James Hogan, President and CEO, Gulf Air

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James Hogan, President and CEO, Gulf Air A MAGAZINE FOR AIRLINE EXECUTIVES 2004 Issue No. 1 www.sabreairlinesolutions.com T aking your airline to new heights ON THE ROUTE TO RECOVERY A conversation with … 2004 IssueNo.1 James Hogan, President and CEO, Gulf Air INSIDE Industry Showing 19 Signs of Recovery Low-Cost Carrier Model 38 Continues to Evolve Recent Breakthroughs 79 in Revenue Management What do you think? proven Taking your airline to new heights 2004 Issue No. 1 leadership. Publisher See something in Ascend an affiliate of Sabre Holdings Corporation. ©2004 Sabre Inc. All rights reserved. James Filsinger Sabre Airline Solutions 1 E. Kirkwood Blvd. you would like to improve? Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and/or service marks of Southlake, Texas 76092 www.sabreairlinesolutions.com Editors Stephani Hawkins B. Scott Hunt Like the content and the design? Designer James Frisbie Print Manager Shari Stiborek Have an opinion on how Contributors Raida Abumaizar, Pam Ashley, the magazine could be Hans Belle, Kathy Benson, Erin Bouck, Jack Burkholder, more beneficial? Michael Clarke, Kathryn Crispin, Cameron Curtis, Karen Davis, Karen Dielman, Walter Di Luca, Melodie Estes, Tim Finholt, Becky French, Greg Gilchrist, Masud Hashem, Roland Hollis, Carla Jensen, Craig Lindsey, Apurva Mathur, Michael McCurdy, It’s time for all-out innovation. And it’s time for proven leadership. Mission-criti- Jamie Patel, Michelle Porter, Gary Potter, Kamal Qatato, cal areas require time-tested solutions. Longer than any other company, we’ve Giovanna Rosselli, Michelle Schneider, pushed technology forward to deliver vital systems airlines need to stay ahead, Ron Smalley. We would like to to make the impossible practical. Reader Inquiries If you have questions about this hear from you! publication or suggested topics for Working closely with carriers, we’ve developed a portfolio of flexible, integrated future articles, please send an e-mail Please visit http://www.sabreairlinesolu- 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 tions.com/survey/Ascend.htm and complete e-mail to [email protected]. Learn how together we can put proven leadership to work for you. Call us at 682 Sabre Airline Solutions, the Sabre Airline 605 1000. Or visit www.sabreairlinesolutions.com. Solutions logo and products noted in italics in a five-minute survey to help us bring you the this publication are trademarks and/or service marks of an affiliate of Sabre Holdings Corp. All other trademarks, service marks and trade best aviation industry magazine possible. names are the property of their respective owners. ©2004 Sabre Inc. All rights reserved. Printed in the USA. smart. proven. bankable. contents 12 62 76 profile regional industry products company Taking its A New Lease The Revolution’s Getting Fit A Higher Faring Well: Air New Putting IT 4 12 38 45 51 62 70 Share on Life Here for Recovery Plane Zealand Revamps its all together Advanced market data and More airlines turn to leasing The low-cost carrier model By maximizing resources, Middle East airlines find Fare Structure A strong user community analysis tools help Mexicana as an option for acquiring continues to evolve with transportation companies distinct ways to meet the Air New Zealand CEO Ralph helps create products more better analyze key markets. new aircraft. new features and customer can take advantage of the unique needs of the region. Norris discusses how the airline’s tailored to the industry. amenities. improving environment. revamped fare structure Iberia Airlines: CRM: Going Beyond a Coming has fueled a turnaround. Channel 6 16 56 76 Focused Strategy for Frequent Flyer Program On the Route Faster than the of Age Surfing 40 48 an Optimistic Future to Recovery speed of Industry Everything Talking Technology A successful CRM program Low-cost carrier ATA Airlines 66 Accessing multiple 79 Strategic planning helps the involves multiple customer Gulf Air CEO James Hogan The new SabreSonic™ passenger stays true to its roots while to Gain channels of distribution With … Barry Smith Spanish flag carrier maintain touch points. discusses how the airline’s solution offers highly flexible also branching out to develop While profitable, Estonian Air through a global distribution Recent breakthroughs continue its leading position. recovery plan has helped it reservations, inventory and a full-service, hub-and-spoke continues to adapt to the system enables airlines to pushing the evolution of The Long Night’s prepare for future growth. departure control functionality. network. new airline landscape. increase their reach. 19 revenue management. 