Geoff Dixon, CEO, Qantas Airways

Home , Flight attendant, SkyTeam, Skytrax

A MAGAZINE FOR AIRLINE EXECUTIVES 2004 Issue No. 2

T a k i n g y o u r a i r l i n e t o n e w h e i g h t s

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

INSID E

Air France and KLM form 4 Europe’s Largest Airline

18 The Evolution of Alliances

A Conversation with oneworld, SkyTeam 26 and Star Alliance

world

one

Photo courtesy of Photo courtesy Photos courtesy of Star Alliance Spanning the Globe he past decade has seen the rise of the major international airline alliances — T Star Alliance, oneworld and SkyTeam. From the start, alliances have offered their members key benefits, such as the ability to offer customers access to more

destinations around the world and the ability to redeem frequent flyer miles on a

number of carriers.

Certainly, the alliances have already had a significant impact on the industry and will

likely continue to do so in the future. Ascend magazine asked representatives of the

three main alliances to answer a few questions about the affect they’ve had, and the

changes they will continue to make.

Photos courtesy of SkyTeam

ascend 27 industry

world

one

Photo courtesy of Photos courtesy of Star Alliance Spanning the Globe he past decade has seen the rise of the major international airline alliances — T Star Alliance, oneworld and SkyTeam. From the start, alliances have offered their members key benefits, such as the ability to offer customers access to more

destinations around the world and the ability to redeem frequent flyer miles on a

number of carriers.

Certainly, the alliances have already had a significant impact on the industry and will

likely continue to do so in the future. Ascend magazine asked representatives of the

three main alliances to answer a few questions about the affect they’ve had, and the

changes they will continue to make.

Photos courtesy of SkyTeam

ascend 27 industry industry

Question: What are the advantages of as in raising revenues, and we know there is Overall, Star Alliance views technology as key Star Alliance: Membership in an

being a member of your alliance? world more work we can be doing in this arena. to putting customers more in control of their alliance is an important strategy for traditional

Star Alliance: On the customer side, one Star Alliance: Emerging technologies travel experience and airlines more in control carriers; indeed it is a key element in their tran- member airlines can significantly enhance continue to play an important role. of their passenger boarding costs. sition to new, more profitable business mod- their product offering by providing access to For example, together with three of our Additionally, Star Alliance is looking at els from both a revenue and cost-saving per- an unsurpassed global network of over 14,000 member carriers, we are working on a com- other initiatives to reduce costs for the mem- spective. daily flights to 755 destinations in 132 coun- mon IT platform project that will revolutionize ber carriers, including managing the purchase SkyTeam: Airline alliances are key to pro- tries, better flight connections, alliance-wide Photos courtesy of the industry by replacing current systems with of commodity items. viding customers with the most travel options. frequent flyer benefits, lounge access and pri- one technology platform based on industry- Q: Is membership in an alliance key to sur- For a traditional hub-and-spoke airline to best ority baggage. leading products and state-of-the-art technolo- vival for the existing traditional carriers? serve its customers, global alliances open the For the member airlines, the improved gy for passenger services systems. The initia- oneworld: Carriers — and not just legacy world for travelers and allow them to offer offering brings more passengers and gener- tive will have the flexibility to admit other carriers — are certainly recognizing the bene- more destinations and greater frequencies. ates more revenue. members of the Star Alliance network at a fits that come from being a member of an Q: How does your alliance differ from the Additionally, Star Alliance has initiated a later date. Driving the effort is the desire to alliance. other two? variety of projects — in areas such as fleet improve customer service, significantly lower Today, 19 of the world’s 20 biggest air- SkyTeam: SkyTeam is the youngest of coordination, the joint purchasing of media distribution costs and dramatically increase lines are already part of one of the big three the global airline alliances, having formed in advertising, third-party services and fuel as the speed of delivering new products to market. groupings or talking about joining. Smaller air- 2000, but has the most momentum. This fall, well as the collocation and consolidation of We’re also developing Star Alliance self- lines, too, have seen what a global alliance can we added three new carriers — Continental facilities at airports across the network — that service check-in units and will be launching do for them. Airlines, KLM Royal Dutch Airlines and reduce costs for member carriers. We have true multilateral interline electronic ticketing — But, of course, becoming a member of an Northwest Airlines — resulting in a new nine- also generated savings as the result of infor- a product that features common and shared alliance cannot in itself be the key to survival. member alliance. mation technology sourcing via alliance-wide business processes and messaging verses a It can certainly help, but airlines must also ensure In addition, we differentiate ourselves frame agreements for high-cost IT spend myriad of bilateral solutions — in 2004. their own houses are in order if they are to prosper. from other airline alliances with our emphasis items such as wide area network services and technology platforms. oneworld: oneworld provides our members with benefits and value that no airline can provide or achieve on its own or working bilat- Possessing more international The 15 members of the Star Alliance, erally with other carriers. presence than any other global which was formed in 1997, provide This flows from the opportunity to alliance, oneworld serves a total access to 772 airports in 133 countries increase and protect revenues through the of 135 territories, offering its as well as 575 lounges around the world. additional services and products oneworld travelers a 575-destination network enables them to offer — a wider route net- with access to nearly 400 airport work, and more opportunities for frequent lounges worldwide. Photos courtesy of Star Alliance flyer program members to earn and redeem rewards, use lounges and enjoy priority service in more parts of the world, etc. It also comes from fare products and sales offerings that no single airline can offer on its own. Added to that are the substantial oppor- products and services. SkyTeam will provide oneworld: Global alliances were created tunities we have provided our partners to customers with the benefits and advantages originally as marketing and sales tools for air- reduce their costs. they want. lines to help partners increase and protect Members of oneworld have generated Q: You’ve already achieved many benefits their revenues by providing additional services additional value totaling many billions of U.S. from partnering, such as expanding the and products to their customers. dollars under the alliance’s umbrella. reach of member airlines and sharing fre- The potential of alliances to help reduce With margins in this industry so tight, quent flyer programs. What untapped ben- costs only came to the forefront during the that’s more than a welcome contribution. efits can be gained as your alliance contin- market softening ahead of 9/11. Since then, SkyTeam: SkyTeam is designed for the ues to evolve? there has been as much of a focus, or even passenger from the ground up, with an SkyTeam: We are developing a strategic more, on how airlines can improve their effi- excellent core network and the best growth plan that includes many areas of cost syner- ciency by working together. potential of any alliance. Membership in gies, including co-locations at ticket offices We’ve made some impressive strides in SkyTeam will present an airline with signifi- and within airports and joint purchasing of air- this direction, saving hundreds of millions of cant opportunities, including an enhanced craft components and fuel. SkyTeam has ten- U.S. dollars through joint purchasing of items position in response to competitive challenges dered 40 joint fuel purchases during the last ranging from fuel and aircraft spare parts to within its region of the world and develop- three years. towels and plastic glasses and by cooperating ment of global cargo service. In order to sat- We are looking at joint aircraft purchases in many other areas. isfy the needs of today’s traveler, airlines as part of our long-term fleet strategy and We feel there is as much scope to con- must continue to extend and diversify their developing strategic specifications. tribute on the cost-savings side of the equation

