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Geoff Dixon, CEO, Qantas Airways A MAGAZINE FOR AIRLINE EXECUTIVES 2004 Issue No. 2 T aking your airline to new heights AN ALLIED FRONT A conversation with … Geoff Dixon, CEO, Qantas Airways INSIDE Air France and KLM form 4 Europe’s Largest Airline 18 The Evolution of Alliances A Conversation with oneworld, SkyTeam 26 and Star Alliance proven Taking your airline to new heights 2004 Issue No. 2 leadership. Editors in Chief an affiliate of Sabre Holdings Corporation. ©2004 Sabre Inc. All rights reserved. Stephani Hawkins B. Scott Hunt 3150 Sabre Drive Southlake, Texas 76092 Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and/or service marks of www.sabreairlinesolutions.com Designer James Frisbie Contributors Venkat Anganagari, Randal Beasley, Hans Belle, Nejib Ben-Khedher, Kathy Benson, Jack Burkholder, Cameron Curtis, Sally deFina, Karen Dielman, James Filsinger, Brenda Gale, Greg Gilchrist, Gretchen Greene, Jim Haley, Glen Harvell, Kathryn Hayden, Vicki Hummel, Carla Jensen, Craig Lindsey, Patrice Lipson, George Lynch, Michael McCurdy, Matt McLellan, Mona Naguib, Nancy Ornelas, Jenny Rizzolo, Dave Roberts, Sanjay Sathe, Shari Stiborek, Renzo Vaccari, Elayne Vick. Awards It’s time for all-out innovation. And it’s time for proven leadership. Mission-criti- 2004 International Association of cal areas require time-tested solutions. Longer than any other company, we’ve Business Communicators Bronze Quill and Silver Quill. pushed technology forward to deliver vital systems airlines need to stay ahead, 2004 Awards for Publication Excellence. to make the impossible practical. Reader Inquiries If you have questions about this Working closely with carriers, we’ve developed a portfolio of flexible, integrated publication or suggested topics for future articles, please send an e-mail solutions that can optimize operations of all airlines — any size, any business to [email protected]. model, anywhere in the world. Address Corrections Please send address corrections via Learn how together we can put proven leadership to work for you. Call us at 682 e-mail to [email protected]. 605 1000. Or visit www.sabreairlinesolutions.com. 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. ©2004 Sabre Inc. All rights smart. proven. bankable. reserved. Printed in the USA. contents 4 58 62 y ofile oducts egional pr r industr pr company The French– Spanning The Russian Maintaining A Turn for Britain’s Best Aligning 4 26 48 54 58 62 66 Dutch Connection the Globe Steps the Lead the Better Kept Secret? the Alliance By combining, Air France and A discussion with oneworld, Aeroflot Russian Airlines Sabre Airline Solutions and Mxi Despite several industry Eastern Airways, because of its Jointly implementing new practices KLM have created Europe’s first SkyTeam and Star Alliance leverages technology to adapt Technologies partner to provide an barriers, Air Jamaica has passion for customer excellence in untapped operational areas airline group and has become the reveals the significant impact to its dramatically changed industry leading, integrated mainte- discovered ways to reduce and “putting the passenger first” can bring dramatic benefits to world’s largest airline. global alliances have had on the home country. nance and engineering solution. costs and improve its financial mindset, continues to expand its members of global alliances. airline industry and the benefits and on-time performance. loyal passenger following. they bring to their member Good Share and Riding Uniform 51 56 71 9 carriers. Neighbors CodeShare Alike Out of the RAIL Service 60 ® ™ Africa To ensure their most valued Two regional airline associations, The Sabre AirFlite Planning and Migrating from a wide area network An Allied AACO and AFRAA, employ Scheduling Suite enables codeshar- EgyptAir has developed an to the redundant array of Internet passengers receive the highest 36 levels of customer service, Front economies of scale to help ing airlines to optimally manage extensive turnaround strategy links could reduce an airline's net- alliance members need integrated Qantas Airways CEO Geoff member airlines minimize costs complex schedule distribution to leverage its natural strengths work costs by 40 percent to 50 processes and procedures. Dixon discusses the effect and gain incremental revenue. processes. and minimize its weaknesses. percent while preserving reliability. alliances have had and will Linking continue having on his airline 13 Latin America and the industry as a whole. Latin American alliances, while The Next similar to those in Europe and 40 with Tom Klein Group President, Sabre Airline Solutions/Sabre Travel Network North America, take different IATA? perspective approaches to adjust to the local Ten carriers formed the environment. European Low Fares Airline ince it’s an election As you stroll through Lufthansa’s corporate campus in Frankfurt, And finally, while