6 Journey into Day After a prolonged period, the airline industry is showing signs of recovery. Sizing 24 with Tom Klein Group President, Sabre Airline Solutions it Up perspective Airbus and Boeing offer different views for the ’ve been waiting far too long to confidently write profitability even during the most challenging of times. And future of aircraft. about an industry recovery. But having just carriers in the low-cost segment, which continue to help reshape returned from visits to many of you around the the industry with creative new ideas and methods of operation, Leveling the 28 globe, I feel we must embrace optimism while constantly push their business models to include additional Playing Field continuing to work hard to improve the industry customer-friendly touches such as new in-flight entertainment By revamping their business and Iface our challenges head on. Optimism will be welcomed options. models, network carriers by all of our dedicated people working in the industry — those Big challenges remain despite our improved forecasts. There can effectively compete thousands of airline employees who look to their leaders for is a punishing trend in fuel prices with few good hedging options. with low-cost airlines. signs that our great industry will be OK; different yes, but OK! Airports haven’t reduced costs in line with the industry need, and We’ve worked closely with many airlines as they have taken governments continue to be inconsistent regarding consolidation Scoring Points Self Serve: Airlines 10 35 incredible steps to navigate the last three years, and now as the opportunities that appear to be positive for our industry. The with Passengers Increasingly Employ global economy improves and passenger traffic begins to climb, consumer is likely to remain frugal — traveling, but with the Alaska Airline’s enhanced Customer-Enabling Tools airlines will be poised to enter a period of improved performance. expectation of reasonable fares whether for leisure or business loyalty program helps boost Popular customer check-in With early traffic results suggesting a strong 2004, we should see trips. For too many airlines, the return of passengers has not customer satisfaction and tools also help airlines reduce strength in almost all regions of the world. Airlines have done resulted in a return to profitability. We still have our work cut return the airline to profitability. costs and generate revenues. a tremendous amount of restructuring, putting themselves in out for us! position to enjoy the benefits of the improving conditions. To my colleagues around the industry, I can only say “thank 24 We have challenges, which I will get to shortly, but on balance, you” for allowing Sabre Airline Solutions to play a role in your there is reason for optimism. recovery and improvement plans. Our expertise in technology, Carriers such as Gulf Air continue to transform themselves operations research and airline business is a powerful force, by streamlining their operations, developing focused strategic and we have it solely and passionately focused on solving the plans and squeezing out inefficiencies. Under the leadership of problems you face every day. Again, thank you for allowing us James Hogan, a reinvigorated Gulf Air stands ready to take on to serve you. all challengers and maintain its position as a world-class airline. We’ve seen the same type of steps at airlines such as Spain’s Iberia, which by executing a series of strategic three-year plans has changed its operation so it has been able to maintain its profile profile are able to modify and adapt flight schedules which we feel is much more feasible by har- through reduced maintenance, support, hard- to fit traffic flow patterns. Due to the tool’s nessing the capabilities offered by the market ware and distribution costs. The eMergo solu- ability to identify the most popular routes and data and analysis systems. This would trans- tions give carriers of all sizes access to leading Taking its Share transit points, Mexicana can target the best late to about a US$40 million increase in rev- technology, enabling greater integration possible departure and/or arrival times and enues for us.” among software products by delivering quick- maximize passenger loads. With uncertainty regarding privatization er implementations, lower total cost of owner- Photo courtesy Mexicana “When we first implemented the for Aeromexico and Mexicana, it is important ship, predictable monthly pricing and fewer Mexicana better analyzes its key markets TransVision analyzer, our users were taken to Mexicana that it remains well entrenched complications than running an onsite system. by utilizing leading market data and aback by all of the features and functionality,” and prepared to compete for market share. Providing analysts with systems that said Zamudio. “Sabre Airline Solutions has “Last year we maintained the same offer more efficient ways of detecting market analysis systems. done a good job of addressing our needs, and market share while other competitors lost 3 trends and changes has helped Mexicana since the last release, our users can export percent to 4 percent in the domestic market make wiser decisions. anything they see on their screens to Excel.” and 2 percent in the Mexico-USA market,” “By using the TransVision analyzer and By Kathy Loveless and Badal Vyas | Ascend Contributors The market analysis tools have already said Zamudio.
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