28 ascend ascend 29 industry industry

Question: What are the advantages of as in raising revenues, and we know there is Overall, Star Alliance views technology as key Star Alliance: Membership in an

being a member of your alliance? world more work we can be doing in this arena. to putting customers more in control of their alliance is an important strategy for traditional

Star Alliance: On the customer side, one Star Alliance: Emerging technologies travel experience and airlines more in control carriers; indeed it is a key element in their tran- member airlines can significantly enhance continue to play an important role. of their passenger boarding costs. sition to new, more profitable business mod- their product offering by providing access to For example, together with three of our Additionally, Star Alliance is looking at els from both a revenue and cost-saving per- an unsurpassed global network of over 14,000 member carriers, we are working on a com- other initiatives to reduce costs for the mem- spective. daily flights to 755 destinations in 132 coun- mon IT platform project that will revolutionize ber carriers, including managing the purchase SkyTeam: Airline alliances are key to pro- tries, better flight connections, alliance-wide of courtesy Photos the industry by replacing current systems with of commodity items. viding customers with the most travel options. frequent flyer benefits, lounge access and pri- one technology platform based on industry- Q: Is membership in an alliance key to sur- For a traditional hub-and-spoke airline to best ority baggage. leading products and state-of-the-art technolo- vival for the existing traditional carriers? serve its customers, global alliances open the For the member airlines, the improved gy for passenger services systems. The initia- oneworld: Carriers — and not just legacy world for travelers and allow them to offer offering brings more passengers and gener- tive will have the flexibility to admit other carriers — are certainly recognizing the bene- more destinations and greater frequencies. ates more revenue. members of the Star Alliance network at a fits that come from being a member of an Q: How does your alliance differ from the Additionally, Star Alliance has initiated a later date. Driving the effort is the desire to alliance. other two? variety of projects — in areas such as fleet improve customer service, significantly lower Today, 19 of the world’s 20 biggest air- SkyTeam: SkyTeam is the youngest of coordination, the joint purchasing of media distribution costs and dramatically increase lines are already part of one of the big three the global airline alliances, having formed in advertising, third-party services and fuel as the speed of delivering new products to market. groupings or talking about joining. Smaller air- 2000, but has the most momentum. This fall, well as the collocation and consolidation of We’re also developing Star Alliance self- lines, too, have seen what a global alliance can we added three new carriers — Continental facilities at airports across the network — that service check-in units and will be launching do for them. Airlines, KLM Royal Dutch Airlines and reduce costs for member carriers. We have true multilateral interline electronic ticketing — But, of course, becoming a member of an Northwest Airlines — resulting in a new nine- also generated savings as the result of infor- a product that features common and shared alliance cannot in itself be the key to survival. member alliance. mation technology sourcing via alliance-wide business processes and messaging verses a It can certainly help, but airlines must also ensure In addition, we differentiate ourselves frame agreements for high-cost IT spend myriad of bilateral solutions — in 2004. their own houses are in order if they are to prosper. from other airline alliances with our emphasis items such as wide area network services and technology platforms. oneworld: oneworld provides our members with benefits and value that no airline can provide or achieve on its own or working bilat- Possessing more international The 15 members of the Star Alliance, erally with other carriers. presence than any other global which was formed in 1997, provide This flows from the opportunity to alliance, oneworld serves a total access to 772 airports in 133 countries increase and protect revenues through the of 135 territories, offering its as well as 575 lounges around the world. additional services and products oneworld travelers a 575-destination network enables them to offer — a wider route net- with access to nearly 400 airport work, and more opportunities for frequent lounges worldwide. Photos courtesy of Star Alliance flyer program members to earn and redeem rewards, use lounges and enjoy priority service in more parts of the world, etc. It also comes from fare products and sales offerings that no single airline can offer on its own. Added to that are the substantial oppor- products and services. SkyTeam will provide oneworld: Global alliances were created tunities we have provided our partners to customers with the benefits and advantages originally as marketing and sales tools for air- reduce their costs. they want. lines to help partners increase and protect Members of oneworld have generated Q: You’ve already achieved many benefits their revenues by providing additional services additional value totaling many billions of U.S. from partnering, such as expanding the and products to their customers. dollars under the alliance’s umbrella. reach of member airlines and sharing fre- The potential of alliances to help reduce With margins in this industry so tight, quent flyer programs. What untapped ben- costs only came to the forefront during the that’s more than a welcome contribution. efits can be gained as your alliance contin- market softening ahead of 9/11. Since then, SkyTeam: SkyTeam is designed for the ues to evolve? there has been as much of a focus, or even passenger from the ground up, with an SkyTeam: We are developing a strategic more, on how airlines can improve their effi- excellent core network and the best growth plan that includes many areas of cost syner- ciency by working together. potential of any alliance. Membership in gies, including co-locations at ticket offices We’ve made some impressive strides in SkyTeam will present an airline with signifi- and within airports and joint purchasing of air- this direction, saving hundreds of millions of cant opportunities, including an enhanced craft components and fuel. SkyTeam has ten- U.S. dollars through joint purchasing of items position in response to competitive challenges dered 40 joint fuel purchases during the last ranging from fuel and aircraft spare parts to within its region of the world and develop- three years. towels and plastic glasses and by cooperating ment of global cargo service. In order to sat- We are looking at joint aircraft purchases in many other areas. isfy the needs of today’s traveler, airlines as part of our long-term fleet strategy and We feel there is as much scope to con- must continue to extend and diversify their developing strategic specifications. tribute on the cost-savings side of the equation

