically. The country’s middle class, online shoppers who purchase airline tickets. growth in passenger sales in India. In 2004, forecast to increase from the current 300 mil- Makemytrip.com reports selling 800 tickets more than 33,000 reservations were booked lion to 400 million by 2010, represents a largely and hotel reservations a day. online for more then 44,000 passengers via the untapped segment that is increasing its spend- The growth of the Indian middle class, Web component. The entrance into the Indian ing power as the nation’s economy expands. combined with its willingness to shop for and market produced associated sales revenues of Given the potential for increased air travel, car- purchase travel online, makes India an ideal US$7.1 million for the respective airlines for riers are taking steps to ensure they are primed market for airlines, particularly in terms of on- the year. The growth trend in 2005 showed to take advantage of the new opportunities. line travel bookings. Due to the surging middle a dramatic increase in reservations booked One of the ways carriers will be able class with its growing appetite for conducting online — more than 375 percent. In 2005, to reach the Indian market is through the business through the Internet, airlines are focus- airline sales for India through the Web com- Internet. The number of people with access ing heavily on their online presence in India, spur- ponent topped US$25.8 million. Projections to the Web continues to grow as Internet ring them to develop methods and tools for this year suggest continued growth, with penetration increases throughout the country, for efficient and effective online commerce. online bookings forecasted to exceed more boosting the ability of airlines to sell tickets SabreSonic™ Web, a powerful, flexible than 200,000 passengers. electronically. The increasingly affluent middle Internet booking tool, is a complete, fully The Web component is a flexible Internet class is rapidly adopting Internet usage, leading hosted online booking system that enables booking engine that enables airlines to create to a significant increase of online travel book- airlines to display and sell their products most a self-service environment for their customers ings and direct-to-traveler interactions. Studies indicate that Indians are more Directory PAGE: Request Flight Show likely to purchase travel online. Recent sur- 7ÊÊÊ, veys show that 36 percent of Indians making purchases online bought airline tickets, mak- 7 É
, ing it the most popular category of Internet My Airline Travel Main Section 3 Main Section 4 sales. That compares to the global figure of 0 Itinerary Items 21 percent for the category. Beyond that, the > Request > Select > Review > Purchase > Confirm Main Menu Internet & Mobile Association of India reports click here for taxes and fees information Home Page that nearly 24 percent of the 11.8 billion rupees add multiple destinations My Reservations 1. Where and when are you travelling? (US$263 million) Indians spend online each *indicates required fields Logout year goes to purchase travel by rail, still the Roundtrip: most popular method of transportation in India. Language * From: Denver, CO (DEN) One-way: And 47 percent of all online rail ticket buyers * Depart Date: 18 Oct anytime are in the key demographic between the ages

of 26 and 35. When rail purchases are added to Hyperlink 1 * To: Dallas/Fort Worth (DFW) airline tickets, overall travel represents almost Hyperlink 2 * Depart Date: 22 Oct anytime 58 percent of total Indian online spending. Hyperlink 3 The amount of monthly online travel Hyperlink 4 Search Alternate Dates transactions continues to increase. According to Hyperlink 5 Search Alternate Dates estimates by the Internet & Mobile Association of India, the average number of transactions has increased from 207,000 a month in 2003 SabreSonic Web provides configurable shopping choices based on airline-defined configura- to 795,000 in 2005. Airline online bookings are tions with the ability to book one-way, round-trip and multiple-destination itineraries. expected to double in India during the next 50 ascend mmmmmmmmmmmm products

Directory PAGE: Welcome Page It offers a tool that enables airlines to quickly 7ÊÊÊ, configure the look and feel of their booking engine, allowing for optimal flexibility. 7 É
, It offers a highly flexible and powerful admin- My Airline Main Section 2 Main Section 3 Main Section 4 istration tool, providing an effective solution for managing online content. 0 Itinerary Items It enables airlines to react rapidly to market Update Profile Welcome, John Smith changes to ensure their online presence Update Billing Info Mileage Summary Airlines made free flight even easier. maximizes its revenue potential. Sabre Virtually W9-30001 50000 miles View Details Announcing WorldWide Royalty, a Faster Way There Diamond Level It reduces distribution costs. to Free Travel, means members redeem for Flight Information free tickets quicker than most other airlines. The tool can also be adapted to the

Flight Schedules click here for taxes and fees information unique needs of the India marketplace. Main Menu My Reservations View Trip History For example, the country’s airlines utilize Home Page courier services to deliver tickets to their My Reservations 10/18/2004 DENVER, CO (DEN) to DALLAS/FORT WORTH, 1 Adult JHDOPS View Exchange Cancel Purchased TX (DFW) customers, where the payment for that ticket Logout is then received. The Web component will Language Exchange a different itinerary soon include a feature enabling customers to pay by invoice, which will accommodate Shop & Book payment through courier services. The picture is clear. The online market- The SabreSonic Web component’s personalized welcome page presents travelers with a con- place in India is growing at a tremendous rate solidated view of their current bookings and trip history, and it is integrated with the Sabre® and is on the cusp of transforming the travel Traveler Loyalty System, which provides real-time frequent flyer account information on the business. Airlines are excited by the opportu- welcome page. nity, and the Web component can help airlines achieve success by expanding their online booking capabilities. It is a time of constant while still maintaining control over how those continue growing and providing increased change and transition, but the opportunities customers interact with the airline. In addition value for airlines. The Web component will that are beginning to present themselves are to the customer-direct attributes of the compo- help airlines capture that value as consumers limitless. The population is growing. Internet nent, it offers travel agency portal functionality and agents rely more on the Internet to book adoption is growing. Online travel purchase is as well as corporate portal functionality. These airline travel. The component has a number of growing. The online travel business in India features help carriers in India and around the robust features that position it as the Internet presents a new frontier full of challenge and world work directly with travel agencies and booking tool of choice for the Indian market: tremendous reward for those carriers that best corporations to streamline the booking process It enables airlines to offer the choice of position themselves. a and ensure their ability to capture all forms of three distinct shopping paths to travelers online bookings whether driven directly by the based on their individual shopping needs. Craig MacFarlane is marketing man- end traveler, a travel agent or a corporation. Travelers can shop by price, schedule or date, ager for Airline Passenger Solutions The current trends and numbers for offering them the flexibility they demand. for the Sabre Airline Solutions ® online travel bookings in India make it an It provides redemption capabilities for loyalty business. He can be contacted at extremely exciting market that is poised to customers. [email protected].

+count it up

7 — Percentage of India’s economic 15.9 billion — Total revenue, 75,000 — Average monthly growth in 2003. in U.S. dollars, for India’s software indus- salary, in rupees, of a senior air try during the 2003/2004 fiscal year. hostess in India.

0 — Number of big shopping malls 800 — Estimated percentage 45 million — Expected in India five years ago. Today, there increase in Indian wages during increase in the number of passen- are at least 100. the next four decades. gers in the Indian aviation market during the next five years. mmmmmmmmmmmm ascend 51 products

Just Checkin’ In

Congestion in India’s airports as a result of the substantial rise in air traffic can be streamlined through effective self-serve check-in technology.

By Mark Canton | Ascend Contributor Sabre Airline Solutions Airline Sabre n overall surge in air travel expected in India in the coming years will be fueled A by more carriers entering the market, pushing airfares down to make air travel more

affordable; improved air transport infrastruc- archives ture, which will make the industry more effi- cient; and the continued growth of the Indian economy, providing citizens more disposable income. The current volume of 15 million domes- tic air passengers a year pales in comparison with the rail passenger volume of more than 13 million — a day. However, air traffic is expected to grow to 50 million passengers a year in the next five years. Some industry analysts project that the number of com- mercial aircraft will grow from just under 200 today to more than 500 in the same five-year timeframe. As air traffic continues to grow in the coming years, airlines will need automated solutions to adequately process travelers. With a middle class expected to grow to 400 million by 2010 and with new open-skies agreements and deregulation of India’s air transport industry, many airlines are excited about the prospects of the India travel market. But, is there a catch?

The Challenge As newcomers enter the Indian market and air fares become more and more affordable, many Unfortunately, there is a dark side to all of this of the country’s residents are filling up India’s airports, which are rapidly becoming over- optimism — at least in the near term. The crowded. Indian government offered open-skies oppor- tunities to the private sector in 1993, creating much-needed competition for the two state- Unless Indian carriers take the neces- A tool such as SabreSonic™ Check-in, owned airlines, Air India and Indian Airlines. sary steps, increased traffic at India’s airports which provides components such as self-ser- The move resulted in the creation of new will lead to longer lines at check-in, which vice kiosks and Web check-in can help carriers airlines, such as Jet Airways and Air Deccan, could adversely impact customer satisfaction. in India effectively manage traffic flow. The an overall decrease in the cost of air travel Check-in component’s unsurpassed departure and an increase in consumer demand. But The Solution control capabilities simplify traveler processing, the cost of this liberalization in India has By automating some of the check-in functions, both on and off airport grounds, as well as pro- been severe congestion at many of India’s airlines have the ability to provide an enhanced vide the most definitive airport automation solu- key airports, most of which were built in the level of service while still controlling costs. tions available in today’s transportation industry. 1950s. Two airports — New Delhi and Mumbai Automating check-in functions offers custom- After implementing the Check-in com- — account for approximately 50 percent of ers self-service capabilities, freeing agents to ponent, airlines have realized resource cost India’s air traffic. handle special needs. savings of up to 20 percent, primarily through 52 ascend mmmmmmmmmmmm products

staff re-allocation or cost avoidance achieved Highlight by eliminating the need for additional staff to handle operational increases. Airlines utilizing the Check-in component realize considerable With a middle class expected to grow to 400 benefits, including: Increased revenue opportunities — Faster million by 2010 and with new open-skies agree- check-in and shorter lines increase traveler satisfaction, resulting in repeat business. ments and deregulation of India’s air transport Reduced operational costs — Self-service options reduce the need for additional airport industry, many airlines are excited about staff and enable growth at a lower cost. Optimized staff utilization — Enhanced the prospects of the India travel market. traveler-processing options enable staff to improve service to customers outside of the traditional ticketing and check-in counters. until longer-term infrastructure projects are vice check-in are now seen as standard offer- Streamlined deployment — Airport traveler- completed. ings by seasoned business travelers across the processing solutions simplify application Last year, the Sabre Airline Solutions® globe. As India seeks to increase air travel to deployment and maintenance through business worked with Jet Airways to deliver and from the country, these services must be an application service provider approach, Web check-in capabilities for domestic trav- considered and incorporated into the design ­ensuring uniformity across an airline’s elers. And, early this year, kiosk check-in of upgraded and new airport infrastructure. operational network. will debut at Mumbai’s Santa Cruz Domestic Fortunately, the groundwork has been laid and For airports in India, the transition to Airport with a few check-in kiosks. Jet Airways the Indian government and Indian airlines alike self-service check-in alone, Internet and CUSS will implement several dozen kiosks during are working toward an improved airport envi- kiosks, could alleviate many of the symptoms the next few years to help improve the airport ronment to support a very bright future. a of developing infrastructure. Processing pas- experience for its passengers and further dif- sengers away from small, congested ticketing ferentiate the airline from an ever-increasing Mark Canton is director of airport products and check-in areas will streamline this airport- number of competitors. for Airline Passenger Solutions marketing centric activity, helping key airports in India Once perceived as added benefits, ser- at Sabre Airline Solutions. He can be cope with the increase in passenger volumes vices such as electronic ticketing and self-ser- contacted at [email protected].

Telefónica’s U.S.-based operating company based in Miami, Florida, is a leading provider of global corporate communications and managed data center, IT and business continuity services. The company is a wholly owned subsidiary of the Telefonica Group , currently the world’s third largest integrated telecommunications company in terms of market capitalization, and the world’s leading operator in the Spanish- and Portuguese-speaking markets.

With operations in more than 40 countries, Telefónica offers customized solutions and dedicated development teams to multinational companies and the travel industry.

For more information visit: Sabre Airline Solutions www.us.telefonica.com products

Car“go” to India

As cargo operators in and out of India experience a growth spurt, advanced technology will play a key role in ensuring continued success.

By Raja Kasilingam | Ascend Contributor

ndia, one of the fastest-growing econo- from India, making Mumbai and Delhi mini- utilized while airports in large metro cities mies in the world, is the third-most pre- hubs. Emirates’ SkyCargo, the leading Middle are struggling to meet the capacity demand. ferred destination for foreign investment Eastern carrier, and some of the world’s top This poses challenges in terms of information after China and the United States. Nearly 30 five cargo-carrying passenger airlines, such and cargo flow through terminals and ware- percent of India’s international trade moves by as Singapore Airlines Cargo and Korean Air houses. The majority of India’s cargo business air. The growth in trade between India and a Cargo, continue to expand their Indian pres- is handled through agents and forwarders. number of countries, such as China, Germany ence through direct services and alliances. Technology and systems used by the country’s and the United States, coupled with market forwarders are not compliant with international

liberalization is resulting in significant increase Company Boeing The of courtesy Photo standards, and they are challenged with the in freight shipments from India. inability to interface with a carrier’s operating In addition to the expanding exports, system and exchange information across dif- domestic express cargo products have realized ferent carriers. There are also limitations in a significant increase caused by the develop- terms of automated customs interfaces to and ment of assembly plants and parts manufactur- from India. Carriers playing in the Indian mar- ers and the need for on-time and fast delivery ketplace have to ensure that taxes/accounting of critical supplies and documents. During the and interfaces to cargo agents’ invoicing sys- last decade, India’s air cargo market has grown tems cater to the Indian cargo marketplace. beyond 10 percent a year and is expected to The eFreight initiative by the International Air achieve close to 20 percent growth during the Transport Association cargo division could next couple of years. be a significant challenge in India from a cul- tural standpoint. Because India lacks the legal Cargo Carriers in India framework, it cannot support advance sale of The Indian government liberalized bilateral air space or a neutral air waybill, which are critical transport deals with a number of countries, for any air cargo carrier. These operational chal- granted permission for private domestic air- lenges could hamper efficient and transparent lines to fly internationally and plans to spend cargo movement across the carrier network. 177 billion rupees (US$4 billion) to modernize The Boeing 787 Dreamliner will enter ser- Other challenges could also deprive and expand airport facilities to support the vice in 2008, offering more revenue-gener- carriers from maximizing revenue across its growth. Several international carriers, both ating cargo space than any other airplane Indian operations. As carriers expand their passenger airlines and integrators, such as in its class. presence in India, it is important to capture as FedEx, have expanded their presence in India, much market share as possible and carry the and some of the country’s major carriers, such right type of cargo within the constraints of as Air India and Indian Airlines, are seeking Challenges in the Indian the network to increase revenue and maximize to begin freighter operations. Indian carriers Cargo Marketplace profitability. These challenges are related to estimate that their growth in air cargo traffic For most carriers flying to and from India, planning the cargo logistics chain as well as will outpace that of passenger boarding during cargo is increasingly becoming an important managing customers in terms of contracts and the next 20 years. source of revenue. On average, revenue from pricing. One of the key challenges is building Demand for air cargo is growing in India cargo represents 15 percent of the total air the support network to feed cargo in and out of as exports will reach 4.4 trillion rupees (US$100 traffic revenue, up to 40 percent for some air- major airports. This includes aspects such as billion) this year. FedEx expects India’s 20- lines. Inadequate airport infrastructures, secu- a trucking network and partnerships, satellite billion rupee (US$450 million) air express mar- rity systems and outdated technology pose warehouses, and cargo receipt facilities at city ket to grow by 15 percent annually. DHL significant challenges, stifling the growth in locations. Enforcing tendering of cargo within intends to grow its fare share in this market air cargo traffic. Approximately 50 percent of the appropriate time window coupled with by taking control of Blue Dart, a leading cargo international traffic rights remain unused under traffic congestion adds another dimension. The express carrier in India. British Airways World the bilateral system due to airport capacity maturity of forwarders and agents in the Indian Cargo expects to double capacity and revenue constraints. Many of India’s airports are under- cargo market also adds further complexity. 54 ascend mmmmmmmmmmmm products Photo by Frederic Fahraeus/Dreamstime.com Frederic by Photo This challenge manifests in terms of not having good information on characteristics (weight, volume or rate) and cargo not showing up at all or in time for building a flight, as well as not having cargo prepared in a form ready to fly.

