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A MAGAZINE FOR AIRLINE EXECUTIVES

Ta k i n g

y o u r

a i r l i n e

APRIL 2003

t o

n e w

h e i g h t s

MAKING EVERY DOLLAR COUNT

A Conversation with . . . Brett Godfrey, CEO, Virgin Blue INSIDE New Approach to Cost Reduction Provides Benefits

Aeroflot Reshapes Itself

American Airlines De-Peaks Its Hub and Spoke Structure

w w w. s a b r e a i r l i n e s o l u t i o n s . c o m


regional

Achieve optimal operations

industry

contents

perspective with Tom Klein Group President, Sabre Airline Solutions During the past several months, I’ve

T a k i n g

y o u r

a i r l i n e

t o

n e w

2

h e i g h t s

APRIL 2003

10

A New Way of Looking at Cost Reduction A Conversation With Regional Express

Publisher

Sabre Airline Solutions 1 E. Kirkwood Blvd. Southlake, Texas 76092 www.sabreairlinesolutions.com

14 18

Editors

Stephani Hawkins Scott Hunt

22

Designer

More Than Just a Web Site Affordable Reservations for Low-Cost Airlines Hawaiian Airlines Automates Fares Management

8

Asia/Pacific Airlines Benefit from Integrated SOC

20 38

AeroMexico Puts M&E Strategy into Practice

44

Locally Based Experts Assist EMEA Airlines

48

Aeroflot – Russian Airlines Reshapes Itself

LaDena Allen, Kay Alig, Peter Berdy, David Bornemann, Steve Clampett, Lori Courtney, Cameron Curtis, Alan Dicker, Mike Douglass, Adam Foster, Caro Goewert, Gretchen Greene, Sharon Hall, Kathryn Hayden, Darren Henley, Walter Jacobs, Billie Jones, Keith Knox, Robert Marley, Gianni Marostica, Matt McLellan, Kris Oliver, Heather Parham, Russ Perkins, Michelle Porter, Jim Quilty, Murali Ramdas, Dave Roberts, Mark Shearer, Daniel Toporek, Renzo Vaccari, Carla Warren and Bruce Wong.

reliable

26 32 34

40

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consistent — we have improved our cost structure but we have much, much more to do. management don’t easily sync up with investing. Determining how to invest in challenging economic times certainly is a tough question, but airlines have shown that continuing to invest in their

Integrated OCC Helps Propel WestJet New Reservations Systems … Convert With Minimum Disruption American Airlines De-Peaks Its Hub and Spoke Structure Returning Network Carriers to Profitability

Retiring inefficient aircraft early may drive upfront costs, but the return on investment is often

If you have questions about this publication or suggested topics for future articles, please send an e-mail to wearelistening@sabre.com. Why do more than 200 airlines around the world choose Sabre Airline Solutions as their technology partner? Because they rely on us to deliver hard-hitting, real-world answers to operational challenges and decision-support needs. Times like these demand fresh thinking. Proven, ROI-based solutions. And a technology partner that can not only see the future, but can help you reach it. Times like these demand Sabre Airline Solutions. www.sabreairlinesolutions.com

compelling. The cost of changing a business process, such as de-peaking a hub, can be justified by the ultimate savings. The purchase of a decision-support system can be more than offset by the savings the system generates. Historically, airlines have invested in informa-

6

Robust Scheduling Helps With Irregular Operations

tion technology, providing the foundation to drive business change and improvement. The overriding concern today is ensuring that the money invested now will generate a swift return on investment.

16 24

Reader Inquiries

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. ©2003 Sabre Inc. All rights reserved. Printed in the USA.

the theme of conversations with executives was

operations now can save money — often quickly.