28 ascend ascend 29 industry industry

on passenger services and benefits. SkyTeam Q: As airlines continue to automate, what is the first alliance built around customer plans do you have for increased future inte- needs. SkyTeam has the best hubs in key mar- With the entrance of newcomers The “Star Alliance Visit Japan Campaign,” gration of IT systems among your member kets where 80 percent of the world’s traffic Continental Airlines, Northwest launched earlier this year, has helped airlines? flies: Atlanta, No. 1 in the world; Paris-Charles Airlines and KLM, the SkyTeam boost travel to Japan by about 30 percent Star Alliance: The common IT platform, de Gaulle, No. 1 in Europe; Incheon, the only alliance serves 341 million passengers year over year. as was mentioned before, will be a breakthrough Asian hub with room to grow; Mexico City, No. a year to 658 global destinations in this area, and each carrier will have the option

Photos courtesy of SkyTeam

1 in Latin America; and more importantly, cus- in more than 130 countries and Photo courtesy of Star Alliance Star member All Nippon Airways earlier of participating in the future. Additionally, we tomers are able to earn and redeem frequent provides access to almost 400 this year received its first Boeing 777-300ER, will continue to develop and leverage StarNet flyer miles on any SkyTeam operated flight. lounges worldwide. the first ANA aircraft to have mobile Internet to deliver new products and services to the Star Alliance: Overall, the Star and e-mail service. customers and our member airlines. Alliance network features more flights, to oneworld: While using a single platform more destinations, more often. We have also can deliver advantage by making it simpler to led the way in developing products that ease develop common business processes, where travel for international passengers. All of this appropriate, and a consistent approach to led to Star Alliance being voted the best airline systems. This is a mandatory requirement of single check in, meaning passengers receive delivering the customer proposition at the alliance in 2003 by customers, in a SkyTrax poll membership as it to enables carriers deliver boarding passes and baggage transfers for same time facilitating quicker and less costly of more than 30,000 frequent flyers, as well as the oneworld customer proposition. multi-leg international itineraries at the start functional changes, the cost of moving plat- by influential publications Business Traveler Consistent delivery of customer service of their trips. forms, in terms of business change apart from magazine (United States) and Business (customer recognition, seamless journey and Star Alliance: From the outset, it was anything else, is very significant and not Traveller magazine (United Kingdom). transfers, global support, more opportunities clear to Star Alliance that developing count- undertaken lightly. Over time, we anticipate Being founded more than seven years for frequent flyer program members to earn less bilateral connections among the mem- more convergence to take place as opportuni- ago, Star Alliance has accumulated a wealth of and redeem miles, etc.) is seen as an impor- ber carriers’ varying IT systems would not be ties present themselves. experience, which has transformed it into a tant oneworld differentiator. an efficient solution. Instead, we opted to SkyTeam: Right now, SkyTeam is more mature and effective organization. In An example of how well our systems seamlessly integrate business functionalities focused on ensuring that passengers of our fact, a dedicated project and brand manage- connect is that oneworld will be the first of without conducting system integration. For three newest member airlines, Continental, ment organization has been installed in the global alliances to offer interline e-ticket- this, Star Alliance developed StarNet, a mid- KLM and Northwest, receive all of our 10 cus- Frankfurt, Germany, to coordinate and support ing between all partners, on track for com- dleware platform and network infrastructure tomer benefits. As part of the new member member carriers in the development and deliv- pletion by the end of this year, far ahead of that connects key member carrier systems. integration process, all carriers are investigat- ery of new products, services and a host of our competitors. StarNet, in addition to providing the basics ing ways to collaborate further. For example, cost-saving initiatives. SkyTeam: Currently, our IT systems such as through check in across the alliance, SkyTeam intends to start interline electronic oneworld: It starts with the quality of our are integrated to allow our passengers to enables Star Alliance to provide flight infor- ticketing next year to customers traveling via members. We believe we have the highest accrue frequent flyer miles on every mation on any member carrier’s flight at any member airline. quality carriers in each region on board — in SkyTeam coded flight and redeem mileage check in, and it also allows customers to Q: How has your alliance transformed since terms of their customer service and overall The oneworld alliance itself was named journeys across our alliance network for awards on any SkyTeam operated flight. book award travel on any member carrier it began? soundness. the World’s Leading Airline Alliance in the smoother still. In addition, our systems are enabled for a with one phone call. SkyTeam: Since SkyTeam’s launch four How can we justify that bold claim? It is most recent World Travel Awards, which We are also different in our overall a fact that oneworld was the only alliance describes itself as the travel industry’s No. 1 membership philosophy. We are not just par- whose members collectively reported profits awards scheme, based on votes cast by ticularly choosey about who we invite to join, for 2003. 80,000 travel agency professionals from more but we are also determined to keep the num- THE HIGH LEVEL Our partners also regularly win more than 200 countries. bers of our partners to a manageable number awards than their counterparts in the other The oneworld alliance offers a wider of high-quality carriers who can work well News Briefs from Around the Globe two groupings combined. For example, range of alliance fares than all the competition together. vıew oneworld members accounted for four of the combined, earning hundreds of millions of This all results in financial contributions six 2004 Airline Strategy Awards presented in U.S. dollars a year for our partners. to our members that, we believe, stand any Who flight operations. The suite will challenge of regular fogs in Delhi, July by leading industry magazine Airline We are committed to customer service comparisons with our competitors. Jet Airways enable theairline to drive improve- India, every year for two months; Business. The top prize, for executive leader- leadership and innovation. We are on track to Q: How extensively are the IT systems of ments in on-time performance, hence, it is imperative that we have ship, has remained since its inception in 2002 be the first alliance with interline e-ticketing your member airlines integrated? What in the hands of oneworld partners. Our eight among all member airlines by the end of 2004, oneworld: Five oneworld carriers (British maintenance and disruption costs. the best tools available to manage carriers took five top places in the 2004 OAG providing greater convenience to our cus- Airways, Qantas, Iberia, LAN and Finnair) are In a move to modernize its operational our flight operations. To meet Airline of the Year Awards. tomers and saving scores of millions for our converging around a single passenger service systems, the airline selected the Why our growing needs — and also for These and the other awards oneworld member airlines. system while American Airlines is hosted on ® ™ carriers have won are a reflection of the excel- A number of the benefits that we’ve another and Cathay Pacific and Aer Lingus Sabre AirOps Suite, which is “There is no doubt flight operations is international routes — we realized we lent customer service and value they offer — had in place since the launch of our alliance maintain their own in-house PSS systems. designed to monitor daily flight mission critical,” said Peter Luethi, required a robust, integrated solution from the flat beds most of them provide in more than five years ago have only recently Comprehensive links have been developed movements and assist operations chief operating officer for Jet Airways. that is proven in the marketplace, their long-haul premium cabins to the attrac- been offered by our competitors. between these platforms and among the carri- tive fares they market. We are now looking further ahead ers’ in-house revenue accounting, frequent flyer controllers in making informed “It is a particularly pertinent issue for and the AirOps suite met all our They also work well together as an alliance. at how we can work together to make program management and business intelligence decisions regarding all aspects of Jet Airways as we face the unique criteria.” a