The Answer Effective use of advanced technology, such as the Sabre® CargoMax™ Revenue and Pricing Suite, is the answer for India’s freight opera- tors expecting to increase their market pen- etration in India. The CargoMax suite, coupled with business knowledge and experience from the Sabre Airline Solutions® business, enables carriers to overcome the many cargo-related challenges they face. Sabre Airline Solutions has a vast amount of knowledge and expertise in revenue management, revenue account- ing, reservations and operations. Its strong consulting organization specializes in strategic network planning, pricing and product devel- opment for cargo operations aligning people, process, tools and communications. The CargoMax suite offers decision- support and operational systems designed to Air cargo in India is a flourishing business, with market growth beyond 10 percent a year, address some of the key cargo business and which is expected to climb nearly another 10 percent in the next couple of years. operational requirements of an airline such as space control, revenue management, manage- ment reporting, performance measurement, customer response time, accurate and fast bill- Managing Customers and Revenue rating, revenue accounting, invoicing, claims ing, air waybill management, and transparency Managing cargo customers and revenue in a management, inventory control and operations of shipments and containers. growing market requires segmenting custom- planning. ers based on key characteristics such as rev- Technology and Operations Support enue, customer behavior (usage) and type of The Right Tools Reservations Manager and Accounting cargo (density). It also requires managing cargo The CargoMax suite includes four compo- Manager offer technology support necessary capacity in terms of allocations to various prod- nents that interface with industry-standard to run and expand operations and offer a vast ucts, customers and feeder stations. The key systems such as CASS, IDEC, cargo portals range of capabilities, including: is to collect quality data and deploy models and and reservations systems. The suites compo- Interfacing support with local customs algorithms that will work with limited data and nents include: for pre-clearing cargo, booking (for cargo learn as more information becomes available. Sabre ® CargoMax ™ Revenue Manager, which agents), and billing and tracking, Revenue Manager enables carriers to allocate provides decision-support capabilities in cus- Compliance support to eFreight, space and set pricing guidelines to various tomer behavior management, contract nego- Interline communications and online cargo customer, station and product segments. It tiations with freight forwarders, space plan- portals such as GF-X, CPS and Ezycargo to assists carriers in contract negotiations with ning, pricing support, revenue performance support additional booking channels, forwarders and customers to determine price and critical flights management, Technology protocols such as Cargo IMP and and space allocation, and it manages customer Sabre ® CargoMax ™ Accounting Manager, XML messages and connectivity through the “no-show” behavior in terms of not using which offers rating, pro-ration, revenue Internet without the expenses of a commu- the space allocated as agreed upon. The net accounting, invoicing and billing capabilities nications network, impact of utilizing the Revenue Manager is for various airlines, agents and forwarders, Real-time and open-communications func- increased revenue and reduced customer-ser- Sabre ® CargoMax ™ Reservations Manager, tionality. vice failures in terms of offloads. which provides the capability to manage All research points to the fact there will schedules as well as the flow of materials Network and Logistic be more and more carriers operating in the and information from booking through final Framework Planning Indian cargo marketplace. This clearly means delivery to cargo customers. The system To effectively grow, India’s cargo carriers two things: those that have the right tools to also manages flights from booking through should have the necessary logistical support to support planning and operations will have the shipment prioritization and final manifest- receive, store and feed cargo to major airports. capability to sustain growth, and those that ing and interface to load planning, customs The consulting team at Sabre Airline Solutions manage their products, capacity and pricing interfaces, and tracking of shipments and can assist in planning the infrastructure con- effectively will financially succeed. a containers, sisting of warehouses, feeder network and alli- Sabre ® CargoMax ™ Claims Manager, which ances. Revenue Manager can help maximize facilitates claims filing, processing, tracking the freighter network by optimizing supply and and settlement. demand, including planning freighter routes, Raja Kasilingam is vice president The full suite drives significant value for aircraft type and frequency. The net effect is of cargo products for Sabre Airline carriers in terms of revenue enhancement, pro- seamless integration with a carrier’s network Solutions. He can be contacted at ductivity improvement, service improvement, into major hubs in terms of cargo movement. [email protected]. mmmmmmmmmmmm ascend 55 products

Rapid Reaccommodation: Attaining Higher Levels of Customer Service

Advanced technology, such as Sabre Reaccommodation Manager, helps airlines quickly respond to flight cancellations and delays by efficiently rebooking customers on alternate flights. Photo by Kamal Narang/The Hindu Narang/The Kamal by Photo

By Apurva Mathur | Ascend Contributor

he odds are that it could happen to any number of airline passengers. Statistics T show that one out of every 20 flights last December, specifically during peak seasons, was likely to be canceled either by weather, mechanical failure or some other unforeseen event. With almost 233,000 flights scheduled worldwide from Dec. 22 through Jan. 1, that amounts to more than 1,000 flights that would have been cancelled or diverted every day during one of the busiest times of the year. For most passengers, a cancelled flight means much more than just a delay getting to their destination. It typically means standing in long lines at the airline ticket counter or being put on hold trying to find and book the next available flight. And some are also faced with Thick fog often contributes to flight delays and cancellations at the IGI Airport in New Delhi, finding new connecting flights to their final India. Advanced technology can quickly help reaccommodate passengers when flight destination. For some, it might mean spending disruptions occur. that important family holiday in the airport wait- ing for flight accommodations while folks gath- er anxiously for the arrival of their loved one. been developed by the Sabre Airline Solutions® schedule changes. Today, technology can minimize the business to revolutionize how airlines re-route The system integrates with Sabre® Movement impact of disruptions. For a passenger travel- passengers affected by disruptions and long- Manager to acquire the latest flight schedule ing from Houston, Texas, to St. Petersburg, term schedule changes. changes. Russia, via Chicago, Illinois, a flight delay could The tool offers quick, optimal solutions that create havoc with an itinerary. If the original System Capabilities and Benefits are readily deployable, including optimization itinerary called for a connection in Chicago Reaccommodation Manager can help airlines with “what-if” scenarios and the ability to to London followed by a flight to Moscow’s recover from a number of unexpected events define business rules for reaccommodation. Sheremetyevo International Airport and then on through a range of capabilities and benefits: One of the key benefits of Reaccommo- to another flight to St. Petersburg, a two-hour Through automation, standard procedures dation Manager is the rapid rebooking process delay in Houston due to a mechanical issue and optimization, the system helps airlines that is based on specific parameters, such as could cause the passenger to miss a connecting quickly reaccommodate customers during customer value, class of service, frequent flyer flight, leaving the passenger anxious and need- flight disruptions. status and special passenger requests. The ing to know how to get to the next destination. The Web-based tool enables airlines to system provides passenger coordinators with In situations like this, Sabre® Reaccommo- review and manage flight disruptions and a simple three-step process to understand, dation Manager, a new, advanced automatic impact on passengers in real time. manage and rebook entire itineraries during passenger reaccommodation tool, can come The system generates multiple solutions by disruptions. Reaccommodation Manager was to the rescue of airport staff, airline person- prioritizing passengers and optimizing net- designed to handle multiple disruptions at a nel, and, most importantly, airline passengers. work availability. time, rebook the vast majority of airlines’ cus- Reaccommodation Manager was designed to The tool works directly with reservations and tomers and eliminate the need for sequential deliver optimized and smart reaccommoda- departure control systems to obtain passen- rebooking. During times of disruption, frontline tion solutions when schedule changes occur, ger name records and availability data. staff and customers will be informed promptly whether it is day-of-operations or long-term rev- The solution helps airlines manage day-of- of new flight details, and customers will be enue management changes. The system has departure and revenue management flight able to receive their rebooked flight details 56 ascend mmmmmmmmmmmm products

via short message service, e-mail and other electronic means. For passengers, the benefits of an airline using Reaccommodation Manager become immediately apparent. With the system, the traveler would walk up to a self-serve kiosk to get her tickets and find her revised itinerary displayed. Reaccommodation Manager would look at her itinerary end to end and run through all the possible flights departing Houston and heading toward Europe, possibly via connec- tions within the United States, and on to her final destination of St. Petersburg. The system has the ability to solve the problem in several ways, including: Booking a passenger on a Lufthansa flight from Houston to Frankfurt connecting in Frankfurt to St. Petersburg, Booking a passenger on a flight to New York from Houston and connecting on a flight to London Heathrow and then to St. Petersburg. The system would look at the itinerary of every passenger on the British Airways flight to London Heathrow and review each passenger’s customer value, frequent flyer status, fare paid, etc. It would then build revised itineraries based on each passenger’s origin-and-destination information using airline- defined parameters. In a matter of minutes, Reaccommodation Manager enables airlines to sort through all possible flight options to determine the best alternative for cancelled or delayed flights. The system automatically books the substitute flight, issues a boarding pass via an airport kiosk or at home via the online check-in tool (or even in flight if the airplane is equipped with an on-board printer) Reaccommodation Manager can quickly identify passengers who have been impacted by a to inform travelers about cancelled connect- schedule disruption and run a series of scenarios to determine the best reaccommodation ing flights — and all this can be achieved options. without customers ever having to talk to a gate agent. Reaccommodation Manager also pro- vides airlines the ability to determine the impact Operations control — Evaluates passenger very best experience every time they book and of changes to a long-term schedule for booked impact of a cancellation or delay in what-if fly with us,” said Rod Butchers, manager of passengers. For those booked on flights that mode, operations delivery for Air New Zealand. “By are impacted by future schedule changes, Customers booked on a combination of inter- adding Reaccommodation Manager to our airline coordinators can use Reaccommodation national and domestic flights — Provides existing portfolio of Sabre Airline Solutions Manager to quickly find the best replacement true origin-and-destination rebooking, not technologies, we aim to deliver a superior level flights to get passengers to their final destina- just for the affected flight segment, of service by reducing the problems associated tions. The tool can also be used to evaluate the Customers whose itinerary includes host with flight disruptions. For example, passenger cost of rebooking passengers prior to making airlines as well as other airlines during day of rebooking can be taken into consideration the schedule change. operations — Rebooks passengers on other when we decide if a flight needs to be can- airlines even though the impacted flight is celled, delayed or diverted to alternate Who Will Benefit? on the host airline, ­destinations. And when we do have disrup- Several areas within an airline as well as Highly valued customers (platinum, gold, tions, it is stressful for all our passengers and customers will benefit from the rapid response frequent flyer) — Provides consistent, high staff. In the time it takes to rebook passen- of Reaccommodation Manager, including: levels of customer service. gers, long lines at the airport form and Revenue management — Enables airlines Air New Zealand became the first air- ­customers become frustrated and demand to to rebook passengers for seasonal schedule line in the world to select Reaccommodation know what is happening. We are trying to take changes in addition to day of departure, Manager to ease the plight of passengers that stress away.” a Passenger coordinators — Enables them to whose traveling plans are disrupted by flight participate in the decision-making process of delays or cancellations. Apurva Mathur is director of flight flight cancellations and delays, “We strive to offer world-class cust- operations products for Sabre Airline Airports — Provides information in a timely omer service and are constantly looking at Solutions. He can be contacted at manner about passenger rebookings, ways to ensure our passengers receive the [email protected]. mmmmmmmmmmmm ascend 57 products

The Right Fix

One of India’s most prominent software companies, Ramco Systems Corp., is taking the lead in providing maintenance, repair and overhaul solutions to carriers in India and around the world.

By Allan Bachan | Ascend Contributor

s one of the most populous nations on More Than Just Software the planet, and with an economic annual Agrowth of 7 percent, India’s aviation market has considerable annual revenue Customer potential. Last year, Indian carriers placed support more than 500 billion rupees (US$12 billion) in new aircraft orders, increasing the need for airlines to place a strong emphasis on the cost Training Business process of maintaining their planes as well as automat- modeling ing their processes to effectively operate in a heavily regulated business. Carriers such as Indian Airlines and newly launched SpiceJet rely on the exper- tise, knowledge and automation of India’s top technology provider, Ramco Systems, which Robust has helped set their businesses in motion by Delivering creating software that fits their specific needs solutions Systems as well as those of a rapidly evolving industry. value definition With a keen understanding of the aviation industry and expertise dating to 1938 when its parent company, the Ramco Group, was estab- lished, Ramco Systems, which has teamed with the Sabre Airline Solutions® business to offer its systems to airlines around the world, Project is at the forefront of India’s expanding avia- Custom planning and tion and MRO market and continues helping components administration emerging airlines worldwide by creating appli- cations that help achieve their business objec- Legacy tives as well as address regulatory needs. Ramco Systems, one of the leading integration software providers for maintenance, repair and overhaul operations, has helped MRO service providers world wide address airlines’ issues. Implementing the Ramco MRO System begins with business process modeling and is Ramco Systems has been doing the same for ­managed strategically to ensure every aspect of the process — from defining the right various carriers for more than a decade, using ­solution and building timelines to systems integration, customer service and training — ground-breaking technology and innovative is successful. ways of creating applications that tackle the changing needs of the industry. Ramco’s avia- tion solution addresses all aspects of aviation Line, heavy and shop maintenance; rable workflows to create and maintain new management, including: Materials management and logistics; business processes that help airlines run an Technical records; Financials; effective and efficient enterprise. In addition, Quality; Human resources; the solution incorporates processes tailored Engineering; Sales; to carriers’ specific unique needs, enabling Technical operations; Decision support — performance dashboards. them to easily refine processes as their envi- Production planning and control; The tool also uses strong built-in configu- ronment changes. 58 ascend mmmmmmmmmmmm products Photo courtesy of Airbus of courtesy Photo

In 2005, new aircraft orders in India exceeded 530 billion rupees, which will eventually drive the need for more maintenance, repair and overhaul technology and services.