I am a customer of many of your airlines, I live Association to ensure govern- year here in the Germany, there’s no mistake that the airline is committed to in Dallas, Texas, which means that many of my trips start with The Evolution ment and industry policy 18 United States, there’s the Star Alliance and its members. Waving in the wind on poles oneworld. As I have traveled around the globe to visit with you, of Alliances makers understand the a lot of focus on the along the boulevard are flags representing the alliance members. I have experienced marked improvements in service across the From codeshare agreements importance of the low-cost S candidates’ voting records. The While Lufthansa is as fierce a competitor and brand builder alliance, resulting from a better understanding of alliance bene- to global alliances, partnerships carrier model. political spin is in full force, with as any, it is clear that it is willing to share the spotlight with fits by airline personnel, better access to customer advantages between airlines continue to each candidate declaring his its important strategic alliance partners. I have yet to hear a and more consistent treatment from trip to trip. I have experi- progress, helping to transform Declaring record is being misrepresented speech or major interview with Chief Executive Officer Wolfgang enced it with all the alliances, but most frequently with oneworld. 42 the airline industry. Independence? so he doesn’t come out on the Mayrhuber or his alliance-zealot predecessor, Juergen Weber, There’s no question that global airline alliances are continuing to wrong side of a popular point that hasn’t made reference to the importance of the Star Alliance The breakup of United build critical mass and are poised to take on new levels of coop- of view. So, in the spirit of the to Lufthansa and its customers. The airline has clearly taken a Airlines and its former regional eration and execute on the mission of providing more customer Carrying truth, I will lay out my “voting leadership role, and it has been consistent. 23 feeder carrier may have laid benefits. The approaches vary, but the consistent view is that the the Freight record” on alliances. the foundation for a changing If you visit the Web sites of SkyTeam members, you will see the alliance is one prong of each member carrier’s “re-invention plan” Following the direction of the relationship between majors I didn’t think global airline alliances would ever work. I thought the SkyTeam logo prominently featured next to the airline name at and that the financial salvation of the industry may lie, in part, on industry's leading passenger air- and regionals. hunger to expand organically or acquire other airlines was too the top of the home page of most member carriers. SkyTeam the success of these unique global collaborations of competitors. lines, many cargo operators seek great, and that governments and regulators would make it impossi- members have chosen to give their alliance prominent billing. So, while regulators around the globe have acted as inconsis- to form strategic partnerships. ble to have any real success. I believed that the cultural divides And, speaking of SkyTeam, the recent AirFrance-KLM merger tently as I expected they would (although I think they would spin could not be bridged, and that U.S. megas, in particular, would reminds me of when John Adams, the second president of the it to say they enabled the success), the sheer will of the airline have a difficult time adjusting to any form of alliance “governance United States, was responsible for diplomatic relationships with industry and the leadership of a few great CEOs have rendered 42 model,” which is counter to the business techniques developed Holland and France during the 1700s. Adams worked tirelessly my previous view of alliances flat-out wrong. I feel better having during the post-deregulation years of bloody competitive battles to understand and overcome the unique views and cultures of come clean with you, and I will ask my publisher to provide me where major airlines took on each other and the world in head- these two great countries and allies. Well, Air France CEO Jean- with an Ascend article in an upcoming issue where my current to-head competition. Cyril Spinetta and KLM CEO Leo van Wijk are undaunted by view is correct! Now, I know that at least some of you held or still hold to this their respective company’s cultural differences. They simply view. I, however, have altered my opinion based on the hundreds believe the upside is too large as they come together to form of examples of alliances that are progressing successfully. So let the world’s largest passenger airline. As a result, SkyTeam, me share a few of the more whimsical observations that have often mentioned as “the other alliance,” can now stake a legiti- helped change my way of thinking.
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