30 ascend industry industry

Photos courtesy of SkyTeam courtesy Photos

1 in Latin America; and more importantly, cus- in more than 130 countries and of Star Alliance courtesy Photo Star member All Nippon Airways earlier of participating in the future. Additionally, we tomers are able to earn and redeem frequent provides access to almost 400 this year received its first Boeing 777-300ER, will continue to develop and leverage StarNet flyer miles on any SkyTeam operated flight. lounges worldwide. the first ANA aircraft to have mobile Internet to deliver new products and services to the Star Alliance: Overall, the Star and e-mail service. customers and our member airlines. Alliance network features more flights, to oneworld: While using a single platform more destinations, more often. We have also can deliver advantage by making it simpler to led the way in developing products that ease develop common business processes, where travel for international passengers. All of this appropriate, and a consistent approach to led to Star Alliance being voted the best airline systems. This is a mandatory requirement of single check in, meaning passengers receive delivering the customer proposition at the alliance in 2003 by customers, in a SkyTrax poll membership as it to enables carriers deliver boarding passes and baggage transfers for same time facilitating quicker and less costly of more than 30,000 frequent flyers, as well as the oneworld customer proposition. multi-leg international itineraries at the start functional changes, the cost of moving plat- by influential publications Business Traveler Consistent delivery of customer service of their trips. forms, in terms of business change apart from magazine (United States) and Business (customer recognition, seamless journey and Star Alliance: From the outset, it was anything else, is very significant and not Traveller magazine (United Kingdom). transfers, global support, more opportunities clear to Star Alliance that developing count- undertaken lightly. Over time, we anticipate Being founded more than seven years for frequent flyer program members to earn less bilateral connections among the mem- more convergence to take place as opportuni- ago, Star Alliance has accumulated a wealth of and redeem miles, etc.) is seen as an impor- ber carriers’ varying IT systems would not be ties present themselves. experience, which has transformed it into a tant oneworld differentiator. an efficient solution. Instead, we opted to SkyTeam: Right now, SkyTeam is more mature and effective organization. In An example of how well our systems seamlessly integrate business functionalities focused on ensuring that passengers of our fact, a dedicated project and brand manage- connect is that oneworld will be the first of without conducting system integration. For three newest member airlines, Continental, ment organization has been installed in the global alliances to offer interline e-ticket- this, Star Alliance developed StarNet, a mid- KLM and Northwest, receive all of our 10 cus- Frankfurt, Germany, to coordinate and support ing between all partners, on track for com- dleware platform and network infrastructure tomer benefits. As part of the new member member carriers in the development and deliv- pletion by the end of this year, far ahead of that connects key member carrier systems. integration process, all carriers are investigat- ery of new products, services and a host of our competitors. StarNet, in addition to providing the basics ing ways to collaborate further. For example, cost-saving initiatives. SkyTeam: Currently, our IT systems such as through check in across the alliance, SkyTeam intends to start interline electronic oneworld: It starts with the quality of our are integrated to allow our passengers to enables Star Alliance to provide flight infor- ticketing next year to customers traveling via members. We believe we have the highest accrue frequent flyer miles on every mation on any member carrier’s flight at any member airline. quality carriers in each region on board — in SkyTeam coded flight and redeem mileage check in, and it also allows customers to Q: How has your alliance transformed since terms of their customer service and overall The oneworld alliance itself was named journeys across our alliance network for awards on any SkyTeam operated flight. book award travel on any member carrier it began? soundness. the World’s Leading Airline Alliance in the smoother still. In addition, our systems are enabled for a with one phone call. SkyTeam: Since SkyTeam’s launch four How can we justify that bold claim? It is most recent World Travel Awards, which We are also different in our overall a fact that oneworld was the only alliance describes itself as the travel industry’s No. 1 membership philosophy. We are not just par- whose members collectively reported profits awards scheme, based on votes cast by ticularly choosey about who we invite to join, for 2003. 