Ramco’s aviation solutions meet the Highlight business requirements of passenger and cargo carriers as well as MRO providers regardless of size, complexity and geographic Ramco Systems, which has teamed with the Sabre location. It encompasses a diverse range of airline and MRO services, including: Airline Solutions business …, is at the forefront of Aircraft maintenance planning and ­execution; India’s expanding aviation and MRO market … Components such as task/job card ­management with features including ­electronic sign off and paperless records; Engineering and technical records Solution Highlights Class II electronic flight bag. ­management; The Ramco System offers a number of features To address the market requirements of Aircraft operation management including and benefits: faster turn-around time, better productivity, functionality such as electronic flight bag Pure browser-based Web-centric solution, cost-effective operations and customer satis- and aircraft routing; host-in or host-out options; faction, airlines and MRO service providers Logistics management including warehouse Pre-built software solutions available in need to be equipped with solutions that are management; ­multiple technologies; comprehensive yet cost effective. With chang- Procurement of aircraft and non-aircraft Proven integration into third-party human ing times, these solutions need to be scalable parts; resources, payroll, finance solutions and yet robust, and Ramco Systems has developed Outsourcing of repair activities, warranty, legacy applications; solutions that exceed airlines’ MRO expecta- part loans and rentals with features such as Extensive vendor management capabilities tions and requirements. a bar coding and RFID; and material management capabilities; Human resources management; Electronic signatures and extensive workflow Allan Bachan is maintenance, repair Sales management; automation and alerting; and overhaul product manager for Financial management; Add-on capabilities: Sabre Airline Solutions. He can be Aviation analytics. Digital dashboard — aviation analytics, contacted at [email protected]. mmmmmmmmmmmm ascend 59 O p e n i n g doorth e

By seeing the potential of the India market, Perot Systems helped launch an economic surge that is benefiting the country’s airlines. Highly decorated executives from Perot Systems Corp. held a press conference in Chennai, India, in March — from left: Anuroop Singh, director; Peter Altabef, president and chief executive officer; Padma Ravichander, managing director of technology services; Ross Perot, Jr., chairman; and Anurag Jain, vice president of business process solutions.

ast December, Perot Systems Corp. the best talent in the world,” said the current announced the launch of information chief executive officer, Ross Perot Jr., in an L technology infrastructure operations from interview with The Dallas Morning News. its Noida and Bangalore, India, facilities. The The move into India was once seen as Plano, Texas-based company also dedicated a a pioneering and risky move. But by the time new office tower at its Noida campus, continu- Perot Systems announced that it would buy ing the steady expansion of its India footprint HCL’s interest in the company for US$105 and employee base. million in 2003, the move made sense. In As one of the first large international the seven years leading up to the purchase, companies to see the business potential in customers were pressuring computer services India, Perot Systems helped pave the way for firms such as IBM, which once enjoyed huge other multinationals to expand their presence profit margins to handle technology operations in the country. Now, the growth of these coun- for corporate clients, to do more work for less. tries in India is helping fuel an expanding econ- They demanded the firms outsource work to omy, which, in turn, is contributing to a growth India or other low-wage countries such as the in air transportation. The presence of these Philippines and Russia. That kind of demand companies also increases travel demand, as forced computer services firms to start opera- executives fly from corporate headquarters tions in India and other low-wage countries around the world to visit facilities and opera- just to stay competitive. tions within India. In March 2005, Perot Systems further Perot Systems is a underscored the importance of India and the global provider of technol- Asia/Pacific region to its long-term growth

® ogy-based business solu- strategy at a meeting of its board of directors tions in targeted industries in Bangalore. The meeting was historic, as it including healthcare, gov- was the first board meeting of a major U.S. ernment and commercial multinational IT corporation in India. In bring- markets. The company’s India-based team ing the board to India to review its corporate By Lynne Clark | Ascend Staff — which also includes business process oper- strategy, Perot Systems signaled its commit- ations in Chennai — is expected to grow to ment to seizing the global opportunities in the around 6,000 associates by the end of the technology services industry. year. That would make the Perot Systems staff During the March meeting, Perot Jr. in India total one-third of the company’s staff commented on the company’s emergent busi- worldwide. ness opportunities for India, “The board of “This is a significant accomplishment directors of Perot Systems is here as a result for Perot Systems because we now are ‘three of the hard work that has gone into build- deep’ in both India and the United States — ing a strong global business. The company with applications, infrastructure and BPO capa- has achieved a lot in a relatively short time bilities in two world staging locations,” said frame, but in many ways we are only just Padma Ravichander, managing director of the beginning to reach our potential, given the company’s global applications solutions divi- opportunities before us and the strength of our sion and senior executive for Perot Systems capabilities — especially in India.” in India and Asia/Pacific, during a press confer- Perot systems President and CEO Peter ence for the Noida office tower dedication. Altabef said, “Perot Systems’ India operations When Perot Systems began a joint ven- are a cornerstone of our emerging global deliv- ture with India firm HCL Technologies in 1996, ery model of integrated IT, BPO and consulting few technology services firms had tapped into solutions. It is important for the board to meet the area. Morton Meyerson, the company’s here as we work to provide more solutions for chief executive officer at the time, foresaw our customers, opportunity for our employees the advantages of India’s growing number of and value for our shareowners.” a engineering graduates. “He saw that information technology Lynne Clark can be contacted at was globalizing quickly, and we needed to find [email protected]. Photo by Dinodia Photo Library mmmmmmmmmmmm ascend 61 A Game-Winning Chess board photo by Shutterstock.com/Kit Sen Chin Background photo by Shutterstock.com/Sia Yambasu Plane photo by Danielle McLelland Addis AbabaS-based Ethiopian Airlines,tr which has continueda to buildte gy its network, expand its fleet and explore additional methods of earning revenue, is at the top of its game in Africa’s air travel market. By Christian Gossel | Ascend Contributor regional

ince its first flight to Cairo, Egypt, in Airlines’ M&E division, a U.S. Federal Aviation ty will hold 104,000 tons per annum and will be April 1946, Ethiopian Airlines has steadily Administration-approved facility, has contrib- equipped with a modern 1,500-square-meter S expanded its network. The carrier began uted significantly to the airline’s bottom line, cold room designed to support a turnover of operations with five Douglas-McDonald DC-3s and to support its continued growth, the carrier 130 tons of palletized cargo per day. serving four routes in Egypt, Djibouti, Yemen will build a 7,200-square-meter state-of-the-art A combination of its continually expand- and Ethiopia. Today, it serves 44 international maintenance hangar that will accommodate ing network, increasing passenger traffic, destinations in Africa, Europe, the Middle East, two Boeing 767 aircraft concurrently. secondary revenue streams, forward-looking Asia and the United States with a fleet of 23 Cargo presents another important technology (such as Sabre® PC AirFlite™ flight aircraft. And, with 26 destinations in Africa, its source of revenue for the carrier. Almost 12 scheduling system and Sabre® FliteTrac® sys- African network is unrivaled. percent of its revenue comes from freight tem) and exceptional staff, Ethiopian Airlines “For the past 60 years, we have been services, and its cargo business continues has the right formula to maintain its status as connecting the world to more of Africa than to expand. To meet the growing demand for Africa’s World Class Airline.

any other airline,” said Ethiopian Airlines Chief Airlines Ethiopian of courtesy Photo Executive Officer Girma Wake. “At the same time, we are opening up our continent to busi- ness and tourism with our worldwide network. We are proud to fly the flag as Africa’s ‘World Class Airline.’” To support its expansion, Ethiopian Airlines acquired six Boeing 767-300ER and five Boeing 737-700s, which were delivered last July. The second phase of the fleet mod- ernization program began with the order of 10 Boeing 787 Dreamliner aircraft, with delivery of the first one slated for 2008, boosting its fleet to 33. “We continue to expand to meet the demands of a burgeoning African economy with an aggressive fleet acquisition program of 21 new aircraft: six Boeing 767-300ERs, five Boeing 737-700s and 10 Boeing 787 state-of- the-art future craft,” Wake said. Recently, the airline took yet another sig- nificant step forward by modernizing its visual image with a new logo and aircraft livery. “The fresh, new look keeps faith with the past while, at the same time, announces the dawn of the era,” Wake said. A key feature of the fleet expansion and enhancement of Ethiopian Airlines is its emphasis on the skill and expertise of its As part of its continued growth and success, last year, Ethiopian Airlines took ownership nearly 4,600 employees. The massive invest- of six Boeing 767-300ER and five Boeing 737-700s. ment in training (two-thirds of its employees undergo some form of training every year) and technology (a state-of-the-art flight simula- tor and an acclaimed, internationally certified maintenance and engineering center) ensures the export of flowers, fruits and vegetables, “What does it take to become Africa’s the airline’s fundamental philosophy. Ethiopian Airlines will need to increase its ‘World Class Airline’?” Wake asked. “It takes Ethiopian Airlines has established one freight operations frequency, which will, in people dedicated to safety and service — of the finest pilot and aviation maintenance turn, boost inbound cargo capacity. Ethiopian safety and reliability are traits every airline training centers in Africa. While it provides an Airlines, in conjunction with its European cargo should share. It takes modern technology unsurpassed facility for its own pilots and tech- general sales agents, is aggressively marketing investment and planning with vision; it takes nicians, it also offers training to airline person- the added capacity. And the airline continues outstanding corporate citizenship that en- nel from other companies in Africa, the Middle exploring ways to convert older passenger ables us to play a vital role in the socio- East and Europe, creating ancillary revenue. aircraft into freight planes to accommodate the economic development of this great conve- Not relying only on revenue from car- rise in cargo traffic. nience of ours, which we affectionately refer rying passengers, Ethiopian Airlines is a sig- “If passengers are the lifeblood of our to as our ‘first world.’” a nificant player in providing maintenance and airline, cargo is the muscle,” said Ayenew training services to other airlines in the region, Alemneh, director of cargo marketing for such as Chanchangi Airlines, Air Burundi, Ethiopian Airlines. “Our dedicated cargo fleet ADC Airlines and Congo Presidential Aviation. works tirelessly to supply world markets with the Christian Gossel is a Europe, the The airline’s maintenance center is also products of Ethiopia and our African neighbors.” Middle East and Africa-based account employed by Middle East carriers Phoenix To facilitate the increase in freight traffic, director for the Sabre Airline Solutions® Aviation and Dolphin Air; Russia’s Transaero construction of a new, modern cargo terminal business. He can be contacted at and Boeing from the United States. Ethiopian was completed last November. The new facili- [email protected]. mmmmmmmmmmmm ascend 63 talking to the travel trade reach the online targeted and measurable travel trade online marketing

Travelmole.com is the leading Benefit from TravelMole.com’s industry reach through our advertising and marketing online community for the travel opportunities based on: and tourism industry with √ a wide-range of cost-effective executions subscribers from 132 countries. √ geographical and industry sector targeting √ closely monitored campaign performance √ ability to optimise return on investment We offer advertisers unrivalled online access to practitioners and decision-makers who Online advertising and e-mail marketing use our daily news coverage and analysis to spend continues to grow apace and keep abreast of industry developments. TravelMole.com is always seeking to provide the best opportunities to: Travelmole.com delivers: √ deliver value to our advertising partners √ 2.7 million copies of TravelMole √ bring relevant marketing messages to our eNEWSWIRE distributed globally every audience month (720,000 for UK edition). √ 1.6 million copies of TravelMole contact TravelMole eNEWSWIRE read globally each month (468,000 for UK edition) Contact our sales and marketing advisors for further information on advertising √ 1.4 million page views on TravelMole opportunities to enhance your message WEB SITE every month (537,000 for UK to the travel trade: web site). Thomas Thiollier, Mike Imrie or √ bespoke emails to 100,000 unique Graham McKenzie professional users Tel. +44 0870 438 1045 Ext. 2. Email: [email protected] regional

Remote Access

Four Canada-based airlines provide service to some of the country’s most remote towns, filling a need for travelers who would otherwise have little or no travel options.

By Rick Dietert, Holly Burkholder and Michelle Priller | Ascend Contributors

anada, because of its expansiveness and provide vital air links to remote areas within 30,000 Inuvialuit and Inuit shareholders. In the remoteness of some of its towns and Canada that would otherwise be lacking. fact, the carrier’s motto is “Your North, Your C cities, has a rich airline history. And while Airline,” and its tail motif is a polar bear in front most people around the world will recognize Canadian North of the midnight sun. the Air Canada brand and most likely the up- Yellowknife, Canada-based Canadian North Canadian North operates five 737-200 and-coming low-cost carrier WestJet, there serves the Northwest Territories, which is combis, a 737-200 and a Fokker 28 and serves are several smaller niche carriers that serve 1,346,106 square kilometers (538,442 square remote cities, including Yellowknife, Ranklin a vital transportation need for many Canadian miles) with a population of about 42,000, and Inlet, Hay River, Norman Wells, Cambridge citizens. the Nunavut Territory, which is 2,093,190 Bay, Inuvik and Iqaluit. The airline also serves Some of these regional carriers, such as square kilometers (837,276 square miles) with Calgary, Ottawa and Edmonton.

Canadian North, Central Mountain Air, Bearskin 29,300 citizens. The region is primarily inhab- Corporation Jupiterimages by Photo Airlines and First Air, while small compared to ited by native residents including Inuvialuit traditional airlines, strive to provide the same and Inuit. or even better service than their larger inter- Originally created by Canadian Airlines national counterparts. In doing so, they are in 1990, Canadian North was purchased in investing in state-of-the-art technology to help 1998 by the Air Nortera Group, a holding com- enhance customer service and continue to pany that is 100 percent owned by more than Photo by Chris Sand/JetPhotos.net Several Canada-based regional airlines, such as Canadian North, serve some of the country’s most remote cities and towns, such as Yellowknife (right). mmmmmmmmmmmm ascend 65 regional Photo courtesy of Central Mountain Air Mountain Central of courtesy Photo

Many of Canada’s small, remote northern towns rely on air service from airlines such as Central Mountain Air to connect them to other parts of the country. Photo by Jupiterimages Corporation Jupiterimages by Photo

it can offer a range of other customer ser- Central Mountain Air vices such as fare-led itinerary searches. The Central Mountain Air was established in 1987 airline will also implement several other solu- as a charter airline flying DC-3s and float tions, including: planes to northern British Columbia to min- Sabre® Virtually There® Web site, which ing and guide outfitting areas. It is a privately enables customers to automatically receive owned airline that serves more than 17 com- reservations confirmation via e-mail as well munities in British Columbia and Alberta. The as obtain information about their destination carrier employs more than 300 people and such as local weather and flight status, is headquartered in Smithers, British Columbia, Customer Insight, a module of SabreSonic™ with sales and marketing offices in Calgary. Res that provides an integrated customer Central Mountain Air operates 14 relationship management tool that enables 18-seat Beech 1900Ds and a Dornier 328. consistent customer service regardless of Some of the cities served by Central Mountain the method customers use to book their Air in British Columbia include Campbell River, The carrier has partnerships with other flights, Comox, Fort Nelson, Fort St. John, Kamloops, regional airlines such as Kenn Borek Air Ltd., Web Check-in, a module of SabreSonic™ Kelowna, Prince George, Quesnel, Smithers, Aklak Air, Calm Air, Air Tindi and North-Wright Check-in that enables customers to check in Terrace, Williams Lake and Vancouver. Airways, and it accepts connections from Air from remote locations via the Internet. Kamloops and Kelowna are especially popular Canada and has supported EDIFACT through While Canadian North has carved out a destinations with rapidly expanding tourism and check-in capabilities with the airline for a num- niche market in a remote area of Canada, its skiing operations. Other communities served ber of years. As the International Air Transport desire to provide an exceptional level of ser- in Alberta include High Level, Lloydminster, Association’s mandate for 100 percent elec- vice, in part, through its recent technological Rainbow Lake, Calgary and Edmonton. tronic ticketing approaches, Canadian North is advancements, will help strengthen its brand Several scheduled flights are operated under also preparing to set up an interline electron- and encourage repeat business. Air Canada flight numbers as part of a ic ticketing agreement with codeshare agreement.