Sabre Holdings

Contributors

world. It’s no surprise that

Resource management, cost cuts and cash

A Conversation With Virgin Blue

Web Services Holds Promise for Airlines

In this issue of Ascend we have chosen to explore

New Direct Connect Availability Lowers Distribution Costs

and a quick return.

ideas and practices that target both a compelling A rapid ROI has never been more important. Continued investment in key areas such as simplifying operations, streamlining procedures

products

Shari Stiborek

visit with many airline executives around the

ATA Gets the Most for Its Investments

Yvette Hunt Print Manager

had the opportunity to

and upgrading information technology can truly pay off and can produce short-term and long-term benefits. I hope you enjoy this issue, and I look forward to visiting with you again in the third quarter.

12

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Automated Tool Manages Compensation Programs Cost Savings by Automating All In-Flight Services

april 2003

1


industry

industry

The Tactical Approach A New Way of Looking at Cost Reduction Can Pay Huge Dividends Shane Batt | Ascend Contributor With a global reduction in demand

costs can be negotiated downward, but

the characteristics of a particular

costs are related to per-flight expenditure,

not without significant and often very

phenomena from a tactical point of view.

and the remaining 20 percent of variable

difficult negotiations. Customer services

During the second step of the process,

costs are related to per-passenger costs.

can be reduced, but this often has a

the data is analyzed to identify trends

Per-flight costs include the largest

negative revenue impact as demand

and impacts. This step is followed by

percentage of fuel costs, crew overtime,

declines and customer dissatisfaction

the development of remedial actions

maintenance, navigation and landing fees,

increases. Nearly all of the large cost

specifically designed to deal with the

among other costs. The per-passenger

drivers of the airline business resist the

tactical characteristics of the issue. Finally,

costs include catering, fuel costs, some

holistic approach to reduction.

in the last step, compliance with the

passenger handling costs and a few other

On the surface, staff reductions

remedial actions is checked. This process

related costs. This expenditure tree

this particular issue. This normally

supply issues can result in higher costs

seem the only resort to produce sizeable

is a cycle, because data collection begins

demonstrates a fundamental principal

for air travel and the continued over-

results in a task force being created to

for fuel virtually overnight.

cost reductions. This is the reason that

again resulting in different analyses

about the airline industry — most of the

capacity of the marketplace, airlines seek

address cost reductions in a strategic

so many airlines have recently resorted

followed by different remedial actions

costs of an airline have nothing to do

to reduce costs. Indeed, cost reduction has

manner. This holistic method generally

“hedged” using strategies that essen-

to layoffs in order to control costs. The

and new compliance. This is a purely

with passengers being carried. As shown

always been an important goal, but recent

only produces limited positive results.

tially pay a negotiated fixed fee to a

standard process is that the airline re-

tactical approach to cost control, and it

in the expenditure tree, only 7 percent

economic conditions have increased its

For example, fuel is one of an

supplier for a period of time, regardless

engineers its processes in order to

may not produce huge results in the

of a typical airline’s total operating costs

Similarly, fuel purchasing can be

importance. In order to perform cost

airline’s highest costs — if not the highest.

of the price of fuel. This often reduces

remove inefficiencies and introduces

first implementation. But consistent

are related to passengers. This is a

reduction, most carriers look toward the

Fuel costs, however, are difficult to

the variability of fuel costs, but does not

productivity improvements that lead

application of this cycle produces short-,

strength and a weakness of the industry.

major cost drivers of their business:

contain because they vary with world-

necessarily reduce them. Some carriers,

to the ability to reduce staff. A great

medium- and long-term successful cost

Fuel,

wide supply and demand for petroleum.

such as Southwest Airlines, produced

many airlines are performing this exact

reduction. Before examining a specific

that incremental revenues, driven by

Staff,

One way of reducing fuel costs is to

tremendous results based upon fuel

exercise today. This process is not

example, first consider the way costs

successfully competing, essentially come

Maintenance and engineering,

reduce flying, of course. This option,

hedging contracts in the wake of rising

simple, however, when considering the

are split for most airlines.

at no additional costs and therefore con-

Aircraft ownership or leases,

however, also has a profound impact on

fuel prices following Sept. 11, 2001.

human impact. Airlines typically perform

Customer service.

