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FUELING up a Look at the Rising Cost of Fuel and Turboprops Make Strong Its Effect on the Industry A MAGAZINE FOR AIRLINE EXECUTIVES 2007 Issue No. 1 2007 I ssue N o. 1 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 A conversation with Wolfgang Prock-Schauer, the chief executive officer of Jet Airways. Special Section www.sabreairlinesolutions.com I NSIDE FUELING UP A look at the rising cost of fuel and Turboprops make strong its effect on the industry. 6 comeback 1892.7 L 500 gl WestJet saves US$5 million 1514.16 L 400 gl 36 annually 1135.62 L 300 gl 757.08 L 200 gl GOL scores big in Latin 78 America Inc. All rights reserved. and/or service marks of T aking your airline to new heights Holdings Corporation. ©2005 Sabre Airline Solutions logo are trademarks 2007 Issue No. 1 Editors in Chief Stephani Hawkins B. Scott Hunt 3150 Sabre Drive Southlake, Texas 76092 an affiliate of Sabre www.sabreairlinesolutions.com Sabre Airline Solutions and the Sabre Art Direction/Design Charles Urich Design Contributors Erin Jackson, Shari Manning, Tim St. Clair Contributors Teresa Alderink, Umit Cholak, Vinay Dube, Craig Foster, Kristen Fritschel, Carla Jensen, Dana Knight, Ilia Kostov, Srinivas Kothakota, Hanjo Krause, Craig Lindsey, Gordon Locke, Roman Lopatko, Apurva Mathur, Sandra Meekins, Mukundh Parthasarathy, Simone Silveira, Vish Viswanathan, Gabe Werth. Publisher George Lynch Awards 2005 and 2006 International Association of Business Communicators Bronze Quill, Silver Quill and Gold Quill. 2004 International Association of Business Communicators Bronze Quill and Silver Quill. 2004, 2005 and 2006 Awards for Publication Excellence. Reader Inquiries If you have questions about this publication or suggested topics for future articles, please send an e-mail to [email protected]. Address Corrections Please send address corrections via e-mail to [email protected]. Sabre, 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. ©2007 Sabre Inc. All rights reserved. Printed in the USA. marks of an affiliate of Sabre Holdings Corp. ©2007 Sabre Inc. All rights reserved. Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and/or service Helping you better market, sell, serve and operate — from planning through execution. We help you plan how to best offer your 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 We help you 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 We help you make the experience easier for your serve customers throughout the travel process. • Customer notification and trip information • Customer processing We help you manage daily operations to efficiently operate fly your 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 special section 40 6 30 62 Propped Up Jet Stream Burning Fuel More airlines find value in adding CEO Wolfgang Prock-Schauer Airlines around the world are turboprop aircraft. discusses how Jet Airways has identifying ways to offset the achieved significant success in a rising cost of fuel. 9 Unlocking Hidden short time. Revenues 64 Group traffic generates 36 A Streamlined Approach Saving Fuel additional revenue. to Managing Staff Carriers have numerous options Advanced resource management to minimize fuel usage. 14 technology helps WestJet save The “X” Factor US$5 million annually. 56 Reconnecting with 67 Many airlines looking to “X” Corporate Travelers The Cost of Fuel factors to produce supplemental 40 JetBlue reestablishes Airlines take steps to cope with revenue. Delta’s Turn participation in global distribution high fuel prices. Delta Air Lines is back on the systems to reach corporate 17 Drive for Robustness: road to profitability. travelers. 68 From Optimization to Stretching the Tank Simplcity 43 Air transporters operate more More robust and hybrid airline Hub of Russia effectively to lessen the impact schedule planning is on the KDAvia’s ambitious growth plans of record-high fuel rates. horizon. include building the first true hub in Russia. 20 Winning Customer Relationships 46 Low-cost carriers inspire network Yemenia U-Turn airlines to change their traditional Yemenia implements turnaround perspective methods. plan to improve profits. 25 Traveler of the 50 Future A New Aeroflot New technologies significantly Aeroflot identifies several key enhance the travel experience. objectives to help it remain an industry leader. 28 Excess Baggage 53 Outside entities such as King of Good Times increased security have a A strong technology platform powerful effect on airline supports Kingfisher Airlines’ operations. desire for unmatched guest services. 