80,000 travel agency professionals from more but we are also determined to keep the num- THE HIGH LEVEL Our partners also regularly win more than 200 countries. bers of our partners to a manageable number awards than their counterparts in the other The oneworld alliance offers a wider of high-quality carriers who can work well News Briefs from Around the Globe two groupings combined. For example, range of alliance fares than all the competition together. vıew oneworld members accounted for four of the combined, earning hundreds of millions of This all results in financial contributions six 2004 Airline Strategy Awards presented in U.S. dollars a year for our partners. to our members that, we believe, stand any Who flight operations. The suite will challenge of regular fogs in Delhi, July by leading industry magazine Airline We are committed to customer service comparisons with our competitors. Jet Airways enable theairline to drive improve- India, every year for two months; Business. The top prize, for executive leader- leadership and innovation. We are on track to Q: How extensively are the IT systems of ments in on-time performance, hence, it is imperative that we have ship, has remained since its inception in 2002 be the first alliance with interline e-ticketing your member airlines integrated? What in the hands of oneworld partners. Our eight among all member airlines by the end of 2004, oneworld: Five oneworld carriers (British maintenance and disruption costs. the best tools available to manage carriers took five top places in the 2004 OAG providing greater convenience to our cus- Airways, Qantas, Iberia, LAN and Finnair) are In a move to modernize its operational our flight operations. To meet Airline of the Year Awards. tomers and saving scores of millions for our converging around a single passenger service systems, the airline selected the Why our growing needs — and also for These and the other awards oneworld member airlines. system while American Airlines is hosted on ® ™ carriers have won are a reflection of the excel- A number of the benefits that we’ve another and Cathay Pacific and Aer Lingus Sabre AirOps Suite, which is “There is no doubt flight operations is international routes — we realized we lent customer service and value they offer — had in place since the launch of our alliance maintain their own in-house PSS systems. designed to monitor daily flight mission critical,” said Peter Luethi, required a robust, integrated solution from the flat beds most of them provide in more than five years ago have only recently Comprehensive links have been developed movements and assist operations chief operating officer for Jet Airways. that is proven in the marketplace, their long-haul premium cabins to the attrac- been offered by our competitors. between these platforms and among the carri- tive fares they market. We are now looking further ahead ers’ in-house revenue accounting, frequent flyer controllers in making informed “It is a particularly pertinent issue for and the AirOps suite met all our They also work well together as an alliance. at how we can work together to make program management and business intelligence decisions regarding all aspects of Jet Airways as we face the unique criteria.” a

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years ago, the alliance has shown significant SkyTeam: SkyTeam members have a certainly invite airlines to join us. Our member- growth. During this growth period, we have commonly held position about the necessity to ship door is very definitely not closed. maintained our customer focus by expanding have a unique set of rules pertaining to open SkyTeam: Because SkyTeam’s mission flight options through our strong network skies. How the rules are applied is key. As an is driven by customer needs, we continue to of airport hubs, providing exclusive services alliance, we need to maintain the current open consider a select number of airlines that will The three main global airline alliances, together, comprise more than to recognize frequent business travelers skies agreements. expand the reach and benefits for our cus- 35,000 daily departures — oneworld with 7,526, SkyTeam with 14,320 and make them feel special, and enhancing Star Alliance: The Star Alliance net- tomers around the globe. and Star alliance with more than 14,000. the quality of service across all its member work has always operated successfully within As mentioned above, this fall, we added airlines. the regulatory framework of the various agen- three new carriers — Continental Airlines, Star Alliance: We have grown as a cies across the globe and will continue to do KLM Royal Dutch Airlines and Northwest network, maintained our position of leadership so in the future. Airlines. in the industry and matured as an organization. Q: What are your plans for future expan- In May, SkyTeam signed an agreement As a result, we can more quickly develop new sion — do you plan to invite new airlines with Aeroflot as a preliminary step in the new products while at the same time reap the bene- into your alliance? member process. The agreement outlines fits of synergies and resulting cost reductions. Star Alliance: We continue to evalu- Aeroflot’s intentions to undertake exclusive oneworld: We’ve doubled in size — our ate our network and hope to expand it in those discussions to become a part of SkyTeam. In founding four members have been joined by areas of the world where we feel the need for the last five years, Aeroflot has made signifi- Star Alliance world, SkyTeam,