Air Canada via the Interline Airlines Bearskin of courtesy Photo Central Mountain Air Electronic Ticketing Hub, a has recently selected the Res module of SabreSonic™ Ticket. component and utilizes the While Canadian North Web component for its online has always done everything booking engine. In addition, possible to provide excel- Central Mountain Air is also lent in-flight service, which setting up interline electron- includes hot meals with exotic ic ticketing with Air Canada dishes such as bison pot pie via the Interline Electronic and an excellent choice of Ticketing Hub. wines on most flights, it is expanding its customer-service Bearskin Airlines offerings to include improved Founded in 1963 by John online flight booking features Hegland, Bearskin Airlines and Web-based check-in pro- — nicknamed the “Bear” cesses. Canadian North has — was named after Bearskin offered Web booking options Bearskin Airlines, or “The Bear,” operates more than 200 daily departures, Lake located in north- for several years and will soon servicing remote towns and cities throughout northern Ontario and ern Ontario and is another utilize SabreSonic™ Web, an Manitoba with its fleet of more than 30 aircraft. Canadian regional airline that advanced booking engine, so primarily serves the needs 66 ascend mmmmmmmmmmmm regional Photo by Michael Durning/Airliners.net Michael by Photo of the First Nation population of northern Canada. Bearskin Airlines has more than 375 employees and its main offices are in Sioux Lookout and Thunder Bay, Ontario. Today, Bearskin Airlines operates more than 200 daily departures that serve northern Ontario and Manitoba communities including Dryden, Fort Frances, Flin Flon, Kapuskasing, Kenora, North Bay, Lynn Lake, Red Lake, Sioux Lookout, Sault St. Marie, Sudbury, The Pas, Timmins, Thunderbay, Ottawa and Winnipeg. Bearskin operates a diverse fleet of more than 30 aircraft that includes seven Fairchild Metroliners, six Beech 99s, four Beech King Air 100s, four Pilatus PC-12s, and a number of First Air, which provides scheduled services, freighter operations and charter service to the Piper Aztecs and Cessna 337s. remote cities of the Northwest Territories, operates Boeing 737 aircraft, which display a tall Bearskin Airlines strives to offer excel- Inukshuk on every tail. lent customer service to its passengers, and it produces its own in-flight magazine, Bear Country, which promotes tourism to northern into a personal travel bank that can be used for from Bradley Air Services, founded by Russ Ontario and Manitoba and highlights the unique future online bookings. In addition, Bearskin Bradley almost 60 years ago, and later ex- culture of the First Nation tribes. Bearskin Airlines is improving its service by setting up panded through acquisition of other air- Airlines also has a commercial agreement with interline electronic ticketing with Air Canada. lines including Ptarmigan Airways and NWT Air Canada and participates in the Aeroplan As the employees of Bearskin Airlines Air. Today, the company is owned by the frequent flyer program. like to say, “When flying in Bear Country, let Makivik Corp., an Inuit corporation, and oper- The carrier has turned to the Sabre the ‘Bear’ take you there.” ates under the motto, “First Air, the Airline Airline Solutions® business to provide addi- of the North.” tional passenger service features that include First Air First Air combines a mix of sched- reservations, departure control and Web com- First Air, another northern Canada operator, uled service, freighter operations and char- ponents within the SabreSonic™ Passenger serves the remote cities of the Northwest ter service that is supported by more than Solutions. Bearskin is also the launch customer Territories and proudly displays a tall Inukshuk, 19 aircraft, including Boeing 737-100s/200s for the new Sabre Airline Solutions travel bank which is a traditional Inuit marker, on the combis, Boeing 727-200 combis and freight- feature that enables airlines to refund tickets tails of its Boeing 737 aircraft. First Air evolved ers, ATR-42s, HS-748s, and a Lockheed 382 Hercules. Its charter service mainly supports the Canadian government and mining opera- Inuvik, Canada, served by Canadian North, is located on the Mackenzie Delta, Canada’s tions in the northern Arctic. The scheduled largest fresh-water delta, close to the Arctic Ocean. A remote destination with a view of the service and cargo operations serve more than Richardson Mountains, Inuvik is the gateway to other northern communities in Canada. 225,000 passengers and 22 million kilograms

Photo by Jupiterimages Corporation Jupiterimages by Photo (24,200 tons) of freight in a year. Service is pro- vided to connect more than 24 northern cities including the major cities of Ottawa, Montreal, Winnipeg and Edmonton. First Air also partners with Air Canada and participates in its Aeroplan frequent flyer program. A long-time user of the Res compo- nent, First Air has also been taking advantage of some of the new tools that Sabre Airline Solutions has rolled out including its new Web component booking engine and is also setting up functionality to allow interline elec- tronic ticketing with Air Canada via the Interline Electronic Ticketing Hub. As these carriers’ capitalize on advanced technology, they’ll continue to provide links between remote communities as well as the business centers of the country. a

Rick Dietert, Holly Burkholder and Michelle Priller are North American-based account directors for Sabre Airline Solutions. They can be contacted at [email protected], [email protected] and [email protected]. mmmmmmmmmmmm ascend 67 From Planning Through Execution Photo by Dreamstime.com by Photo

By Stephani Hawkins | Ascend Editor-in-Chief

Market. Sell. Serve. Operate. To the general plex, but when an airline needs to make population, they are four simple words, but to improvements in one or more of the four airlines around the world, they are the backbone critical areas of its business, it’s clear which of a successful business. Optimum manage- products within the Sabre Airline Solutions ment in these four areas is essential to running a portfolio is best suited. long-term, healthy airline. And excelling in these From planning through execution, the areas, from planning through execution, dis- Sabre Airline Solutions product portfolio is tinguishes the successful airlines from their structured to help airlines — any size, any- competitors. where in the world using any business model Technology plays a vital role in an air- — better market, sell, serve and operate. line’s ability to effectively and efficiently mar- ket its schedules to customers, sell more Market market tickets through preferred distribution channels, Sabre Airline Solutions offers airlines an elite serve its customers and manage daily opera- group of products to market their inventory. tions. A premium airline software provider The Market product group helps airlines deter- needs to be aligned with an airline’s needs in mine how best to offer their schedules to Sabre® SmartFlow ™ tool kit, these main areas. customers and how to make the most revenue SabreSonic™ Inventory. In recent years, many airlines have taken from the schedule using superior products to drastic steps to simplify their operations and manage fares and cargo as well as leveraging Sell remove as much complexity as possible. And passenger revenue accounting applications. The Sell product group enhances an with a strategic software provider, a more Other Market applications give airlines valuable airline’s ability to reach customers through diverse and comprehensive portfolio can help insight with data collection and global distribu- its preferred distribution channels by pro- airlines streamline operations through integrat- tion system evaluation. An airline’s loyalty pro- viding booking engines, channel distribu- ed systems, bringing more value to airlines. gram establishes long-term customer relation- tion, customer relationship management, However, if not well organized and managed, ships with the most highly valued customers. sales data analysis, reservations, shopping a broad portfolio can become unclear and Products supporting an airline’s market needs options and ticketing solutions. Sabre Airline confusing. include: Solutions helps airlines sell intuitively, using Sabre Airline Solutions offers leading Quasar ™ passenger revenue accounting sys- advanced tools to plan and analyze data, airlines a product portfolio that has unmatched tem, including: breadth and depth compared to any other Sabre® AirFlite™ Planning and Scheduling Customer Data Delivery, provider in the world. And to ensure airlines Suite, Customer Insight, can quickly identify which of its more than Sabre® AirMax ® Revenue Management Suite, Sabre® Qik ® Business Processing Solutions, 100 systems best meets their needs, the Sabre® AirPrice™ fares management system, Sabre® WiseVision™ Data Analysis Suite, portfolio has been strategically divided into Sabre® CargoMax™ Revenue and Pricing SabreSonic™ Res, the key areas of “market, sell, serve and oper- Suite, SabreSonic™ Shop, ate.” The scope of its 15 product areas and Sabre® GDS Analysis, SabreSonic™ Ticket, 10 product suites might ordinarily seem com- Sabre® Loyalty Suite, SabreSonic™ Web. 68 ascend mmmmmmmmmmmm Successful airlines are able to market their service, sell tickets, serve customers and operate efficiently. The Sabre Airline Solutions® business has tools designed to help airlines achieve each of these strategic goals. Photo by Dreamstime.com by Photo Ermel/iStockphoto.com Christoph by Photo Mansi/iStockphoto.com René by Photo

sell serve operate

Serve ment; crew management; flight scheduling; execution, many Sabre Airline Solutions sys- The Serve group offers applications to accom- and dining and cabin services. The vital tems, such as the AirMax suite and the modate passengers requiring special services Operate products oversee an airline’s daily AirPrice system, are integrated, helping further and to manage airport staff while handling operations — ensuring that flights leave and optimize the effectiveness of critical business passenger check in from home, curbside arrive on time, or, the in case of an unex- areas. and gate. Delivering an easier experience pected disruption, can be quickly and efficiently Providing end-to-end solutions is only for customers throughout the travel process handled. Solutions designed to help airlines half of the equation for a well-rounded, solid, improves customer satisfaction by providing operate with maximum efficiency include: reliable software provider. Understanding aids for trip organization. Advanced solutions Maintenix ® MRO System, how each product can best be utilized by are available to help airlines excel in these Ramco MRO System, airlines and determining which functional areas, including: Sabre® AirCrews® Crew Management Suite, areas they support is just as critical. The Sabre® InformSM mobile services, The AirFlite suite, simplified arrangement of the Sabre Airline The Qik solutions for customer processing, Sabre® AirOps™ Flight Operations Suite, Solutions portfolio is indicative of its Sabre® Virtually There® Web site, Sabre® AirServ ® In-flight Solutions, thorough understanding and knowledge of SabreSonic™ Check-in. Sabre® Flight Control Suite, the airline industry and what drives a thriv- Sabre® GS Fusion™ Ground Support Suite, ing business. That, combined with its range Operate Sabre® Rocade® Airline Operations Suite, of state-of-the-art solutions for any type The Operate group delivers integrated solu- Sabre® Streamline™ Resource Management of airline in any nation is what differenti- tions for a system’s operations control Suite. ates Sabre Airline Solutions from any other center, including flight planning; opera- technology provider in the world … and that tions and disruption control; maintenance, In addition to helping airlines better market, combination will help many airlines soar repair and overhaul; staff and gate manage- sell, serve and operate from planning through above the rest. a mmmmmmmmmmmm mmmmmmmmmmmm ascend 69 company

Talking Technology With … Richard Ratliff, Senior Research Scientist, Sabre Holdings Competitive Revenue Management: The Next Level

Through the use of choice modeling, the latest in revenue management technology, historical average uring the past few years, revenue man- agement technology has been advanc- demand assumptions are becoming a thing of the past. D ing at a rapid pace, and most of these advancements involve how to best respond New choice-based demand forecasts will enable airlines to competitive changes in the marketplace. Effective pricing and revenue management to quickly identify when they are under or over priced technology involve getting the right price for maximum revenue. Unfortunately, an airline’s in comparison to their competition. “right price” in a market can’t be determined without considering competitors’ fare levels, restrictions and schedules. assumptions obsolete. New data sources, Changes in Revenue Keeping track of an airline’s current such as low-fare shopping results, are used to Management Technology competitive situation can be a daunting task. capture available fares by carrier for origin-and- One important enabler for competitive rev- The sales and marketing teams must keep destination markets and dates, thus allowing enue management is improved data collec- track of the current competitive state across rapid identification of situations in which car- tion. During the past 18 months, the Sabre a very large number of market, fare, departure riers are under or over priced relative to their Holdings™ business has put significant effort date and return date combinations: marketplace competition. into retaining results from low-fare search Markets — Non-stop flights plus connecting requests and storing this history to a data markets often number in the tens of thou- Changes in the warehouse. These low-fare search requests sands for a large carrier. Business Environment for a particular O&D market, departure date Competing airlines — There are typically Recent years have seen significant changes in and return date provide insight into the several per market. the underlying airline fare products. New fares relative competitiveness of various airline Fares — Millions of active fares are stored in with fewer rules and restrictions have resulted itineraries serving specific markets at spe- the Sabre® global distribution system. in greater revenue dilution and yield declines cific times. Although not yet available as a Availability — This includes each competi- in many markets. New Internet-based e-com- product, historical shopping results are tive itinerary and future departure date up to merce channels have emerged; Web fares available for research and analysis purposes. a year in advance. have proliferated, and deregulation of global Prototypes of new applications that issue Despite the complexities involved, an distribution systems in the U.S. marketplace competitive alerts to our airline partners are airline’s sales performance is directly related has led to broader adoption of “most-favored- currently being tested, and these alerts notify to its marketplace competitiveness. nation” agreements giving access to low-fare revenue management analysts of specific Today, revenue management demand content and availability. problematic markets and departure dates in forecasts are based on historical average com- The surfacing of powerful new low- which they are either under priced or over petitive schedules and fares. Previously, this fare search engines on major Internet travel priced, relative to competitors. Early results approach didn’t pose a major problem, but agencies, such as Travelocity ® and Expedia, show that these alerts are proving useful in with the emergence of restriction-free pricing has led to greater transparency of airfares for identifying previously unknown market com- during the past few years, the airline business customers and suppliers. In effect, it is easier petitive issues. has changed considerably. Assumptions of for all parties to get accurate information on Also, due to the efforts of airline, ven- stable, unchanging competitive availability are competing airfare products. In addition, the dor and academic research teams, significant unrealistic in the current environment and can recent deregulation of U.S. global distribution improvements are being made in the areas significantly reduce the value of revenue man- systems has created a business climate that of customer demand forecasting and revenue agement. However, new revenue manage- will permit improved historical data collection management optimization. One primary area ment technology, known as choice modeling, as well as new capabilities such as real-time of research is in the application of new sta- is emerging, rendering these historical average pricing and availability. tistical tools for airline demand forecasting 70 ascend mmmmmmmmmmmm company

... ‘smart’ controls for real-time availability and pricing “will become one of the most important revenue-enhancing technologies for airlines within the next decade.”