revenues. Fuel costs can be contained in

Other carriers, however, have actually

staff reduction as a last resort — and

Together, these primary costs are

tribute substantially to the profitability of

Expenditure Tree

increased costs with fuel hedging

rightly so. Staff reductions hurt morale,

to consumption and cost reductions

activities. If fuel prices are predicted

have a tendency to reduce productivity

tree shows costs

all operating costs of an airline. They also

due to purchasing. Flight operations

to increase due to global political

and often spawn labor actions.

split for a traditional

highlight the difficulty of reducing costs

departments attempt to cut fuel

conditions — such as war in the Middle

for most carriers, because none of these

consumption. Adjusting flap settings,

East or local strikes in Venezuela

costs are easily reduced by themselves.

reducing power settings, performing

during December and January —

FUEL

130 250

STAFF

90 AIRCRAFT M&E

150 210

SERVICE OTHER

Typical cost breakdown of a US$1 billion airline (values in $ millions)

older and existed

the price of hedging increases and

are virtually impossible at airlines, but

during a regulated

and avoiding the use of

produces a real risk if the airline enters

this is far from the case. To reduce and

period of the industry.

Indirect Costs 30%

Total Operating Costs 100%

Fixed Costs

Direct Costs 70%

50%, (35%) Flight Costs

Variable Costs

80%, (28%)

50%, (35%)

Passenger Costs

full reverse thrust upon

into these types of agreements. So,

control costs, airlines must take a tactical

When considering total operating

landing can all reduce

fuel costs savings are hard to produce

approach to understanding what is

costs, these airlines have a high

fuel consumption —

and are even difficult to contain. If

controllable and then take effective

percentage of indirect costs — 30 per-

but not by much. If an

an airline executive attempts to use

action. The tactical cost reduction

cent. Traditionally, these costs are con-

demand for passenger travel declines,

airline has never imple-

the holistic approach to fuel cost

process is a cycle:

sidered overhead because they are not

this reduction in revenue is not matched

mented cost-control

reduction, the results will most likely Data Collection

be disappointing.

airline might gain some

Each of the other major costs

real savings in this area

presents its own unique difficulty when

with a concerted holis-

it comes to cost control. Airlines can

tic effort. Most carriers,

reduce maintenance and engineering

however, exhausted

costs, for example, by introducing

None of the primary costs are easily

most of the “low-hanging fruit” from

new purchasing control practices.

reduced because ordinarily managers try

fuel reductions long ago, and there is

This approach, however, can lead to

to contain the costs “holistically.” That

little more to gain from holistic cost

problems with on-time performance

is, airline managers examine a major cost

exercises. In addition, the rise of fuel

during periods of unusual or irregular

driver and dedicate resources to solve

prices due to global political or local

operations. Aircraft ownership or lease

2 ascend

these airlines are

single-engine taxiing

activities for fuel, the

170

airline. Typically, It may appear that cost reductions

the airline. But it is a weakness because as

The expenditure

two primary ways: cost reductions due

responsible for more than 85 percent of

Tactical Cost Reduction

This is a strength because it means

Compliance

Analysis

Remedial Actions

allocated to the direct costs of the

by a corresponding reduction in costs

airline. But these costs are not

from flying fewer passengers. This is

purely overhead. Of the 70 percent

the reason that so many carriers are

of the total operating costs that are

struggling today with profitability. This

associated with direct costs, about

is why a tactical expenditure control is

half of the direct costs are fixed

more effective than a holistic method.

and the other half are variable. The fixed costs include aircraft

Tactical Cost-reduction Cycle

payments, crew salaries, other operating staff salaries and other

The process begins with data collection, where the carrier investigates

20%, (7%)

An Example of Tactical Cost Control On-time performance has a big

costs that are fixed for the operation.