one four others. greater presence. With the integration of both cant progress as far as its Russian domestic At the same time, our focus has South African Airways and TAP Air Portugal in network, renewal and improvement of its expanded to many areas beyond the services 2005, we will substantially improve the quality fleet, its in-flight product and hub at Moscow and benefits we offer to passengers as our of our network, especially in Europe, Africa Sheremetyevo. Today, Aeroflot is undergoing

members have rightly wanted to increase the and Latin America, and offer a total of more a process that will ensure it will meet Photos courtesy of value they gain from the alliance. than 15,000 daily departures to 833 destina- SkyTeam requirements in terms of quality of Q: How does the current international reg- tions in 152 countries. By implementing our service and organization so that it can effec- one of the country’s most affluent regions levels consistent with the existing oneworld details on matters of governance cannot be ulatory environment affect the continued regional member concept, Star Alliance will tively join our alliance. with promising growth opportunities. As China members, disclosed. development of alliances? further enhance its network presence into In August, SkyTeam signed an agree- Southern’s main base, Guangzhou is also a key Enjoy strong brand awareness, Q: Are the current alliances the first step oneworld: Judging by some of their rul- more markets. This will occur in Finland once ment with China Southern Airlines, laying the transportation center in southern China. The Maintain high operational standards, in a worldwide airline consolidation? ings on alliances recently, the regulators seem our first regional carrier, Blue1, joins. Of groundwork for the airline to officially join the new Guangzhou Baiyun International Airport, Add value to both the alliance’s customers Star Alliance: The benefits that come to take on board more nowadays the benefits course, both China and India remain as two of alliance — an event to occur once China which opened earlier this month, will comple- and its existing partners, with membership in an alliance, both in terms that alliances can offer customers. The key the key markets that are of great interest to us. Southern fulfills SkyTeam’s requirements for ment SkyTeam’s strong hub network and fur- Contribute positively to oneworld’s “man- of increased revenue and reduced costs, cre- issue here is that all alliances are treated fairly oneworld: Where they can add benefit to quality standards. China is one of the fastest ther expand the alliance’s Asian offerings. ageable nature.” ate significant value and reduce the need for and equally. our customers and existing members, we will growing aviation markets and Guangzhou is China Southern is also preparing a new facility Q: How involved is the process of joining consolidation. in Beijing to serve customers. your alliance? oneworld: Undoubtedly. But alliances will Last year, SkyTeam announced that it is oneworld: Once it has been elected on still be able to provide big, consolidated air- developing an associate member concept that board as a member designate, any new recruit lines with benefits and value that they cannot THE HIGH LEVEL will allow smaller, regional carriers to join the must be able to offer the full range of achieve on their own — the ability to work SkyTeam network and provide customers with oneworld services and benefits before it can with other carriers to earn more revenue and News Briefs from Around the Globe access to even more destinations around the join. What this involves is spelled out in what reduce costs. vıew world. As we finalize this concept, we will we call our delivery requirements document. SkyTeam: There are several political and have several associate members to announce. One of our existing carriers will act as a economic hurdles that must be resolved Who carrier to effectively manage all the minimum cost while maintaining Q: What criteria do you use to determine sponsor, to provide guidance and assistance to before industry consolidation can occur. Korean Air aspects of its crew management flight reliability and schedule integrity. which new carriers to invite to join your the new recruit in this process, with our cen- Alliances, however, provide the benefits of operations. “By extending the AirCrews alliance? tral alliance team supporting the overall pro- cooperation by allowing members to improve What SkyTeam: As with all decisions, new gram. their market positioning, reach new destina- suite to our cabin crew, we will be member invitations are discussed among the How involved this all is depends on how tions, enhance customer service and enjoy Selected the Sabre ® AirCrews ® Crew Why able to further improve operational Governing Board and agreed upon by unani- aligned the new recruit is with oneworld’s poli- cost savings and knowledge sharing. Management Suite to improve cabin “The AirCrews suite has delivered efficiency and lower crew-related mous consent. Each new member must meet cies, procedures and processes. Yet, an alliance is only as strong as its a stringent set of requirements prior to receiv- SkyTeam: SkyTeam membership members. SkyTeam continues to move for- crew efficiencies and support end-to- excellent results in the management costs,” Lee continued. “Our staff will ing an invitation for membership. requirements comprise numerous factors ward, generating great value for our cus- end crew management needs as a of our cockpit crew, from long-term greatly benefit from the technology Star Alliance: They must be quality including customer service, safety levels and tomers and member airlines. part of an “innovative excellence” crew resource planning through day- from Sabre Airline Solutions, including carriers with outstanding safety and service technology adaptability. All new members Q: Do you anticipate any low-cost carriers reputations that enhance our network, product must live up to the alliance’s customer service will ever join one of the existing major strategy. During the last six years, the of-operations crew tracking,” said innovative tools like team rostering and service offering. standards and provide a consistent, high level alliances? airline has relied on the tracking and S.M. Lee, vice president of information and the Sabre ® AirCrews ® Crew oneworld: Any new recruit has to pass six of quality for their passengers everywhere SkyTeam: A key element of the scheduling capabilities of the suite to technology for Korean Air. “With the Connection. The technology will also membership benchmarks. They must: they fly. SkyTeam global network is the hub-and- Broaden and deepen our alliance’s network Star Alliance: There are a number of spoke system, which provides unparalleled help manage its cockpit crew. Utilizing AirCrews suite, we can always be sure act as a catalyst for us to continue our in strategic world regions, technical requirements that must be met; connectivity and an outstanding method for the entire AirCrews suite will enable the of the efficient deployment of crew at quest for innovative excellence.” a Offer a high-quality product and service however, as agreed with our member carriers, customers to travel using members of the