known as customer-choice models. In addition it can perform a real-time reevaluation of the availability in real time, considering current to historical booking activity, these new cus- inventory controls that were generated dur- competitive conditions. These patent-pending tomer-choice models consider demand shifts ing the most recent revenue management dynamic availability and re-pricing capabilities caused by changes to competitor prices and/or planning system optimization. The purpose of are known collectively as active inventory, and schedules. Early results show that these fac- the reevaluation is simple: to check that the they represent a major step forward in revenue tors have a significant impact on demand, predicted marketplace conditions match the management technology. Instead of relying so this new technology is being built into current ones. If competitive conditions have exclusively on planning forecasts to predict the Sabre® AirMax® Revenue Management changed significantly (either better or worse), selling conditions, active inventory uses actual Suite to help provide more accurate demand then the resulting inventory control decisions current market conditions to reduce the impact forecasts. These customer-choice models should be revised. of planning forecast errors. Also, by pushing are also being used in revenue management For example, when overnight revenue more automation and intelligence into the real- optimization; factors such as “upsell” (the management planning optimization process- time decision, it helps simplify management of likelihood that customers will pay a higher ing was performed for “Husky Airlines” flight markets and dates by revenue management fare if their first choice is unavailable) and 89, it was assumed that Husky’s prevailing analysts. Historically, major revenue manage- “recapture” (the likelihood that customers will 30 percent historical market share would con- ment advancements in the industry have been book an alternate flight on the same carrier tinue, resulting in a K-class demand forecast inventory related (virtual and continuous-nest- if their first choice is closed for sale) can be of 35 passengers remaining between now ing O&D inventory controls). These new active considered. and the time of departure. However, upon inventory capabilities will be integrated into Revenue management inventory con- checking actual low-fare search results the Inventory component during the next few trols are also growing more sophisticated. involving a specific future departure date, years. Point-of-sale and journey controls are be- our customer-choice models show that coming widespread, and increased business Husky’s primary competitor, “Snowflake Air,” Revenue Planning Engines flexibility from open-systems computing plat- is projected to win 90 percent market share Traditional revenue management forecasting forms (such as SabreSonic™ Inventory) are on that date (leaving only 10 percent share and optimization models are also undergo- being adopted. In a recent article in the Journal for Husky and all other carriers in that ing major improvements. Customer choice of Revenue and Pricing Management, Ben market). A quick check reveals that the models form the basis for future choice-based Vinod, chief innovator for the Sabre Airline schedule hasn’t changed, but Snowflake has O&D demand and cancellation forecasting, Solutions® business, and I discussed how reopened its previously closed deep discount which will forecast demand at the market “smart” controls for real-time availability and fares on two flights. Given the new market level and allocate it to scheduled itineraries pricing will become one of the most impor- conditions, the previous demand forecast of across all carriers. This technology has been tant revenue-enhancing technologies for 35 is unlikely to be realized. Husky’s demand used for years in the Sabre® AirFlite™ Planning airlines within the next decade. We are con- forecasts should be decreased, the revenue and Scheduling Suite, but no data sources ducting studies with travel agencies on the use management optimization model should be were available to calibrate demand at the of new capabilities, such as dynamic availability run again, and the resultant availability of O&D service/departure-date level. Shopping and dynamic pricing. These various real-time Husky’s deep discounts would likely make data has helped fill that gap, and use of a inventory and pricing capabilities are compo- it more market competitive. This simple common forecasting methodology will lead nents of a complete operations engine that example shows how up-to-date market to greater consistency between the AirFlite comprises the core of the new competitive competitive information can be used to and AirMax suites’ demand estimates. In revenue management process. improve an airline’s revenue management addition to forecasting, choice models will availability. make improvements in revenue management Revenue Operations Engines In our distribution channels, it will soon optimization through improved estimation of If an airline has up-to-date competitive infor- be possible to use information from low- up-sell, recapture and the effects of price mation regarding available flights and fares, fare search results to optimize prices and elasticity. mmmmmmmmmmmm ascend 71 company

User Business Processes Active Inventory Processing In the future, revenue management analysts will mainly focus on tracking market-level activity and competitive situation awareness. Rules Customer-choice models and shopping alerts Low-fare and will highlight unusual market events for analyst CPA requests review. Analysts will be able to more precisely control fare and inventory decisions through active inventory rules. This is an important Optimized fares global distribution Inventory Choices Optimize step forward because restriction-free pricing and availability system (optimum has changed revenue management analysts’ available fare response)

Sabre Active focus and business processes. Instead of the inventory previous “myopic” forecasting that considers engine only a carrier’s own historical data, competitive positioning is now the key consideration. A typical workflow for future revenue Demand-driven Optimal inventory management analysts will consist of three Competitive alerts air fares

Available re-optimizations controls and prices major steps: 1. Reviewing alerts (from operations pro- cesses), Current published fares Planning engine To Sabre AirMax 2. Performing root-cause analysis (by revenue from the Sabre AirPrice (Use offline optimization as Revenue Manager management analyst), fares management starting point and modify (Send alerts to users in 3. Taking corrective action (manually or auto- system plus historical controls based on current predefined or statistically mated). shopping data competitive conditions) unusual circumstances) Analysts will be equipped to perform root-cause analysis using shopping data results, and this capability will include “what- Historically, major revenue management advancements in the industry have been if” scenario analysis (via simulation). These ­inventory related (virtual and continuous-nesting origin-and-destination inventory controls). simulations will include a tactical capability New active inventory capabilities will be integrated into the Inventory component during to replay yesterday’s shopping and booking the next few years. transactions under different competitive sce- narios (availability and fares) and estimate the likely revenue outcome using customer-choice by 5 percent to 11 percent in markets where have a powerful effect on demand. As such, models. new airlines introduce restriction-free airfares. carriers must pay close attention to their Given the importance of these opera- If competitive pressures dictate the competitors’ availability status. An article in tions functions, the primary focus of pricing launch of restriction-free airfares, how can the April 2004 Journal of Revenue and Pricing and revenue management in the future will airlines offset these huge yield declines? Management provided an excellent discussion be to establish good decision rules and use Simulation studies by the Massachusetts of the business importance and practical usage model-based systems to automatically adapt Institute of Technology International Center of competitive availability information in reve- to specific competitive situations. Analysts will for Air Transportation showed that the nega- nue management with restriction-free pricing. review recent performances and update the tive yield impacts from dilution can be less- model-rules logic on an ongoing basis. Since ened by the use of more sophisticated O&D Low-Fare Search Shopping Data choice-model-estimated market share auto- revenue management controls. Their primary Unlike published fares, which can be obtained matically accounts for both pricing and sched- finding was that, in low-fare air environments, from sources such as ATPCO or SITA, there uling quality of service differences, analysts network revenue management is even more are no standardized industry sources of com- should find it easier to use than today’s price critical to effective control of seat inventory petitive availability information by O&D market dollar differences in spotting broad patterns of between low-fare airlines’ local markets and and departure date. Furthermore, advances competitiveness across markets and dates. connecting network traffic. in low-fare search engines and emergence Why is revenue management even of restriction-free pricing are making ongoing Revenue Management With more important in restriction-free pricing than competitive awareness for each future date Restriction-Free Pricing in traditional fare structures? In traditional fare even more difficult. The absence of restric- The catalyst for these recent technological structures, two mechanisms exist that inhibit tions means availability is the primary means advances has been the expanding use of late-booking business travelers from purchas- of fare product segmentation. In addition, new “restriction-free pricing” by carriers worldwide. ing deeply discounted airfares: powerful low-fare search engines such as Most traditional carriers dislike the notion of Fare restrictions (advance purchase those employed on Travelocity ®, Expedia and restriction-free airfares because restrictions requirements), Orbitz can now find “sum-of-locals pricing,” enable better segmentation of various cus- Fare availability (revenue management where two local fares are used instead of tomer types (early-booking leisure travelers controls). higher-priced through fares. Detecting these versus late-booking business travelers), but In the absence of fare restrictions, the non-obvious fare combinations can result in they are often forced to match low-fare airlines full burden of preventing dilution falls to the sudden, unintuitive shifts in the effective mar- in the affected markets to remain competi- revenue management availability controls. ketplace price. As such, identifying competitive tive. Fare restrictions help limit “buy down” Revenue management in restriction-free imbalances and correcting them (preferably in of higher-fare passenger types into lower-fare pricing is much more complex than in tradition- real time) is becoming more important. categories — also known as dilution. Revenue al, segmented fare environments. Competitors In an ideal world, pricing and revenue performance of incumbent carriers could drop being open or closed for sale in a given class management decision-support systems would 72 ascend mmmmmmmmmmmm company

consider competitors’ pricing and availability. Interested in Learning More? In the past, this wasn’t possible. However, we have put considerable effort into stor- Additional information about competitive revenue management ing the results of historical low-fare search can be found in several references, including: transactions for large portions of the airline marketplace. Because these historical data show which carrier performed best on low-fare “Delta’s SimpliFares: Not simple, but better” by J. Brancatelli, The Brancatelli search results, they provide better insight into File, http://joe.biztravelife.com/05/010605.htm, 2005. the underlying reasons for sudden demand shifts between different carriers in an O&D “Price Optimization and Inventory Control: The New Generation in Revenue market. Such information is critical in demand Management and Reservations” by B. Vinod (the Sabre Holdings™ business), forecasting using customer choice models. Aviation Industry Group, Competitive Airline Business Strategies: Asia & the Shopping data capture and use of customer- Middle East, 2004. choice models are providing important new emerging capabilities for future revenue man- “Airline Pricing and Revenue Management: A Future Outlook” by R. Ratliff and agement systems. B. Vinod (Sabre Holdings), Journal of Pricing and Revenue Management, Vol. 4, No. 3, 2005. Choice-Based Demand Forecasting We use statistical choice models to estimate “Availability Based Value Creation Method and System” by R. Ratliff, A. Walker, the probability of selecting specific itinerary and B. Smith and A. Brice (Sabre Holdings), United States Patent Office, http://www. fare alternatives returned from the fare search uspto.gov/, Patent Application Number 20030191725, 2003. results. Given that something is booked, these models estimate the probability of selecting “Future of Revenue Management: A View from the Inside” by D. Cary, Journal a particular option displayed in the low-fare of Pricing and Revenue Management, Vol. 3, No. 2, 2004. search results. The relative attractiveness of the various itineraries displayed is calculated “Revenue Management Performance in a Low-fare Airline Environment” by considering schedule attributes (elapsed flight P. Belobaba and T. Gorin (MIT International Center for Air Transportation), time, departure time and carrier share in the AGIFORS R&YM Study Group Meeting, 2004. originating airport) and the available price. This probability of selection among competing itin- “Revenue Management Performance under Simplified Fare Structures” by P. eraries is equivalent to estimating the market Belobaba and M. Dar (MIT International Center for Air Transportation), AGIFORS share of each option. R&YM Study Group Meeting, 2005. By considering both the probability of selection and current available fares among “Revenue Management with Restriction-free Pricing” by S. Mishra and V. ® competing alternatives, the expected revenue Viswanathan (the Sabre Airline Solutions business), AGIFORS R&YM Study of a sale for each itinerary can be computed as: Group Meeting, 2003.

Current Estimated “bmi’s Response to the Changing European Airline Marketplace” by S. Donnelly, Expected = ­available fare X share of an A. James and C. Binnion, Journal of Pricing and Revenue Management, Vol. 3, revenue of an itinerary itinerary No. 2, 2004.

This itinerary-level expected revenue “Revenue Management Under a General Discrete Choice Model of Consumer equation is very useful because it enables Behavior” by K. Talluri and G. van Ryzin, Management Science, Vol. 50, No. 1, an airline to determine the revenue impact pages 15-33, 2004. of changes in one carrier’s price considering the current available price and quality of ser- vice of competing carrier itineraries. With this ments are typical for re-priced itineraries. Such new customer-choice model technology, capability, a simple optimization model can be incremental gains are very large, and it is Providing better visibility into the sales pro- used to search for the “optimal” price amount anticipated that further improvements can be cess by using competitive alerts products (the point at which expected revenue is maxi- gained when used in conjunction with modern designed to help identify problem markets mized). Intuitively, this makes sense because origin-and-destination revenue management and dates, a carrier’s maximum revenue performance planning systems. Helping improve market-competitive posi- under competition must consider competitors’ tion and revenue using improved real-time current prices. Competitive Revenue Management response systems such as dynamic avail- Expected revenue improvements are New tools and methods that incorporate com- ability and pricing. very common. Although the additional reve- petitive positioning in the marketplace will It’s an exciting time in the industry, and nue associated with one transaction isn’t greatly extend the impact of revenue man- I hope you agree that these new tools will dramatic, the cumulative impact of many agement for airlines. New practices will help help take your marketing performance to the small, tactical improvements to displays is pricing and revenue management analysts next level. a expected to be significant. For bookings that better address important business require- involve a low-fare search (especially those ments such as: made via Web channels), recent shopping Helping them better understand customer Richard Ratliff is a senior research simulations by the research group for the preferences using shopping data, scientist for the research group at Sabre Sabre Holdings™ business show that more Helping forecast demand and cancellations Holdings. He can be contacted at than 10 percent expected revenue improve- better via improved demand forecasting using [email protected]. mmmmmmmmmmmm ascend 73 Following the Sun

By Lynne Clark | Ascend Staff The Sabre Holdings™ business offices in India enable its three businesses to connect with local customers.

hink globally, act locally. The phrase first strategy to grow globally and, at the same Web check-in solution was customized and coined in 1979 referred to the argument time, stay close to our customers.” delivered by Sabre Airline Solutions employ- T that global environmental problems can Sabre India started with only two work- ees based in Bangalore. Additional capacity at turn into action only by considering ecological, ers in March 2005 and began the New Year the Bangalore facility will accommodate 162 economic and cultural differences of local sur- with more than 50. Maniar expects to add employees and includes a world-class training roundings. at least another 70 employees by the end facility to support customers in the region. Today, the phrase describes a strategic of the year, primarily in areas of product Having the Bangalore development business priority reflective of the new eco- ­development, professional services support, office as a base of operations has permitted nomic realities of a 24-hour-a-day, seven-day- quality assurance, data analysis and operations the Sabre Holdings business to grow their a-week “follow-the-sun” marketplace where research. presence in the surrounding regions as well. successful multinational companies must live “We are on target to build a world- “Our professional services teams based in the markets they serve. class team at our Bangalore facility,” Maniar here have traveled to customer locations in Late last year, Sabre Holdings demon- said. “Bangalore has a huge pool of talent the region, such as Singapore Airlines, China strated just how well it understood the prin- consisting of both recent graduates and expe- Airlines and Air New Zealand, to manage our ciple by opening an operations base in rienced employees. Sabre India has quickly product testing and acceptance,” said Maniar. Bangalore the “Silicon Valley” of India. Sabre established itself as an ‘employer of choice.’” “This support has also been extended to our Holdings has three businesses — Sabre Recruiting from top-tier Indian universi- customers in Europe, the Middle East and Airline Solutions®, Sabre Travel Network™ ties, such as the Indian Institute of Technologies Africa, such as Lufthansa German Airlines.” and Travelocity® — that use the center for and the Indian Institute of Management, is software development, on-time customer a key strategy in developing the right mix of Beyond Bangalore service delivery and operational support in talent at Sabre India. Sabre Travel Network was the first Sabre Asia/Pacific. New staff is needed as solutions from Holdings company to set up offshore opera- “The new Bangalore office has been Sabre Holdings are further established in India tions in India. successful since opening last September, from and the surrounding regions. Customers have It opened a Mumbai office in 1994. the perspective of Sabre Holdings and our cus- embraced Sabre Holdings and welcome its Today, three employees market airline distribu- tomers,” said Shail Maniar, managing director presence in Bangalore, and being close to tion products to airlines throughout South Asia, of Sabre India. “The move is reflective of our them is paying off. For example, Jet Airways’ including India, Sri Lanka, Nepal and Bangladesh. 74 ascend mmmmmmmmmmmm Photos courtesy of Sabre India Sabre of courtesy Photos