influence on an airline’s profitability

Finally, about 80 percent of all variable

(continued on next page)

april 2003

3


industry

industry

and can be controlled tactically. Most

Since most crew contracts stipulate that

per year. This is a fairly modest expense

marked for improvement through

Standards and procedures creation —

Staff planning and deployment —

carriers understand the basic flight- and

crewmembers are paid the maximum of

and certainly within the parameters

the next type of analysis.

specific standards and procedures

addressing the impact of improving

passenger-related costs of OTP problems.

the rostered duty period or the worked

for what is accepted as industry aver-

Prescriptive analysis — an approach

were identified from the prescriptive

rostering and planning to reduce

Delays or cancellations increase passen-

duty period, the airline’s fixed costs of

age, but it seemed as though the OTP

is developed for each normatively

analysis and documented.

total costs,

ger costs because passengers must be

crew salary increase because the crew-

performance of the carrier was lower

negative item in order to improve to

Training — the impacted staff were

Crew planning and control —

provided meals, hotel accommodations,

member is not performing up to the

than what the relatively modest

the level of performance required.

trained in all procedures and practices.

addressing pairing creation, roster

incidental expenses and also must be

rostered level. If OTP is a long-term

expense (1.8 percent) would indicate.

Implementation — once the staff was

creation, crew control and day-of-

re-accommodated on other flights.

problem for an airline, then the crew

Sabre Consulting worked with the

were two fold. First, it was determined

fully trained, the procedures were

operations management to reduce

Most of these costs are relatively easy

contingent for the airline is often larger

carrier, employing the tactical cost

that the total impact of OTP problems

implemented.

total costs,

to account for and are charged within

than what would be necessary to oper-

reduction process to examine the

on the carrier was approximately

the passenger costs on the expenditure

ate if the carrier were performing accord-

issue in more detail.

US$88 million instead of the originally

the remedial action phase of implemen-

addressing the cost drivers for

tree. Similarly, when airlines are charged

ing to the schedule. In the same way that

estimated US$18 million. This extra

tation. Once this work is completed,

handling passengers in order to

penalties for late arrival at airports —

OTP issues increase crew salary fixed

client’s own staff and Sabre Consulting’s

impact was identified in the fixed and

however, a process of compliance check-

reduce costs while maintaining

such as missing slots, crew working

costs, OTP problems have a similar

specialists began a process of data

indirect portions of the expenditure tree.

ing will be put in place to ensure that

or improving service levels.

overtime due to delays and consuming

impact on fixed maintenance costs,

collection. The inter-disciplinary team

Obviously, simply recognizing this larger

the remedial actions are fully assimilated.

extra fuel for auxiliary power unit/ground

aircraft costs and even indirect costs.

included resources from flight operations,

level of cost impact does not recover

First, a team constructed from the

The results of the analysis phase

This particular carrier is currently in

Service cost containment —

All of these areas seem to be

The tactical cost reduction model

secondary or related areas to the

When delays occur and passengers

operations control, airport operations,

the costs, but it certainly points to the

was successful for this particular carrier,

overall issue of cost reduction,

costs are neatly accounted for in the

become more demanding, carriers often

finance, maintenance and engineering,

fact that work in the OTP area should

as well as for many other airlines.

but this is exactly the reason why

flight costs on the expenditure tree. To

endorse tickets over to other airlines to

marketing, and outstation management.

be exerted. Second, the prescriptive

This approach ensures that the tactical

tactical cost reduction works so

control OTP costs, most airlines concen-

carry delayed passengers. This provides

The team looked at the characteristics

analysis identified more than 80 specific

drivers of the costs are addressed, and

well for many carriers. The basic

trate on the easily identified passenger-

good customer service, but has a sub-

of the carrier that might be impacted

tactical actions that could be taken to

this tends to reduce or eliminate the

inter-related nature of the airline

and flight-cost characteristics of the OTP

stantial impact on

improve on-time performance.

strategic drivers of the costs.

operation means that these tactical

problem. These costs are 15 percent to

indirect costs.