6 t wouldn’t seem one cent would have much of an effect on a US$450 billion a year industry. But, in air transportation, where the difference between profit I and loss can seem thinner than the air at 30,000 feet, one penny can have a dramatic impact. Take the cost of fuel. Each penny swing in the cost of a gallon of jet fuel results in an increase or decrease of about US$550 million for the industry. As part of our first special section, we discuss fuel and how to maximize it. But, the issue of fuel consumption involves so much more than just costs. In today’s environment — pun intended — pressure is growing for airlines to operate more “green” by reducing their carbon emissions. Of course, there are incen- tives for airlines to become more environmentally conscious, ascend contents 82 regional products company 70 76 80 Taking It Online. Off the Mainframe One Stop Carriers increase online sales by North American carriers reap A single IT provider promotes partnering with Travelocity. benefits from solutions built on software integration, streamlined open-systems technology. training and improved 72 Right Offer, Right Person, productivity. Right Time 78 Behavioral targeting tools help Scoring a GOL 82 airlines better use travel agents GOL becomes one of Latin Legendary Quality to attain prospective customers. America’s leading airlines in a The highest levels of quality little more than five years. guarantee customer satisfaction 74 and repeat business. “Cashe”ing Out New functionality in the 78 Sabre GDS provides accurate availability responses in a high- volume transaction processing environment. with Tom Klein Group President, Sabre Airline Solutions/Sabre Travel Network not the least of which is reduced costs. But the push for more ing sustainability practices, cutting toxic emissions, engaging in charitable green operations will likely have other far-reaching implications. activities, developing products that are environmentally safe. It’s something The Kyoto Protocol requires developed countries to reduce that we at Sabre Holdings have adopted — our headquarters building in emissions by an average of 5 percent below 1990 levels by 2012. Texas, for example, has been recognized by the U.S. Green Building Council And although the air transportation industry currently produces only for leadership in energy and environmental design. Our sister company, 2 percent to 3 percent of the world’s carbon output, more atten- Travelocity, was the first major online agency to give travelers the option tion is being focused on our industry and its impact on the environ- to purchase “carbon offsets” when booking their vacation travel. The ment. Even with improvements in fuel efficiency, emissions from Sabre Travel Network® business has developed a product that enables international aviation increased 70 percent between 1990 and 2002. business travel agencies in Europe to produce reports for their corporate There have been some encouraging recent developments that customers about the environmental impact of the flights they are booking. could help reduce aviation’s emissions. Last year, for example, the U.S. Sustainability programs are becoming seen not only as Air Force began testing a synthetic jet fuel that burns with less pollution good will but good business. Companies benefit from choosing than regular jet fuel. So far, the tests have indicated the synthetic fuel, vendors with sustainability programs. An article in BusinessWeek made from natural gas, offers identical performance to traditional JP-8 fuel. noted that companies that embrace sustainability “help avert Such developments will help meet the need to be costly setbacks from environmental disasters, political protests and more green. More travelers are looking to counter their carbon out- human-rights or workplace abuses.” In other words, companies put, choosing airlines that have offset programs, which invest in envi- that practice sustainability are more reliable and stable long term. ronmentally friendly activities such as planting trees or develop- But, of course, environmental issues are not the only thing on ing renewable sources of energy. And more governments are likely to the radar screen of airlines. In our industry, the focus changes daily, and follow the lead of the European Union in regulating carbon emissions. issues that sat on the backburner for months can quickly become top pri- In December, the European Union added air transportation to ority. In this issue, we cover a range of issues currently facing our industry. its emissions trading scheme, which will cause airlines flying to, from or It’s certainly an interesting time to be in air trans- within the union to meet emissions targets. Although the move has proven portation. We hope you enjoy this issue, and we look for- controversial, it likely is just the first step. In February, the International Civil ward to visiting with you again in the coming months.
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