“Our airline customers have immedi- ate access to Sabre Travel Network products and service delivery processes because of our India office,” said Emmanuel Phillips, managing director for Sabre Travel Network in India. “Our local support helps these airlines increase revenues and efficiencies.” In 2004, Travelocity moved a portion of Sabre Holdings offices in Bangalore and Mumbai, India, enable its three businesses — its contact center operations and back-office Sabre Airline Solutions, Sabre Travel Network and Travelocity — to provide local fulfillment to India when it signed a multi-year 24-hour-a-day, seven-day-a-week service to its Asia/Pacific customers. master services agreement with WNS North America, Inc. “Travelocity needed to differentiate itself Jones, senior vice president of strategic sourc- Jones said having a diverse, multinational from its online competitors, and our move to ing for Travelocity. And more often than not, team benefits all Sabre Holdings business India allowed us to offer a customer-service the challenges are basic. units. “I think having offshore operations like guarantee,” said Lesley Harris, Travelocity For example, India and the United the ones we have in India are tremendously vice president of sales and customer care. States, both former British colonies, celebrate important from our standpoint as a company “Customers can now contact us 24/7. We’re Independence Day. The national holiday in that connects people with the world’s great- able to staff more efficiently and offer more the United States is July 4. In India, it’s Aug. est travel opportunities. As we interact with proactive services. For example, if one of our 15. For planning purposes, managers with different cultures, we get an appreciation for customers has a negative experience, we can teams in India need to put both dates on the and information from potential customers. We follow up much faster, simply because we calendar. get to see what they want from their travel have a 24-hour time frame in which to work.” “We have our holidays and they have experiences, which helps us develop more theirs,” said Jones. “The point is that you customer-specific products.” a Offshore Issues need to be really familiar with the culture in Yes, trade is global, but landscape is local which you are operating. Communication is Lynne Clark can be contacted at — that’s the challenge, according to Maimie very, very key.” [email protected]. mmmmmmmmmmmm mmmmmmmmmmmm ascend 75 company

From Distribution to Merchandising With … Steve Dumaine, senior principal in airline strategy and planning for Sabre Holdings Innovative Marketing and Merchandising

Many innovative carriers in the India marketplace are looking beyond traditional ticket sales to generate additional revenue.

n a low-cost, low-price market, low-fare Similarly, SpiceJet has formed success- a partnership with Café Coffee Day, a chain carriers have adopted unique tactics to ful partnerships with key travel agencies and operated by India’s leading coffee con- attract consumers, promote their brand, branded them SpiceJet Shops. glomerate, Amalgamated Bean Coffee merchandise their product and earn ancillary “While these shops charge a small Trading Company Ltd., to be the single ven- revenue. In doing so, these carriers have service fee from customers, they gain from dor for all food and drinks. Air Deccan’s shown a remarkable ability to adapt their busi- SpiceJet’s aggressive promotions and strong passengers can use their boarding passes ness model to local conditions. brand,” said Sanjay Kumar, general manager as discount coupons at Café Coffee Day of marketing and sales for SpiceJet. retail outlets, a win-win situation for both Distribution companies. While Internet penetration is low and personal Retailing Air Deccan is also expanding its in- computers are still considered a luxury only While retailing food and beverage forms flight sales to include a variety of shopping the rich can afford, the high use of cellu- the main source of ancillary revenue for options. Recently, it signed a deal with AVA lar telephones coupled with the convenience airlines around the world, it is still in a Merchandising for India’s first in-flight shop- and low cost of SMS text messages pre- nascent stage in India. However, LCCs in ping scheme termed “Brand for Less,” where sented a unique opportunity. India-based Air India realize its potential and are rushing customers can order brand-name products Deccan and Kingfisher Airlines seized upon to capitalize on it. Air Deccan recently signed from a catalog at low prices.

this opportunity, enabling customers to pur- Prasanna/MyAviation.net Bhargav by Photo chase tickets with their cell phones through the use of SMS text messaging to transfer credit card details, passenger name records and ticket numbers. Another innovative strategy LCCs are taking advantage of entails partnering with Internet cafes and travel agencies to sell tickets. Air Deccan, for instance, has entered a relationship with Reliance Web World, India’s largest chain of Internet cafes, which now sells 8 percent of Air Deccan’s total ticket volume. “These outlets not only provide easy access to consumers for Air Deccan, they also Air Deccan has tapped into several technological advancements, giving its customers help in brand promotion as they prominently diversity in ticket purchases using several electronic methods as well as partnering display the Air Deccan banner,” said Gaurav with various vendors to boost in-flight service and offer in-flight shopping. Agarwal, marketing manager for Air Deccan. 76 ascend mmmmmmmmmmmm company

As the aviation market matures in India and competition“ among LCCs intensifies, unique customer touch points will become a major competitive advantage.”

In India, Internet access is low and computers are still perceived as a luxury, which has several of the country’s carriers focusing on alternative methods their customers can use to purchase tickets, such as SMS text messaging and Internet cafes. Photos by Dinodia Photo Library Photo Dinodia by Photos

“AVA [Merchandising] is a strategic tie- inside its aircraft while Air Deccan sells adver- up to leverage the large number of passen- tising space on aircraft interiors and exteriors gers Air Deccan carries daily on its 146 daily to brands such as Idea Cellular and Sun flights,” said Capt. G R Gopinath, the airline’s Microsystems. chief executive officer and founding managing As the aviation market matures in India director. and competition among LCCs intensifies, Air Deccan provides incentives to its unique customer touch points will become a crew by paying its flight attendants a 10 per- major competitive advantage. These carriers cent commission on all sales. In-flight retailing are likely to increase their dependence on currently accounts for 3 percent to 4 percent alternate sources of revenue to keep their of Air Deccan’s revenues, which the airline fares low as they fend off competition from hopes to raise to 10 percent within a few the new entrants. Next on the horizon, look years. for LCCs to start offering discounted hotel and package deals to their customers. a Advertising LCCs in India hope to utilize their assets, including the body of aircraft, to profit from advertising. Kingfisher Airlines announced Steve Dumaine can be contacted plans for selling ad space on the TV screen at [email protected]. mmmmmmmmmmmm ascend 77 T H E H I G H level vıew News Briefs from Around the Globe

Asia/Pacific seamless and hassle-free air travel experience.” ously to Sabre Airline Solutions products in After successfully launching online seven different areas: passenger manage- Dragonair has increased customer sat- bookings in which passengers can book, ment, revenue management, fares manage- isfaction levels during check-in through the pay and print their e-tickets on the Web, Jet ment, planning and scheduling, movement implementation of the Sabre® Qik® Developer Airways, with the help of this new technology control, dispatch management, and market Tool at the Pudong Airport in Shanghai, China. from Sabre Airline Solutions goes a step fur- data and analysis. The data communication The Hong Kong-based carrier, which ther to provide maximum convenience and savings stem from reduced transactions as a serves 31 passenger destinations across comfort to its customers. result of greater systems integration. The use Asia with one of the youngest and most of intuitive graphical user interfaces eliminates advanced aircraft fleets in the region, selected Travelocity™ has chosen India for ex- error messages, but most savings come from the Developer Tool as a ready-made airport pansion of its operations in the Asia/Pacific seamless integration of the reservations and application that supports multiple languages region. The company feels the global trend to departure control systems, eliminating the to greatly enhance customer experiences at book travel online has begun to “find its feet” need to exchange data. check-in by increasing staff productivity and in India. Air One is using SabreSonic™ Passenger performance. The business’ Asia/Pacific company, Solutions for its reservations, ticketing, depar- “The check-in application from the Sabre Zuji, will establish a specialist online travel ture control and booking Web site. Its suc- Airline Solutions® business has enabled us to team in India, targeting a “Travelocity India” cessful migration involved three call centers, rapidly improve staff productivity by eliminat- site later this year. The new site will be built systems in 23 airports and cities, and the con- ing the need for check-in agents to enter cum- on the existing technology foundations of cur- version of 153,000 passenger name records. bersome and repetitious commands,” said rent Zuji online travel sites operating across The process was accomplished in just 18 Ronnie Choi, director of customer services the Asia/Pacific region, including Zuji sites in minutes. for Dragonair. “The check-in interface provides Singapore, Australia and Hong Kong. “Our growth goals are aggressive, and us with easy access to all necessary infor- “The future of travel bookings in India we now have a suitably aggressive technology mation so we are able to deliver more ac- is online,” said Singapore-based Zuji Chief partner,” said Lino Bergonzi, general manager curate and faster responses to customer Executive Officer Scott Blume. “Just as we of Air One. “We are one of the few European requests. The implementation at Pudong have seen the trend towards online travel carriers now operating on a real, new-gen- Airport has successfully improved our check- bookings grow rapidly in the United States and eration open-systems platform, and we can in processing, hence we plan to roll this tech- now in parts of Asia, we absolutely believe immediately start taking advantage of cus- nology out to Hong Kong and other cities in that the global trend to book travel online has tomer-focused technology while at the same Asia/Pacific.” begun to ‘find its feet’ in India. time lowering our operating costs. “We believe our decision to create “One of the reasons we chose Sabre Jet Airways, India’s leading airline, a substantial, international online business [Airline Solutions] is because it provides one- will be the first domestic airline in India to in India will be a catalyst for change to the stop shopping for airlines,” he continued. “Its offer a distinctive online Web check-in facil- online travel business scene here. It’s a deci- consulting services, combined with technology ity to its customers. Developed by Sabre sion we’ve made after much research, but that spans our operations, is important to help- Airline Solutions, the specialized Web tools ultimately because of our confidence in the ing us achieve our current and future objectives.” enable passengers holding a confirmed and Indian economy and the foundation of a robust valid electronic ticket to check in for any of domestic travel market, the rapid growth of Ethiopian Airlines signed a con- the airline’s 29 destinations throughout India the outbound and inbound sectors, the grow- tract worth more than US$10.5 million (£5.8 anytime from 48 hours up to 60 minutes prior ing trend towards e-purchasing in general, and million) with Sabre Airline Solutions for several to departure. E-tickets can be issued through the pool of talented people here. Travelocity products in its portfolio. Under the agreement, travel agents, Jet Airways’ portal, and Jet India’s launch later this year will literally con- Ethiopian Airlines will migrate from a SITA sys- Airways airport and city offices. Through the nect Indian travelers to the world and a world tem to the SabreSonic™ Passenger Solutions new technology, Jet Airways has introduced of travelers to India.” by the end of the year. yet another pioneering initiative that enables The airline will utilize several compo- customers to not only select their preferred Europe/Middle East/ nents within the SabreSonic solutions that pro- seat but also print their boarding passes for vide reservations, online booking, e-ticketing, their same-day return flight on the carrier’s Africa codesharing and departure control. It will also Web site. use the Sabre® Traveler Loyalty System to help “Jet Airways further strengthens its com- Air One, Italy’s leading privately owned maximize its frequent flyer program and the mitment for the growth of the Indian aviation airline, has slashed its data communications Sabre® AirPrice™ fares management system. industry through a new emerging technology,” costs by 40 percent following its successful “The key phrase behind our new rela- said Peter Luethi, chief operating officer for Jet conversion to a number of operational and tionship with Sabre Airline Solutions is ‘sys- Airways. “This newly launched Web check- decision-support products from Sabre Airline tems integration,’” said Girma Wake, Ethiopian in facility provides yet another step toward a Solutions. The carrier converted simultane- Airlines’ chief executive officer. “Sabre Airline mmmmmmmmmmmmmm Solutions has a large portfolio of proven “The idea is to offer business travelers ticketing in the Middle East. The airline has software and decision-support tools that will an uninterrupted, efficient, safe and quick introduced e-ticketing capabilities success- help us master the current and future growth point-to-point transport service between cit- fully in its reservations offices in Muscat and of our airline. As the information technology ies where direct air connection is congested, Salalah, Oman; Dubai, United Arab Emirates; needs of Ethiopian grow and evolve, we irregular or simply does not exist at all,” said Cairo, Egypt; Mumbai and Chennai, India; believe Sabre Airline Solutions will be able to Evgeny Andrachnikov, chairman of the board and Kuwait. It uses SabreSonic™ Passenger accommodate us, both with its products and of AMG. “We are also selling on the concept Solutions for its reservations and check-in through its renowned consulting business. of flexibility, so our operational and decision- operations at these airports, so acceptance We see this new cooperation as a partnership support technology needed to be able to help of e-ticketing was possible without additional that will allow both our companies to expand us with this.” third-party ground handling functionality. their presence in Africa and beyond.” Dexter uses the Sabre® Rocade® Airline Oman Air will extend e-ticketing capa- Operations Suite to manage its growing fleet bility to its offices in Beirut, Lebanon, and Gulf Air and TAP Portugal, of 250 aircraft that make more than 1,500 Delhi, India, before the end of the year. to achieve savings in their on-board service departures a day in and around Russia. The The carrier will then expand its e-ticketing costs, have selected the Sabre® AirServ ® In- Rocade suite provides a complete solution for capability to airports that require third-party flight Solutions, enabling them to integrate efficient and flexible fleet and crew planning ground handling functionality, such as Bahrain. their entire range of catering and cabin ser- as well as operations control. The solutions “The consultative element to Sabre vices and drive savings of up to 15 percent are scalable and can be used by small start- Airline Solutions business is a real differentia- from their total catering budgets. up airlines as well as medium-size businesses tor from other suppliers, adding value and eas- The solutions enable electronic-busi- with up to 150 aircraft. ing the implementation process,” said Edward ness collaboration between the airlines’ “As airports become increasingly Grauvogl, Oman Air’s planning divisional man- caterers, suppliers and warehouse operations congested and scheduled business routes ager and acting commercial divisional man- across the globe. They streamline the entire grow more crowded, there’s a definite niche ager. “We were surprised by how easily e-tick- range of in-flight operations across each opening up,” Andrachnikov said. “Sabre eting was accepted by the local market, given carrier’s network of business partners, trans- [Airline Solutions] is perfectly placed to our initial wariness about the introduction of ferring real-time information to caterers help. The scale and breadth of our opera- this technology in a paper-driven society.” and vendors. tional and decision-support products mean “The AirServ solutions give us the I can be talking to British Airways in the Aeroflot Russian Airlines ability to automate all our catering and cabin morning and AMG in the afternoon.” launched a pilot version of its new online book- services from menu planning and scheduling, ing service, reported its plans to introduce beverage services and duty free to entertain- AirTran Airways signed a new electronic paperless ticketing, confirmed it is ment, reading materials and cleaning ser- five-year agreement with the Sabre Travel on schedule with the technical requirements vices,” said Tariq Sultan, vice president for Network™ business to make all its fares and needed for its planned entry into the SkyTeam Gulf Air. “The software will deliver an imme- inventory available through the Sabre® global alliance and reported the success of the travel diate increase in operational efficiency and a distribution system and Travelocity. agency technology switch in Russia. The airline significant return on investment.” In addition, Travelocity Partner also revealed plans for the launch of self-ser- Users of the AirServ solutions have real- Network, the private-label booking business vice airport express check-in kiosks as well as ized particularly significant savings through for Travelocity, will become the sole sup- touch-screen self-booking units travelers can automation of invoice auditing, resulting in plier of hotel, cruise and AirTran Vacations use to plan flights and make their own bookings. reduced missed payments. Inventory costs packaging content for the carrier’s Web site. The technology upgrade involved the are cut through better order visibility, fore- “This new long-term agreement is sig- successful switch from outdated technology casting and control, while meal spoilage is nificant to AirTran Airways in the sense that, systems to cutting-edge reservations, opera- reduced through accurate, automated passen- as our airline evolves, the channels of distri- tional and decision-support products provided ger forecasting. The solutions also help the bution must also evolve,” said Kevin Healy, by Sabre Airline Solutions. The information carriers reduce distribution costs, decrease vice president of planning for AirTran Airways. technology overhaul, combined with the air- catering spend, and increase multiple provi- “Distributing through multiple Sabre Travel line’s recent product upgrade and re-branding sioned or back-catered flights. Network channels lets us conveniently serve exercise, enables it to compete successfully on our customers, both business and leisure flyers, international routes and paves the way for it to Air Management Group con- and maintain our low-cost structure. AirTran enter the SkyTeam alliance. Sergey Kiryushin, tracted with Sabre Airline Solutions to help Airways and Sabre Travel Network are commit- Aeroflot’s chief information officer, said the operate its new Moscow, Russia-based air ted to creating distribution efficiencies through scale of the project was vast and one of the taxi services under the Dexter brand, which both current and emerging technologies.” biggest travel IT projects attempted in Russia. operates light aircraft configured with four or “To change our entire technology plat- six seats specially designed for frequent busi- Oman Air became the first Sabre Airline form while running a growing and successful ness travelers. Solutions customer to implement electronic business has been a major challenge,” he said. mmmmmmmmmmmmmm T H E H I G H level vıew News Briefs from Around the Globe

