© 2011 Sabre Inc. All rights reserved. wearelistening@sabre.com

A MAGAZINE FOR AIRLINE EXECUTIVES 2011 Issue No. 1

SkyTeam:

Merchandising through GDS gives airlines additional storefront

Strategic commercial planning increases airline revenues

Avianca-TACA merger changed Latin America aviation

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A Conversation With É Leo van Wijk, Chairman, SkyTeam Pg. 10

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

Caring More About You

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Pushing Boundaries

By Gordon Locke I Ascend Contributor

Technology must work effectively in an airline’s current environment as well as be easily adaptable for future modifi cations.

Powering Airlines With Future-Ready Technology Today

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s airlines around the world entered 2011, andview 2012, they have done so with more com-monality in a cadre of challenges than perhaps at any other point in aviation history . In the past,

singular threats have been the mainstay of reactive business planning. However, three distinct challenges have emerged that all airlines must now grapple with and plan proactively to be

prepared for the future. The converging challenges harness the true

promise of:Better performance and profitability;

Rapid growth of mergers, acquisitions and new partnership models;

More passenger traffic.Travelio.net recently featured an article,

sourced from Travel Daily News, called “Airlines: Surviving In A Changing World.” The article looked at 2011 and beyond and summarized the challenges and opportunities in two ways:

In most parts of the world, the internationalairline industry is evolving from a heavily pro-tected business with government-run activity to a commercial hybrid business, presenting airlines with massive challenges.

Some airlines adapt more effectively by tack-ling one or more of the following:

Rapid fleet and network development; A new business model;

Innovative products and services; Consolidation or cross-border joint-ven-ture activity; Financial outperformance (or financialdistress).

At Sabre Airline Solutions ®, we offer manyairlines the solutions and expertise they need to flex their business models and see the rapid, competitive profit-making change they need. Our strategy is to help ensure airlines are ready today for tomorrow’s challenges.

In doing so, we make it possible for them to put in place the capabilities they uniquely need for the way they want to do business — without having to make sluggish, expensive wholesale technology platform changes. Granted, some airlines need wholesale technology changes end to end. We can make that happen as well with faster implementation timeframes. That is the premise of powering airlines today with future-ready technology.

Three examples best illustrate this, including:1. Evolving the user experience,

2. Becoming alliance-ready faster than ever before,

3. Realizing a better total cost of ownership from solutions adopted to solve the industry’s many challenges.

User ExperienceAt first blush, user experience applies only to

travelers’ needs and does not transcend to the needs of customer -facing airline employees. To the contrary, the experience of using a solution on the employee side of an airline is just as important as the customer side. Both will signifi-cantly determine the success of a point-of-sale and point-of-service strategy.

The science of user experience is also far more complex than examining and changing navigation. The ability to address the changes needed for most airlines has been daunting until now. Why? Because airlines have not been able to marry real-time and near -real-time data with superior, flexible user interfaces that offer a unique no-touch to high-touch brand experience.

Changing and adapting the user experience on the personnel side of the equation is critical. The ability to flexibly set business rules or learn, adopt and administer solutions quickly defines a “fast” airline from a slow-to-respond one.

It’s the difference in how a customer:Sees fares,

Receives a promotion, Gets availability,

Has a unique value score assigned to him,Views his experience at the airport (via selfservice or full service).We currently provide a number of airlines

with a combination of strategy-enabling capa-bilities. They range from up-to-the-second data to easier consumption of that same data through advanced GUIs. Our Sabre® ASxsmAirline ServicesExchange platform helps airlines implement or build user interfaces with state-of-the-art toolkits.

Thus, end to end, we help airlines: 1. Launch the user experience and supporting

interfaces they want more rapidly,2. Use valuable data they otherwise find hard to

access,3. Empower airline staff with relevant customer

or operational data,4. Support on-the-fly configurable scenarios

using an advanced rules engine.

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While this is achievable with our completecustomer sales and service solution, we also support an airline’s current environment with these options should it be locked into an inflexible technology platform that needs to be “opened up.”

Alliance ReadinessJoining an alliance is a considerable change for

an airline. The attractiveness, and sometimes necessity, of joining an alliance to compete and drive loyalty, also falls into the aforemen-tioned scenario of the user experience and supporting interfaces. There is more at stake though. Alliance membership impacts the entire airline enterprise across commercial planning; customer sales and service; and airport, crew and flight operations.

Achieving alliance membership has typi-cally been slowed by what may appear to be an endless sea of business process changes and hype about the need for an alliance platform. The real challenge simply involves customer and operations data within and among airlines.

