Welcome to Dublin!Airline Distribution 2006

Airline Distribution 2006

Great Keynote Speakers Impressive Executive Panel New Airline Distribution Strategies Data Privacy & Fraud Prevention The Next Generation in Payment Models Rise & Predominance of the OTAs

WHAT’S NEXT?

Agency fees . . . ?

GDS fees . . . ?

“If the airlines think GDS fees are expensive, wait until they start

looking at credit card fees.”

-- Richard Clarke, DirectorTravel Technology Group,

LtdAirline Distribution 2005Bangkok

American Express reports record earningsRevenue increase driven by strong growth in card business

Updated: 6:19 p.m. ET April 26, 2005

US$7.4 Billion Losses for Global Aviation in 2005

2005 Airline Losses May Triple Past Estimates Lisa DiCarlo, 01.24.05, 5:30 PM ET

Credit Card Industry Profits“The credit card industry is the most profitable one in the United States with annual earnings

in the $30 billion range.  Many people might be surprised to learn that a single credit card issuer - MBNA - earned 1.5 times more profit than McDonalds in 2004.  Citibank, another

major credit card issuer, earns more profit than both Microsoft and Walmart.”

Credit Card Industry Profits“The credit card industry is the most profitable one in the

United States with annual earnings in the $30 billion range.  Many people might be surprised to learn that a

single credit card issuer - MBNA - earned 1.5 times more profit than McDonalds in 2004.  Citibank, another major credit card issuer, earns more profit than both Microsoft

and Walmart.”

The Airlines’ Major Cost Centers

Four major components Fuel Labor Equipment Distribution

The first three are hard to control There is still room in Distribution to

save money, however

Airline Distribution Costs

Agency Commissions

GDS Fees

Credit Card Fees

Ticket Fulfillment

Reservations Support

Credit Card Distribution Costs

Credit Card Merchant Service Fees

– Expensive: 2-3%, on a € 5,000 ticket . . .

• GDS Fee: € 3-13

•Credit Card Fee: € 100-150

UATP “On-Us” transaction = 0% msfUATP “On-Us” transaction = 0% msf

The UATP Network

Airline-owned “global corporate travel payment network” founded in 1936 and owned by 19 world airlines; first charge card, all accounts begin with “1”

Tool to lower airline distribution costs by eliminating or reducing credit card fees

Mission: to provide the best air payment vehicle in the market while lowering airline distribution costs

UATP saves the airline industry approximately USD 200 million in credit card costs per annum

The UATP Network Operates Like Other Major Payment

Networks

IssuerAirline

TravelAgents

MerchantAirline

EstablishAccounts and

manage customer

AcceptForm of Paymentfor ticket sales

Authorisetransactions

Collect & pass data

Card Network

Issuer Merchant

UATP’s Role in the Distribution Process

Each step has costs . . .

AccessInformation

MakeReservation

MakePayment

ManageInformation

Issue Ticket

6 - 8% 2 - 3% 1 - 2% 1 - 2%2-3%

. . . and solutions

Self Booking Systems

GNEs

Travel Management systems

Electronic Ticketing

Lower Cost Cards

Direct Settlement

Alternate CRS

Direct Links

The UATP Ownership Group Shareholder Airlines

“If you have a UATP program, you should be growing it.

If you don’t have a UATP program,

you should ask ‘Why not?’”

-- Dave HilfmanSVP Continental AirlinesAirline Distribution 2003

San Francisco

ENJOY THE CONFERENCE!

Ralph A. KaiserPresident & CEO

Universal Air Travel Plan, Inc.+1-202-626-4222

ralph.kaiser@uatp.comuatp.com