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members have rightly wanted to increase the and Latin America, and offer a total of more a process that will ensure it will meet of courtesy Photos value they gain from the alliance. than 15,000 daily departures to 833 destina- SkyTeam requirements in terms of quality of Q: How does the current international reg- tions in 152 countries. By implementing our service and organization so that it can effec- one of the country’s most affluent regions levels consistent with the existing oneworld details on matters of governance cannot be ulatory environment affect the continued regional member concept, Star Alliance will tively join our alliance. with promising growth opportunities. As China members, disclosed. development of alliances? further enhance its network presence into In August, SkyTeam signed an agree- Southern’s main base, Guangzhou is also a key Enjoy strong brand awareness, Q: Are the current alliances the first step oneworld: Judging by some of their rul- more markets. This will occur in Finland once ment with China Southern Airlines, laying the transportation center in southern China. The Maintain high operational standards, in a worldwide airline consolidation? ings on alliances recently, the regulators seem our first regional carrier, Blue1, joins. Of groundwork for the airline to officially join the new Guangzhou Baiyun International Airport, Add value to both the alliance’s customers Star Alliance: The benefits that come to take on board more nowadays the benefits course, both China and India remain as two of alliance — an event to occur once China which opened earlier this month, will comple- and its existing partners, with membership in an alliance, both in terms that alliances can offer customers. The key the key markets that are of great interest to us. Southern fulfills SkyTeam’s requirements for ment SkyTeam’s strong hub network and fur- Contribute positively to oneworld’s “man- of increased revenue and reduced costs, cre- issue here is that all alliances are treated fairly oneworld: Where they can add benefit to quality standards. China is one of the fastest ther expand the alliance’s Asian offerings. ageable nature.” ate significant value and reduce the need for and equally. our customers and existing members, we will growing aviation markets and Guangzhou is China Southern is also preparing a new facility Q: How involved is the process of joining consolidation. in Beijing to serve customers. your alliance? oneworld: Undoubtedly. But alliances will Last year, SkyTeam announced that it is oneworld: Once it has been elected on still be able to provide big, consolidated air- developing an associate member concept that board as a member designate, any new recruit lines with benefits and value that they cannot THE HIGH LEVEL will allow smaller, regional carriers to join the must be able to offer the full range of achieve on their own — the ability to work SkyTeam network and provide customers with oneworld services and benefits before it can with other carriers to earn more revenue and News Briefs from Around the Globe access to even more destinations around the join. What this involves is spelled out in what reduce costs. vıew world. As we finalize this concept, we will we call our delivery requirements document. SkyTeam: There are several political and have several associate members to announce. One of our existing carriers will act as a economic hurdles that must be resolved Who carrier to effectively manage all the minimum cost while maintaining Q: What criteria do you use to determine sponsor, to provide guidance and assistance to before industry consolidation can occur. Korean Air aspects of its crew management flight reliability and schedule integrity. which new carriers to invite to join your the new recruit in this process, with our cen- Alliances, however, provide the benefits of operations. “By extending the AirCrews alliance? tral alliance team supporting the overall pro- cooperation by allowing members to improve What SkyTeam: As with all decisions, new gram. their market positioning, reach new destina- suite to our cabin crew, we will be member invitations are discussed among the How involved this all is depends on how tions, enhance customer service and enjoy Selected the Sabre ® AirCrews ® Crew Why able to further improve operational Governing Board and agreed upon by unani- aligned the new recruit is with oneworld’s poli- cost savings and knowledge sharing. Management Suite to improve cabin “The AirCrews suite has delivered efficiency and lower crew-related mous consent. Each new member must meet cies, procedures and processes. Yet, an alliance is only as strong as its a stringent set of requirements prior to receiv- SkyTeam: SkyTeam membership members. SkyTeam continues to move for- crew efficiencies and support end-to- excellent results in the management costs,” Lee continued. “Our staff will ing an invitation for membership. requirements comprise numerous factors ward, generating great value for our cus- end crew management needs as a of our cockpit crew, from long-term greatly benefit from the technology Star Alliance: They must be quality including customer service, safety levels and tomers and member airlines. part of an “innovative excellence” crew resource planning through day- from Sabre Airline Solutions, including carriers with outstanding safety and service technology adaptability. All new members Q: Do you anticipate any low-cost carriers reputations that enhance our network, product must live up to the alliance’s customer service will ever join one of the existing major strategy. During the last six years, the of-operations crew tracking,” said innovative tools like team rostering and service offering. standards and provide a consistent, high level alliances? airline has relied on the tracking and S.M. Lee, vice president of information and the Sabre ® AirCrews ® Crew oneworld: Any new recruit has to pass six of quality for their passengers everywhere SkyTeam: A key element of the scheduling capabilities of the suite to technology for Korean Air. “With the Connection. The technology will also membership benchmarks. They must: they fly. SkyTeam global network is the hub-and- Broaden and deepen our alliance’s network Star Alliance: There are a number of spoke system, which provides unparalleled help manage its cockpit crew. Utilizing AirCrews suite, we can always be sure act as a catalyst for us to continue our in strategic world regions, technical requirements that must be met; connectivity and an outstanding method for the entire AirCrews suite will enable the of the efficient deployment of crew at quest for innovative excellence.” a Offer a high-quality product and service however, as agreed with our member carriers, customers to travel using members of the

