Session 6: Expanding Choices in Distribution

Moderator:Mark Pilling, Editor, Airline BusinessPanelist: Michael Randall, VP, Worldwide Business Development, ITA SoftwareGeorg Bolz, Director Portflio Management Airline Solutions, Lufthansa SystemsMaurice Coleman, Head of Commercial Strategy, Aer LingusDarren Peisley, General Manager of Distribution Strategy & Sales Planning, Qantas Graham Wareham, Star Alliance: General Manager for Product Distribution, Air Canada

SESSION 6:Expanding Choices in

DistributionLufthansa Systems

Dr. Georg F. BolzDirector PortfoliomanagementAirline Solutions

Am Weiher 24D-65451 Kelsterbach

georg.bolz@lhsystems.com

Distribution

Channel

ManagementLoad Control

Check-In/Boarding

Ticketing

InventoryReservationSchedule

Management

Future Airline Core Environment

Hotel/Car

ATO’s/CTO’sCall CenterCorporateImplants

Airline.com

GDS 2-NGDS 2-N

GDS

GNE

Travel agents/Tour operators/Consolidators

Private ACAP’s

LSYTMC’s / Corporate

Thesis 1: Active management of the various distribution channels will be a vital core ingredient of advanced airline business models.

Thesis 2: GNE‘s are about to become a viable alternative, and evolve to absorb a significant portion of the market in a sustainable way.

GDS

FACE

Distribution Channel Mgr

Travel Agencies

Airline

GDSGDSGDSGDSGNE

selective access

private fares

global access

public fares

Status GNE’s:

Industry background of their management teams

Endorsement from major carriers, including Star Alliance

Functionally ready, platforms installed, test usage

Contracts with major carriers and large TMC’s signed

DCA-type contracts expire in 2006, GNE’s ready to take-off

GNE’s started in the US market in 2005 and will expand internationally, with support from regional airline groups and alliances.

GNE’s are backed by Venture Capitalists to expand their scope.

GNE providers are enhancing their functionality by partnering with airline IT providers to become a full scale alternative to traditional GDS.

GNE‘s are serious contenders and a viable alternative

GNE‘s will become real in 2006

GNE‘s and GDS‘s will continue to coexist in the market, developing different profiles, serving different needs

- -off

onally,

th airline DS.

Thesis 3: Evolution of airline distribution is driven by cost reduction; selective availability of content and control of channel cost are key.

Airline RESOwn ContentDirect Sales

NewGen Tech.

Community PlatformsCommunity ContentPrivate/Nego Fares

GNE-Tech.&Comm.Enh.

GDS„Full Content“

TA‘s, TMC‘s, CorporatesHost Tech.

AirlineReservation Center

GDSPublished Tariffs

Trad.TA with global reachHost Tech.

GDS/spec.contractsCorporate/Private Fares

Host Tech./marg.costGNE

Full ContentNewGen Tech.GNE

Private/Corporate FaresTMC‘s/Corporates

NewGen Tech.

Airline CRSOwn Content

Own Sales Offices

Airline RESOwn ContentDirect SalesHost Tech.

IBE„Web Fares“Direct Sales

GDSFull Content

Travel Agencies

new scale

Airline RESOwn ContentCall Center

Cutting CommissionsIntroducing

ServiceFees

DirectConnect

„DCA3“

OnlinePortals

AirlinePortals

Note: conceptual - not to scale.overall distribution costs before,platform costs to airlines after „disruptive period“ ca. 2000-2005.