“The fact that we have gone as far as we have, operations so it can accurately plan loads for Eos Airlines’ flight schedules and while simultaneously servicing growing cus- maximum revenue. fares are now available for access and tomer inquiries and maintaining service levels, “Cargo is an increasingly important ele- sale to more than 50,000 subscribers who has been an outstanding achievement by the ment of Gulf Air’s business, and Revenue use the Sabre® global distribution sys- Aeroflot and Sabre Airline Solutions teams.” Manager will further enable us to maximize tem. Eos Airlines offers a single premium- Evgueni Bachurin, Aeroflot’s commercial this important revenue flow,” said Ali Murtada, class service on its daily flights between director, said, “Everything we are announcing vice president of business units for Gulf Air. New York’s John F. Kennedy International today is about customer convenience, staffing “Revenue Manager fits perfectly with the Airport and London’s Stansted Airport. and cost efficiencies, bringing the airline up rest of our Sabre Airline Solutions portfolio. “The fact that Sabre [Travel Network] to date with best practices in the competitive We continue to look to our technology partner can provide us with outstanding access to world of the international aviation industry. to provide technologies and tools that deliver the high-yield corporate traveler was of great We’re rapidly turning Aeroflot into an airline results, from increased revenues to improved interest to Eos,” said Christopher Frawley, vice that embraces the best available technology efficiency and productivity in our operations.” president of distribution at Eos. “This is a ter- and efficiencies, resulting in better service Revenue Manager can also manage rific match for our corporate-focused product.” for customers and a more streamlined, cost- booked cargo that does not arrive at its effective airline for the country. It’s one of the planned destination as well as control and Northwest Airlines signed a advantages of having chosen to go with Sabre track bookings from a revenue perspective. five-year, full content agreement with Sabre Airline Solutions in the first place … it offers The system enables product offerings and Travel Network, enabling all Northwest better technology and better support for these pricing decisions to be made with the most published fares and inventory, includ- innovations than the previous incumbent or accurate information and data, adding to ing Web fares, to be available through any of its competitors.” the ability to maximize revenue. In addition, the Sabre® global distribution system. Revenue Manager helps find the proper bal- “We are pleased to enter into an Turkish Airlines signed a multi-year ance between long- and short-haul traffic. agreement with Sabre [Travel Network] that contract worth more than US$1 million with achieves Northwest’s electronic distribution Sabre Airline Solutions for decision-support The Americas objectives,” said Al Lenza, vice president of technology from the Sabre® AirMax® Revenue distribution and e-commerce at Northwest. Management Suite and expects to boost total US Airways, the nation’s largest full- revenues by five percent as a result. service, low-cost airline, has signed a new Sabre Airline Solutions has The newest version of Sabre® AirMax® five-year, full content agreement with Sabre successfully implemented technology from Revenue Manager will reduce Turkish Airline’s Travel Network. Through the agreement, all Microsoft to accelerate development and exposure to no-shows and duplicate bookings. US Airways published fares and inventory deployment for the next generation of the The system will help the carrier make the most — including Web fares — whether flown Sabre® Streamline™ Resource Management of high-value demand close to departure, while under the America West or US Airways brand Suite. Through in-depth architect design simultaneously limiting the number of empty are guaranteed to be available for all users review sessions at the Microsoft Technology seats on departing aircraft. Revenue Manager of the Sabre® global distribution system, Center in Austin, Texas, Sabre Airline Solutions will also give the airline a range of decision-sup- including online and offline travel agencies. and Microsoft were able to prototype a new port tools including data collection, forecasting This includes published fares that the airline smart-client application. The prototype com- and performance measurement, enabling it to sells through any third-party Web site and bines the best of Microsoft’s newest technol- improve the way it manages seat availability. through its own Web site and reservations ogy and design approaches using Visual Studio “We expect big improvements in offices. 2005 and the 2.0 .Net Framework with the demand forecasts,” said Sami Alan, Turkish “Signing this agreement with Sabre Streamline suite’s industry-leading resource Airline’s senior vice president of revenue man- [Travel Network] not only provides attrac- management solution, which is utilized by agement. “Revenue Manager, coupled with the tive economics to US Airways, but it also more than 40 airlines, ground handling agents, Sabre® AirMax® Group Manager, will provide ensures our most loyal customers will have airports and government agencies worldwide. substantial marginal revenue contribution over easy access to our low fares through the “By working together, Sabre Airline our existing revenue management software. distribution channel most convenient for Solutions and Microsoft have enabled imme- “The Sabre Airline Solutions team was them,” said Scott Kirby, US Airways execu- diate results, and we look forward to a con- able to demonstrate the flexibility of the sys- tive vice president of sales and marketing. tinued relationship in executing the long-term tem to match our processes and needs, which “Many of our top business customers regard vision of the Streamline suite,” said Pradeep was a refreshing change from the approach of Sabre [Travel Network] as the most convenient Rathinam, Microsoft’s general manager of other suppliers out there,” he said. and comprehensive way to book their travel. independent software vendors in the United We’re extremely pleased with the agreement States. “Sabre Airline Solutions has capitalized Gulf Air selected Sabre® CargoMax as it allows these customers to continue on the opportunity to gain early insight into the Revenue Manager to help take much of the booking on US Airways through its existing development and delivery of solutions utilizing guesswork out of managing complex cargo systems.” Visual Studio 2005 and the .Net Framework. mmmmmmmmmmmmmm We are very excited about the Sabre Airline 350 million passenger boardings, successfully the need for carriers to build costly systems Solutions newly announced commitment as serving more than 40,000 passengers per for electronic ticket distribution and data- its work is representative of the tremen- hour. SabreSonic™ Inventory enabled carriers base maintenance. The e-ticketing hub sig- dous momentum in the ISV community with to manage more than 100 million inventory nificantly simplifies the process for enabling the release of these new technologies.” availability requests and book US$4 billion in interline electronic ticketing between two tickets last year. In addition, hosted airlines carriers. This capability comes at a time when Sabre Airline Solutions, the used the system to complete more than there is a growing interest in e-ticketing, industry leader in innovative technology that 275 million check-ins, increasing passengers- especially for itineraries that include travel on helps airlines better market and sell prod- boarded counts by more than 100 percent different carriers. ucts, serve customers and operate efficiently, year over year. “It is important for us to maintain the level reported sales through SabreSonic™ Web During 2005, Sabre Airline Solutions of service our customers expect while keeping last year, totaling more than US$4.1 billion. completed 353 customer activations of costs low,” said Karen Broghammer, manager This represents a 27 percent year-over-year SabreSonic solutions. The number of airlines CRC and technology development for Alaska increase in sales of the powerful airline benefiting from the unmatched flexibility, Airlines. “The Sabre Airline Solutions new- Internet booking engine, an indication of the speed, performance and cost savings deliv- generation technology and ease of implemen- flight industry’s growing demand for passen- ered by the solutions exceeds 100 carriers tation enables us to do just that with electronic ger self-service capabilities. worldwide. ticketing and positions us for future growth.” The Web component also delivered a “The breadth of the offering from In addition to the rapid delivery and re- dramatic increase in the number of carriers Sabre Airline Solutions provides an integrated duced costs for interline electronic connec- adopting the solution in 2005 as well as the solution across all of our operations,” said tions, Sabre Airline Solutions provides unique number of passenger bookings. Eleven new Sergey Kiryushin, chief information officer for processing tools. The diagnostic tools, includ- customers selected the component during Aeroflot Russian Airlines. “In fact, we believe ing e-mail alert functionality and access to indi- the past year, bringing to 38 the total num- the technology solution it has packaged for vidual ticketing messages, provides airline ber of carriers utilizing the solution in North Aeroflot offers benefits that are unmatched employees with the resources to quickly diag- America, Asia/Pacific, Europe and the Middle in the industry. This smart technology means nose and solve message errors. Availa- East. These carriers booked approximately 1 improvements to our operations and that bility of such enhancements comes as a bene- million passengers a month through the Web means better results to our bottom line and fit of the product’s development in an open- component — a yearly total of 13.4 million improved service to our customers.” system environment. passengers, which represents an increase in Lina Bergonzi, chief executive officer for passenger bookings of 33 percent over 2004. Italy-based Air One, said, “Our growth goals Sabre Airline Solutions, the Total activity through the component are aggressive, and we need an aggressive industry leader in airline operations tech- last year averaged more than US$330 million technology partner. Our business strategy is nology, achieved preferred partner status in per month, and more than 11 million tickets based on offering convenient and efficient the International Air Transport Association’s were booked through the Web component service, and the agreement with Sabre Airline Simplifying the Business initiative. Sabre during the same period, representing a 24 Solutions is a key element of our strategy. Airline Solutions has supported this initiative percent year-over-year increase. SabreSonic solutions have the technology we since its announcement in 2004, introduc- “The Web component’s booking num- need now and provide the flexibility we need ing industry-first new-generation solutions bers and revenues increased significantly in to quickly adapt to growth and new business that include both standalone and integrated 2005, indicating the growing demand for pas- models in the future. This technology inte- options for electronic ticketing and other key senger self-service capabilities and the growth grates with [the Sabre Airline Solutions] deci- elements of the IATA program. of the online space,” said Gianni Marostica, sion-support software to keep a keen focus “As an industry, we have challenged president of Airline Passenger Solutions for on operational excellence while driving out ourselves to find cost-reduction possibilities Sabre Airline Solutions. “Since its launch in costs and improving our revenues, all in a rapid in our complex processes,” said Bryan Wilson, January 2004, the customer-centric shopping growth environment. During the course of our project director electronic ticketing for IATA. and booking method has proved its value to evaluation, there was no other company that “To make the most effective use of tech- carriers and their customers alike by offering could provide the power of this combination.” nology and simplify the business of travel, the best options for booking, check-in and IATA is working with top-level technology exchanges for today’s travelers.” Around the World providers like Sabre [Airline Solutions] to move the industry forward. Sabre [Airline Sabre Airline Solutions Alaska Airlines and Korean Solutions] has demonstrated great initiative reached significant milestones last year on Air successfully implemented interline elec- in making this change happen with innova- the second anniversary of the launch of its tronic ticketing, provided by the Sabre Airline tive solutions like its e-ticketing hub. We next-generation SabreSonic™ Passenger Solutions Interline Electronic Ticketing Hub, consider it an important partner in accomplish- Solutions. Its hosted carriers employed the a feature of SabreSonic™ Ticket. The state- ing the goals set forth in our Simplifying SabreSonic solutions to handle more than of-the-art e-ticketing component eliminates the Business initiative.” a mmmmmmmmmmmmmm

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Photo by Ben Goode/Shutterstock Photo by Ben Goode/Shutterstock — Enables pro

Request

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ment costs, and expected profit for each itinerary, destination itineraries, ture of demand, feature determines the optimal split the of group request that results mum revenue. in maxi Determining break-even fare or displace Processes one-way, round-trip and multi- Offers negotiation capabilities for recap Splits itineraries if required. The auto-split

Series uator helps prioritize to and the competing requests allocate based on seats overall their revenue contribution and minimum acceptable fare. This module can also help ­analyze corporate contracts ­allocation. for discount cessing of seasonal group requests tour operators from or consolidators for cific a departure date spe- range. The series eval

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Ad Productivity enue management and/or reservations staff to evaluate ad hoc group requests in terms of revenue contribution and possible reve- nue displacement. The itinerary provides evaluator a recommendation to reject accept or the request demand based on as forecasted Capabilities well of the Ad as Hoc Group Request module include: current bookings. improving loyalty of various group types and sustained market share. mated request results in processing better reduced resource turnaround time utilization of interfaces group and request processing.

an array including: of features and functionality, Group Manager Features

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Higher Optimal Eliminate Increased low-demand flights and off-peak periods, managed to ensure that group turndowns are minimized by directing group traffic to accepted by means of critical evaluation of group requests by travel agents operators during a season. and tour traffic. only the best commercial arrangements are protecting availability for later higher-value booking of passengers,­eliminates revenue dilution caused by group the system ing revenue and market share network. across the The system manages risks group by bookings accepting and/or redirecting to groups low-demand flights, thereby increas

­modeling techniques to effectively manage ing group traffic. Designed for flexibility modularity, and the ­benefits: system offers numerous Group Manager and control the risks associated with accept- ment within three months. Benefits and tracks the performancetracksthe and individual of group requests. increase revenues up to 2 percent, with some invest carrierson returnreceivingpercent 100 management of group requests. The system evaluates group traffic based on historical and current traffic data, forecasts booking activity, Sabre enabled solution that agement helps and reservations revenue agents man revenue maximize and profitability through proactive Description Sabre AirMax Group Manager Product hig mmmmmmmmmmmmmm New and Improved Products and Services from Sabre Airline Solutions Photo by Robert Kohlhuber/Shutterstock Robert by Photo Beier/Shutterstock Ralf by Photo Damkier/Shutterstock Mikael by Photo Product Sabre Corporate Loyalty System

Description

The Corporate Loyalty system helps airlines develop their corporate and travel agency loyalty customer base. The system enables companies to begin receiving rewards as soon Photo by Chris Harvey/Shutterstock Chris by Photo Sunimation/Shutterstock by Photo Photo by Mikael Damkier/Shutterstock Mikael by Photo as they enroll. With this program, airlines reward companies with credits, offered as points or currency, and the company redeems them for flights, special promotional discounts, free upgrades or whatever the airline makes available.