20 percent of the total OTP impacted

When the passen-

costs for the typical airline. The largest

ger is endorsed

portion of the costs associated with OTP

to another carrier,

are hidden from view and can only be

the lost revenue

uncovered with a tactical approach.

is accounted for

power unit burns due to delays — these

by low on-time per-

“are virtually impossible at airlines,

It may appear that cost reductions

but this is far from the case.

formance. All stones

After the analysis phase, the remedial

The tactical cost reduction approach

issues have a large impact on total

were turned over in

action phase was started. The combined

works well for other tactical implemen-

order to investigate

team used a multiple-step process in

tation issues besides OTP. This method

the characteristics

order to take corrective actions:

has been used successfully to address

experienced limited success with

airline cost areas including:

holistic cost reduction on the major

operating costs. Because so many carriers have

of the OTP issues at

Empowerment — the inter-disciplinary

the carrier. This data

team was organized to implement

Maintenance and engineering

cost drivers, maybe it is time to try tactical cost reduction methods.

as increased indirect costs. The other

collection was performed in only four

the recommendations from the

dispatch reliability — addressing

OTP problems impact fixed costs and

carrier lifts the coupon of the delayed

weeks, but time was spent to collect

prescriptive analysis and tasked

the impact of improving dispatch

Shane Batt is a partner

some impact indirect costs. For example,

passenger and charges the ticketing

historical performance information

with reporting progress frequently.

reliability on total cost reduction,

in Sabre Airline Solutions Consulting

when delays occur, crewmembers may

airline through the International Air

(operational and financial) and also to

not be able to complete their duty day

Transport Association clearinghouse.

perform interviews in the different areas.

without being illegal due to the total

These clearinghouse charges are gener-

duty time spent for that day. This can

ally applied to indirect costs if they are

combined team performed a standard

happen when a crewmember has four

not netted from revenues. The result

process of analysis including three

News Briefs from Around the Globe

hours left in his or her duty day with

is that indirect costs increase due

specific steps:

News from Asia

a three-hour upcoming flight that is

to OTP issues.

Some of the costs associated with

T H E

Following data collection, the

Comparison analysis — the particular

Air China will add the Sabre ® AirFlite ™ SlotManager ™

vıew

H I G H

L E V E L

“We are now a large player in the industry, and we

require superior solutions that enable the recent merger

delayed two hours. Since completion of

The OTP problems cause increases

data collected in the first phase is

system to its flight scheduling department, further

to move forward as smoothly as possible,” said Li.

the delayed flight would result in the duty

in variable costs (flight- and passenger-

compared to several benchmarks

advancing the airline’s scheduling capabilities.

“Sabre Airline Solutions has been able to offer these

day extending by at least five hours (two

related costs), fixed costs (crew salaries,

including historical performance, com-

hours of delay plus three hours of flight),

maintenance and aircraft unit costs) and

petitor performance, industry best

and CNAC Zhejiang, Air China, which also utilizes the

the crewmember is relieved and another

indirect costs. The largest bulk of the

practices, budgets and expectations.

Sabre

crewmember is called from stand-by or

costs are hidden in the fixed and indi-

Normative analysis — the comparisons

aircraft operating on more than 300 routes.

reserve to handle the remaining flight,

rect costs. A recent Sabre Airline

and characteristics are mapped on a

resulting in a disruption of the crew

Solutions client had this exact problem.

graph where the horizontal axis meas-

planning and scheduling for Air China, the advanced

the market, including Sabre ® AirOps ™ Movement

roster. This disruption might impact

This particular carrier has approxi-

ures financial impact and the vertical

flight scheduling systems will enable the airline to

Control, Sabre ® AirOps™ Flight Planning, the Sabre ®

the roster for several days if it occurs

mately US$1 billion in total costs with

axis measures operational impact.

generate the company wide fleet schedule quickly and

AirCrews ™ crew management system and Sabre ®

in the first day of a multiple-day pairing.

OTP costs estimated at US$18 million

The areas that are negative are

more efficiently.

AirOps ™ Load Planning.