The premise of an alliance is not just a common reservations platform. It’ s about gain-ing more passengers and creating a customer experience across multiple airlines. Alliance membership is typically a long-term commit-ment, and effective adoption is paramount to success and a quicker return on investment.

Therefore, it is crucial that we provide software and services that help airlines look at the entire picture. For example, if you look at our partner -ships across SkyTeam, you see that the majority share of members in the alliance use some 118 solutions from across our portfolio.

As this footprint continues to grow with SkyTeam, and other global alliances, we con-tinually look well into the future to ensure we provide an unmatched, cohesive alliance tech-nology model. It must be one that addresses airlines’ needs across the entire operation.

Succeeding in an alliance means:Fast adoption of technology,

Flexibility in how the data is used across all solutions (not just reservations),

Configurability to meet alliance needs while not erasing a member’s unique brand. We are helping airlines such as Aeroflot,

Aeromexico, Ethiopian Airlines, Kingfisher Airlines and V ietnam Airlines maximize their alliance presence or join one.

Our employment of the ASx exchange proves that to innovate, an airline doesn’t always have to replace technology or change platforms. With a powerful platform and Software-as-a-Service model, you can also tap into and configure new business rules and create new outcomes with data and, therefore, execute faster. Since forging great technology is the nature of our business, we utilize SaaS applications and platforms that will define the next decade of solutions for the industry .

The case is also there for groundbreaking technology that empowers new types of alli-ances. One example is our partnership with LAN and our new multi-carrier platform that enables all airlines under LAN ownership to work together as one. The LAN group of airlines must maintain independent opera-tions while also creating a seamless customer experience among its airlines and oneworld members. Our new technology supports that need.

Total Cost Of OwnershipFinally, there is the dimension of total cost

of ownership. To adapt and rapidly evolve capabilities in step with consumer trends (staff productivity or requirements for new business relationships), change must be affordable and deliver a faster return.

The value of technology is not only in its flexible features and functions. It must serve long term and offer the ability to adapt with evolving capability needs. Without this, an inflexible platform or hard-to-configure applica-tions can paralyze an airline. Further, the solutions also must have a transparent com-mercial model so total cost of ownership is clear. Otherwise hidden costs, polling charges, inefficient workflow and added integration create an opaque commercial relationship that greatly stalls progress.

Today, many airlines face long migrations, impractical business process changes and protracted adoption. This makes the cost of owning and benefits hard to measure short term.

We take a different approach. Our model provides a complete view of an airline’s

customer and operational data. It helps deter -mine how to best use the information across the enterprise. Our platform represents an environment for better total cost of ownership that includes the right architecture and toolkits an airline needs to create new capabilities on its own or teaming with us to do it.

The result? Better workflows, improved inter-faces and configurable solutions that drive fast adoption and can serve long term.

Beyond technology, we provide expertise to support an airline. As the largest SaaS provider with airline domain expertise and a powerful port-folio, our value proposition goes beyond lower total cost of ownership. We also place great emphasis on total benefits of ownership.

With our solutions, the benefits continue well after the initial return is measured. We provide healthier IT operations so airlines can focus on flying and operating their businesses. At the same time, they benefit from a nimble platform whereby new capabilities can be augmented long term. This, coupled with clear , transparent pricing, means airlines can predict costs and enjoy benefits with greater clarity.

The ASx exchange creates that reality . By the end of the year, close to 70 airlines will lever-age our ASx platform and realize its powerful capabilities. Some already doing this include Aegean, Aeroflot, Emirates, Air New Zealand, British Airways, Cathay Pacific Airways, Croatia, Qantas and Virgin Blue.

The decade ahead is about business model adaptation when needed and proactive competi-tive response as a day-to-day way of operating. Consumer expectations are already shifting more rapidly, thus airlines need online storefronts and a service experience that caters to airline customers and their respective cultures.

Airline employees need advanced tools that are easy to use. This enables them to seamlessly assist loyal customers traveling from one alliance member to another.

Additionally, given the volatility of oil prices and other converging challenges, airlines cannot afford to use technology that is restrictive, has a limited lifecycle or drives unpredictable costs.

We are onboard with these needs. And we are committed to innovation and transparency to help you push boundaries today and see a clear path into the future. a

Gordon Locke is Vice president of portfolio marketing and strategy for

Sabre Airline Solutions. He can be contacted at gordon.locke@sabre.com.

As the largest SaaS provider with airline domain expertise and a powerful portfolio, our value proposition goes beyond lower total cost of ownership. We also place great emphasis on total benefits of ownership.

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