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same alliance from their departure city to any Some low-cost carriers offer a better Finnair location in the world. A majority of the level of service and network than some of Scandinavian Airlines Helsinki, Finland Stockholm, Sweden world’s low-cost carriers focus on point-to- their traditional counterparts. As they grow fur- Lufthansa Frankfurt, Germany point travel and thus would not enhance our ther, more are likely to see that global alliance bmi Derby, United Kingdom global network. However, several members can provide them with benefits while still British Airways Northwest Airlines London, England LOT Polish Airlines St. Paul, Minnesota, USA Warsaw, Poland have relationships with low-cost carriers, enabling them to maintain their cost focus. Aer Lingus Dublin, Irelannd and those relationships benefit our passen- Q: Do you think the membership of United Airlines Chicago, Illinois, USA Air France-KLM CSA Czech Airlines Paris, France and Amsterdam, Prague, Czech Republic gers since most are both business and alliances will remain stable for the most part, The Netherlands Air Canada Korean Air leisure travelers. or do you ever expect to see movement of Montreal, Quebec, Canada Iberia Seoul, South Korea Madrid, Spain US Airways Austrian American Airlines Star Alliance: The business models members from one alliance to another? Is Arlington, Virginia, USA Spanair Vienna, Asiana Airlines Fort Worth, Texas, USA Alitalia All Nippon Airways (ANA) Delta Air Lines Palma de Mallorca, Spain Austria Seoul, South Korea Tokyo, Japan and product lines of network carriers and there anything to prevent member airlines Continental Airlines Atlanta, Georgia, USA Rome, Italy Houston,Texas, USA Cathay Pacific low-cost carriers are not compatible, particu- from moving to another major alliance? Hong Kong larly when you consider that global access oneworld: Companies in shipping formed and network connectivity are fundamental alliances long before airlines. That industry has Aeroméxico Mexico City, Mexico parts of our business. shown that the more members you have in an Thai Airways Bangkok, Thailand oneworld: They already have. alliance, the less stable it becomes. That is

Aer Lingus has transformed itself into a one reason why oneworld has maintained our Singapore Airlines Singapore, Singapore low-cost carrier since it joined oneworld four membership at manageable levels. oneworld years ago. The no-frills subsidiaries of some Some alliances have already lost mem- other legacy carriers who are members of other bers. For example, Canadian International SkyTeam groupings are also affiliates of those alliances. was forced to leave oneworld when the airline

Star Alliance VARIG Rio de Janeiro, Brazil Air New Zealand Auckland, New Zealand LAN Santiago, Chile Finland’s Blue1 will become Qantas Sydney, Austrlia the first regional carrier to join Members of oneworld, SkyTeam and Star the Star Alliance thanks to spon- Alliance have headquarters in 32 cities sorship by its parent company, around the world. SAS, a current member

Photo courtesy of Star Alliance Photo courtesy of the alliance.

was taken over by Air Canada. So there for member airlines — helping members alliance is implementing an associate THE HIGH LEVEL may well be some further movement, but the offer a better product for their customers, member program and expects to announce core membership is likely to remain stable. develop their business, benefit from cost the first SkyTeam associate members News Briefs from Around the Globe SkyTeam: Members of the SkyTeam savings, etc. During the past four years, next year. vıew alliance have strong ties with each other, and SkyTeam has proven its ability to do just Star Alliance: A membership in Star many member carriers have relationships with that, making it an attractive alliance Alliance needs to be a win-win situation for Who Why each other that have spanned decades, dating prospect for many carriers. As stated previ- the carrier and the alliance as a whole. In to before the alliance was formed. ously, SkyTeam continues to consider new other words, as long as a member carrier Air Andaman “In the first year of operation, Air it is a best-of-breed solution with the The foundation of a successful alliance members in key regions, such as Southeast sees the value of being in the alliance, there What Andaman is expecting significant pas- most advanced functionality of any is its ability to maximize and maintain benefits Asia and South America. In addition, the will be no need to move elsewhere. a senger volumes due to interline and on the market. We recognize that the Selected the SabreSonic ™ Passenger codeshare partnerships we have reservations and departure control sys- Solutions to power its regional growth established, and we are forecasting tems are the core of all our opera- strategy by providing a reliable, significant year-over-year growth in tions, and we’re confident the +count it up scalable and flexible information passengers boarding,” said Dean SabreSonic solutions will help us — Year Ellen Church became the world's first flight attendant. Prior to becoming a flight attendant for United Airlines, technology solution that will enable Mills, president of Air Andaman. reduce operational costs, improve 1942 Church served in World War II as an on-board nurse, providing medical care for wounded soldiers. the carrier to adapt quickly as its “To support this future growth, we efficiency and enhance our customer business model evolves. selected the SabreSonic solutions as service.” a

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Photo courtesy of Star Alliance of the alliance.

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