4 ascend

Following its merger with China Southwest Airlines ®

AirFlite ™

Schedule Manager, has a total of 118

According to Li Zeng De, deputy director of

solutions to us while also providing support functions that help schedule evaluation and optimization.” This contract follows the implementation of a range of software from Sabre Airline Solutions that China Southern Airlines uses to meet its objectives in

april 2003

5


Sabre Holdings

Sabre Holdings Back to the Future

At Georgia Tech, researchers have been

Proactive planning — enhances

developing a simulation-based environ-

the underlying schedule to incor-

incorporates upstream and downstream

ment that will enable schedule evalua-

porate more operational issues

data to develop a more realistic final

tion that incorporates schedule recovery

(aircraft routing, crew pairing,

result. It utilizes a metric that depends on

procedures. To date, these partners have

ground resources) into the

observable events, such as delays, can-

observed some encouraging results that

strategic planning process.

cellations and other downstream effects

will be incorporated into the Sabre

Reactive planning — incorporates

in the airline network. The advantage of

Airline Solutions product portfolio

historical operational data to develop

this method is that robustness can be

in due course.

new flight schedules that will be

Robust scheduling, on the other hand,

Expecting the Unexpected Robust Scheduling Helps Airlines Cope with Irregular Operations By Michael D. Clarke and Dirk P. Guenther | Ascend Contributors

Although the goal is in sight, there’s When things go as planned, an

resulting in undesirable operational

consider multiple operational issues at

airline’s schedule theoretically delivers

consequences. In addition, it’s difficult

each stage of the planning process has

the optimum results. Unfortunately,

for an airline to maintain an on-time

been considered unsolvable, limited by

things rarely — if ever — go according

flight schedule due to inherent opera-

the available computer resources and

to plan.

tional factors in its network that are not

modeling techniques. However, recent

explicitly incorporated into the schedule

advances in these fields have led

design and network planning process.

researchers to pursue concepts of robust

An airline’s ability to maintain its flight schedule during irregular operations such as adverse weather

A more robust schedule design

goal of robust planning is “ The to maximize the airline’s actual operational profit by anticipat-

ing schedule disruptions . . .

still work to be done to perfect robust scheduling. In general, projected schedule

less susceptible to disruptions and time variations. Ultimately, the benefits of robust

profitability and schedule robustness are

schedule planning will necessitate

conflicting objectives. A prime objective

that a prescribed level of profitability

of robust planning, then, is to find a fair

is preserved during the planning

trade off between planned profitability

process. Within these bounds, robust

and robustness. A major challenge in

scheduling initiatives will enable airlines to produce better schedules that are

schedule planning and hybrid airline

measured in concrete terms, such as the

this area is to quantify the value of

conditions, mechanical disruptions or

builds in the needed flexibility to account

schedule planning — such as combining

number of flight delays, misconnected

robustness improvements, that is the

less susceptible to irregular operations

an air traffic control failure could be

for the unexpected. The goal of robust

aircraft fleet assignment and crew

passengers and flight cancellations.

costs of schedule disruptions. Two other

while still delivering on the desired

scheduling.

Such an approach is the basis of the

factors that are important for the success

profitability. The research challenge

Sabre

The Way We Were Currently, schedules are created

AirFlite ™

Reliability Manager.

During the next year, Sabre

of robust planning are operational

Research will work with its research

considerations and

with little or no feedback from the

partners and corresponding product

schedule flexibility.

operations department of an airline.

development groups to incorporate

Such feedback, however, is crucial to

robust scheduling principles in the Sabre

determine the level

identify risk factors for schedule

Airline Solutions product portfolio. In

of schedule robust-

disruptions and to better model

addition, Sabre Research will develop a

ness requires an

operational constraints. Similarly, it is

comprehensive schedule evaluation tool

effective evaluation

important to keep schedules flexible

to better assist airlines during the sched-

tool or environ-

so that changes later in the planning

ule planning process, ultimately helping

ment that is easy

process or during operations can be

increase profitability.

to operate and

incorporated more easily. The schedule planning process has Through robust scheduling, analysts build in the flexibility to account for unexpected circumstances, such as adverse weather.