The company can use the rewards as employee incentives or even to reduce its corporate travel costs. These benefits make it easy for corporations to encourage their employees to fly a specific airline. The corporate solution offers multiple ways to manage corporate rela- tionships in addition to the market-specific loy- alty incentives. These options include prepaid Group Tracking — Tracks the group Generation of ad hoc performance mea- travel, rebates, and trade and barter. With the request performance from its creation surement reports at various levels of travel agency option, airlines can offer incen- through departure. Reporting on historical detail for analysis. tives to travel agencies to encourage book- group performance provides an airline’s ings on their airline. Similar to the individual sales division an additional tool to gauge Queue Processing — Enables real-time traveler program offered by the Sabre Airline the effectiveness of particular groups. review and confirmation of group requests Solutions® business, the Corporate Loyalty This information can be used for future by providing an automated interface to a system provides extensive marketing and ­negotiations with the group organizers or in carrier’s reservations system. Revenue program management capabilities, including the planning of special group promotions. management and/or reservations staff can e-mail campaigns to develop corporate and The Group Tracking module can also be retrieve requests directly from the queues, travel agency relationships and segment-tar- used to manage group bookings on future evaluate, confirm and re-queue the PNR in get marketing programs, contract manage- departures. It enables airlines to specify the carrier’s reservations system. Without ment tools, a multi-language corporate and criteria by which particular groups can manual intervention, the auto-pilot feature travel agency Web site that enables company be flagged as requiring special attention can confirm or waitlist the group request enrollment and activity viewing, administrative before there is a significant revenue impact. based on a hierarchical set of user-defined reporting, and account management. Benefits of the Group Tracking module rules, improving productivity. include: Allotment Planning — Accurately esti- Benefits Automated alerts for deposit, names and mates block space allocations including ticketing time limits, inventory and price for basic and peak sea- The Corporate Loyalty system offers signifi- sons well in advance of the selling season. cant benefits to airlines, including: Group utilization profiles based on request With this data, carriers can maximize expect- attributes, such as market origin and des- ed revenues for the planning period by using Delivering an effective, Web-enabled, multi- tination, agency, group type, point-of-sale, the system recommendation as leverage language corporate loyalty management and season, during negotiations. solution, mmmmmmmmmmmmmm mmmmmmmmmmmmmm hightech

Providing one-to-one marketing opportunities Product Benefits so airlines can target individual corpora- tions, SabreSonic Shop The Shop component enables airlines to pres- ent itinerary options that balance their custom- ers’ needs for low-fare options, resulting in Helping airlines generate high-yield business several key benefits: travel revenue by rewarding corporations Description with redeemable credits based on employee SabreSonic™ Shop, a component of the Strengthened customer confidence — travel, SabreSonic™ Passenger Solutions, enables Shoppers can create itineraries that exactly airlines to present fares that best match match their needs based on a variety of Boosting revenue by increasing corporate their customers’ diverse needs for low- parameters. traffic. fare options. By introducing advanced shopping features such as alternate date Increased control — Airlines have greater searching, alternate city shopping, flex- control over fare search space and can ible date searching and merchandising, the define merchandising rules to return only Features Shop component further helps airlines the flight options they want their customers present the perfect fare to their custo- to purchase. The Corporate Loyalty system includes several mers, using fewer transactions, enhanc- features, such as: ing customer satisfaction and driving Reduced costs — The component returns a channel shift. wide breadth of options for a single request, A user-friendly interface for easy, quick navigation;

Secure account access; W RLD WIDE/AIR Strategic marketing message capability via HOME MY PROFILE SPECIALS CUSTOMER SERVICE ABOUT US e-mail or Web site; User ID Your Request: PIN Ability to target specific corporations; Las Vegas, NV (LAS) to Hong Kong (HKG) Departing Wed, Mar 8 START IN Returning Thu, Mar 16 Promotions based on class, cabin, city pairs 1 Adult or dates;

Remember my Select Travel Dates: FF Number Return Date Multiple awards options for greater flexibility and customer satisfaction; 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar 16-Mar 5-Mar $1344 $1414 $1325 $1455 $1325 $1414 $1308

Several redemption paths (call center, 6-Mar $1455 $1308 $1325 $1344 $1344 $1308 $1414 FLIGHT INFO e-mail, booking engine); 7-Mar $1308 $1325 $1276 $1344 $1276 $1455 $1455 Flight Number 8-Mar $1455 $1414 $1325 $1325 $1344 $1414 $1414 Survey functionality and results for or 9-Mar $1344 $1325 $1308 $1414 $1414 $1276 $1308

promotional and marketing needs; Departure Date 10-Mar $1414 $1308 $1455 $1344 $1325 $1455 Account and market statistics; 11-Mar $1325 $1414 $1455 $1308 $1325

Remote access based on a structured monthly fee, minimizing initial investment, providing access functionality quicker, reduc- The Flexible Date Matrix displays the lowest price for up to 49 outbound and inbound ing information technology and database date combinations in a single display, enabling customers to quickly and easily find an resources, and lowering maintenance and attractive fare. support costs. mmmmmmmmmmmmmm New and Improved Products and Services from Sabre Airline Solutions

helping reduce the number of shopping trans- Product sentatives can easily and confidently identify actions needed to find the right fare. The potential areas of increased revenue as well response can then be filtered to ensure the Version 2006 as track the effects of sales or promotions desired option is presented to the customer. on a specific segment of the market. Using Sabre WiseVision the analyzer, sales representatives can effi- Maximized profitability — Airlines can Sales Analyzer ciently schedule and manage their time preference the shopping display to show by focusing on target markets and accounts options that support their profitability for the best sales results. This Web-enabled ­objectives. Description solution provides timely, global access to market information data tapes information Features Version 2006 of Sabre® WiseVision™ Sales for sales representatives and headquarters- Analyzer helps airlines’ sales and marketing based analysts. The data becomes available The Shop component offers flexible configura- departments drive market share and revenue to all users at the same time with a single tion through key modules to meet an airline’s growth by providing visibility and analytical data load. specific needs: capability into the booking activity of agency Low-fare searching — The Low-Fare channels. The analyzer provides comprehen- Benefits Searching module delivers a variety of sive reporting, graphing and analysis capabil- ­available and applicable low-fare options ity to enable headquarters and regional sales Sales Analyzer benefits airlines by focusing on for customers who already know when directors to set targets and monitor booking sales force productivity that: and where they want to travel. Using this activity by agency, conglomerate or geograph- module, an airline can expand the depth and ical point of sale. Identifies an airline’s market position, its breadth of low-fare options presented on its market share on specific routes and its Web site, increasing customer confidence Sales Analyzer helps decrease the time market compliance with passenger travel and driving gains in online traffic. By limiting needed to analyze and interpret large quanti- behavior, including the ability to focus by the response to only those fares that meet ties of market data. Analysts and sales repre- sales area or region, specified travel criteria, the module also enables an airline to present options that its customers are more likely to purchase, increasing its Web site’s “look-to-book” ratio.

Merchandising — The Merchandising module helps an airline control the shopping experience of its Web-based sales channels through a user-friendly graphical user inter- face. By customizing the shopping output, an airline can create rules that optimize the shopping display, promoting flights that sup- port its profitability objectives. Additionally, an airline can create rules that override customer input on such items as passenger types, preferred departure time, alternate cities and the number of options returned to provide higher-quality responses. The mod- ule also provides increased pricing flexibility by enabling airlines to create and apply rules based on variables such as departure city, arrival city and travel dates.

Flexible shopping — The component pro- vides several tools that enable customers who may not know when or where they want to travel to quickly find attractive fares on an airline’s Web site. mmmmmmmmmmmmmm hightech

Product Sabre GS Fusion Ground Support Suite Description

The Sabre Airline Solutions® business and GSE Technical Services, Inc. jointly present the Sabre® GS Fusion™ Ground Support Suite — a suite of GSE fleet planning, maintenance scheduling and real-time tracking applications that can make a difference in the financial success of transportation businesses such as airlines, airports, ground handlers and equip- ment leasing companies. Designed by indus- try specialists and developed by technical experts, the GS Fusion suite’s planning tool and equipment management and tracking sys- tems effectively address the full spectrum any company’s ground support equipment needs.

This solution provides a comprehensive planning of GSE, equipment utilization, real-time track- ing and maintenance scheduling. By access- ing real-time data, planners need not guess if Provides data mining for interactive and Expanded group management capabilities enough equipment is available for any job, on focused drill-down analysis, such as the ability to create e-mail, city, any day. The suite provides seamless commu- airport, city market and airport market nication and collaboration between operational Assists management with structuring groups, demands and maintenance needs, enabling a marketing incentives to capture targeted more accurate and smoother day of operations. market share, Enhanced report and template capabilities, such as: Benefits Facilitates communication between sales personnel and agencies, Ability to automatically execute pre-for- Businesses utilizing the GS Fusion suite matted reports in the form of templates have realized substantial benefits, including: Enables trend analysis based on historic after each monthly data load and e-mail information, the reports, A wide range of what-if scenario planning, including alternate flight schedules Ability to execute trend and time-series and changes in equipment, Provides the ability to analyze and evalu- reports, ate advance bookings and proactively shift Optimized equipment utilization, decreasing market share, Enhanced user management capa- costs and improving productivity up to 25 bilities, percent, Unifies marketing and sales efforts Ability to incorporate additional data by identifying airline markets with expansion Operational cost savings between 30 percent and codesharing possibilities. sources such as host bookings data and host revenue data, and 40 percent,

Ability to e-mail and share reports directly Increased manpower and equipment efficien- Features from the application, cies of 10 percent to 15 percent,

Version 2006 of Sales Analyzer offers a variety Expansion of quality of service index data Reduced maintenance costs of 15 percent of new features, including: into all reports. to 25 percent, mmmmmmmmmmmmmm New and Improved Products and Services from Sabre Airline Solutions

Reduced ramp and apron damages and give credibility to an evaluation leading to bars and mouse-driven commands facili- insurance deductibles by 30 percent, new ground equipment purchases when tate actions. necessary. Increased equipment availability by 25 Inventory analysis — The suite can use percent. Maintenance planning — Providing an data from a variety of sources to compare easy-to-use graphical user interface, the current GSE inventory for an airport against Features suite’s planning feature gives maintenance projected requirements. This feature is more personnel full control to plan inventory in accurately enabled due to the real-time GPS Systems within the GS Fusion suite offer a advance. Equipment data, maintenance tracking data feed of equipment inventory. range of features, including: profiles, warranties, scheduled inspections, specific maintenance requirements, spare Operational reports — The solution offers Generating GSE requirements — Planning parts inventory, job orders and maintenance printed charts showing equipment require- analysts can automatically generate GSE intervals by time period or engine hours can ments, equipment inventory, summary requirements for different combinations of be entered in advance. information and details for a selected flight ground and passenger handling services. schedule. It also lets analysts print equip- Schedule and volume data view — With ment parameters that were used to gener- Schedule management and comparison the help of a schedule and volume chart ate actual requirements. — Flight schedules, which can be entered utility, planners can view data in tabular for an entire season, are stored in a master format and adjust all details regarding Access control and authorizations — The database. Analysts can enter an effective the seasonal flight schedule, as well as suite helps improve health and safety stan- date range for each flight, extract weekly planned passenger, baggage and cargo load dards and provide visibility of equipment schedules for any seven-day period and set information. usage while preventing unauthorized use. GSE assignments for the weekly schedules. Flight schedule builder — The suite sup- Equipment utilization and optimization Optimized GSE assignments — ports multiple formats including the SSIM — Can be analyzed using real-time data to Analysts can choose the aircraft, GSE, format for importing flight schedule informa- measure actual usage against plan for more day and order to optimize assignments. tion. A flight schedule can be quickly created efficient operational streamlining. The optimizer can also globally assign or changed by using the spreadsheet-style all GSE for seven days, simultaneously. functionality and the rapid-entry template Operational costs — Can be reduced by to react to the dynamic environment at the increased awareness of fleet operations What-if analysis capabilities — By redefin- airport location. in the field because of online monitoring ing process parameters, the suite provides of damages, operator behavior, equipment valuable what-if capabilities. After generat- Configurable user interface — The sys- idling and ETAs for assignments. ing requirements, analysts can view results tems deliver a powerful, full-color, graphical, and analyze effects on GSE resources and user-configurable interface that is easy to Fleet management reports — The suite service-level agreements that can evolve comprehend. It incorporates the use of pull- produces utilization statistics, damage occur- from a change in the flight schedule, aircraft down menus and split-screen capabilities rences, driver habits, position on demand types, equipment usage rules or perfor- to quickly display information needed to requests, geo fence alerts, access control mance standards. These multiple scenarios make decisions. Quick key strokes, tool statistics equipment usage and location. a Photo by Dragan Trifunovic/Dreamstime.com Dragan by Photo Skopin/Dreamstime.com Jeffrey by Photo Kench/Dreamstime.com Jason by Photo Toh/Dreamstime.com Guan Kheng by Photo

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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]. Taking your airline to new heights For more information about products 2006 Issue No. 1 and services featured in this issue of Ascend, please visit our Web site Editors in Chief at www.sabreairlinesolutions.com Stephani Hawkins B. Scott Hunt or contact one of the following 3150 Sabre Drive Sabre Airline Solutions regional Southlake, Texas 76092 ­representatives: www.sabreairlinesolutions.com 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.

Art Direction/Design Asia/Pacific Shari Manning Andrew Powell Vice President Contributing Designers Yvette Hunt, Michelle Kennedy, Level No. 05-05 Danielle McLelland, Tim St. Clair Technopark Block 750E Chai Chee Road Contributors Singapore 469005 Shaquiq Ahmed, Kathy Benson, Jack Burkholder, Vinay Dube, Glen Harvell, Phone: +65 9127 6927 Roland Hollis, Carla Jensen, Tracey Lewry, E-mail: [email protected] Craig Lindsey, Marcela Lizárraga, George Lynch, Deborah Magee, Sandra Meekins, Europe, Middle East and Africa Gary Millward, Mona Naguib, Soona Murray Smyth Oh, Nancy Ornelas, Wally Phillips, Jody Vice President Pickering, Jenny Rizzolo, Santosh Sah, Somerville House Melvin Tan. 50A Bath Road Publisher Hounslow, Middlesex George Lynch TW3 3EE, United Kingdom Phone: +44 208 814 4540 Awards E-mail: [email protected] 2006 International Association of Business Latin America Communicators Gold Quill. Marcela Lizárraga 2005 International Association of Business Communicators Bronze Quill, Silver Quill Vice President and Gold Quill. 3150 Sabre Drive Southlake, Texas 76092 2004 International Association of Business United States Communicators Bronze Quill and Silver Quill. Phone: +1 682 605 5333 E-mail: [email protected] 2004 and 2005 Awards for Publication Excellence. North America Reader Inquiries Kristen Fritschel If you have questions about this Vice President publication or suggested topics for 3150 Sabre Drive future articles, please send an e-mail to [email protected]. Southlake, Texas 76092 Phone: +1 682 605 5335 Address Corrections E-mail: [email protected] Please send address corrections via e-mail to [email protected]. Sabre Airline Solutions, the Sabre Airline Solutions logo and products noted in italics in this publication are trademarks and/or service marks of an affiliate of Sabre Holdings Corp. All other trademarks, service marks and trade names are the property of their respective owners. ©2006 Sabre Inc. All rights reserved. Printed in the USA. smart. proven. bankable. 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.