®

Since 2000, Sabre Research has

The ability to

uses standard

been closely working with researchers

airline-industry

been traditionally subdivided into

at the University of Illinois at Urbana-

data formats.

several discrete decision phases based

Champaign, Massachusetts Institute

In addition, the

on the pre-existing functional divisions

of Technology International Center

tool should allow

significantly improved if the overall

planning is to maximize the airline’s

within the airline such as schedule

for Air Transportation and the Georgia

schedule evalua-

schedule planning process incorporated

actual operational profit by anticipating

generation, capacity planning, aircraft

Institute of Technology on robust sched-

tion under regular

a higher level of robustness.

schedule disruptions — the counterpoint

maintenance routing and crew planning.

uling projects. At UIUC, researchers are

and irregular

to traditional scheduling, which

This sequential approach to schedule

investigating the benefits of incorporating

airline operations

a precise, highly regimented sequence

attempts to develop a perfect schedule

planning has resulted in each airline

move-up crew opportunities during the

and incorporate

of events that can be easily thwarted

that would deliver the highest return as

group narrowly focusing on its own

crew schedule planning process. MIT

efficient recovery procedures during the

that lies ahead is figuring out which new

when unexpected events occur. These

long as nothing goes wrong.

objectives rather than taking into

Current airline schedules reflect

schedules contain little, if any, flexibility

Although the desirability of robust

By accounting for unexpected events, robust scheduling minimizes the effects on the traveler.

is examining ways to design flight and

evaluation process. Sabre Research’s

planning concepts will add the most

account the overall schedule. Additionally,

operational schedules that are less

work on schedule robustness has

robustness to airline schedules.

to effectively adjust to changing circum-

scheduling has long been acknowledged,

there is very little interaction between

susceptible to disruptions and have

identified two distinct approaches for

stances. As a result, flight and crew

until now, implementing it has proven

the departments, which dilutes the

the ability to be easily downsized in the

incorporating robustness: proactive

schedules are prone to disruptions

illusive. The ability to simultaneously

integrity of the final flight schedule.

event that an irregularity actually occurs.

planning and reactive planning.

6 ascend

Michael D. Clarke and Dirk P. Guenther are research and development leads in Sabre Research.

april 2003

7


regional

regional Asia/Pacific

Tying it Together

Today many airlines still manually inte-

During the next two years, the company

Real-time notification of events —

grate airline information from various

will invest more than US$5 million

rather than relying on SOC personnel

host-processing systems to optimize

to enhance its current SOC software

to frequently check every system to

schedule recovery.

solution to provide seamless access to

determine if an event has occurred,

the core functions

the SOC system will utilize publish/

of flight planning,

subscribe technology to automatically

dispatch, move-

alert any affected personnel when

ment control and

a disruption occurs. This will reduce

load planning.

the time needed to get the operation

These core func-

back on track and avoid additional

and control of airline operations as well as

tions will be com-

problems.

ensures the legality of flight operations.

bined into one

Automated schedule recovery —

Asia/Pacific Airlines Reap Benefits of an Integrated SOC By Hans Belle and Apurva Mathur | Ascend Contributors Integrating operational areas into a system operations control center has

than US$3.2 million. Virgin Blue views an integrated SOC

generated enormous benefits for many

as an important resource in keeping its

airlines in the Asia/Pacific region. China

foothold in the marketplace.

Air, China Southern and Virgin Blue are

“Virgin Blue’s aim of a fully inte-

Not only should the departments be

solution utilizing

during crucial periods of irregular

integrated, but the tools they use should

a common data-

operations, integration of infor-

be as well.

base and a graphi-

mation from various host-processing

cal user interface

systems will be fully automated and

and navigation

shared among systems, allowing

with the same

the airline to respond faster than

look and feel.

ever before.

among airlines in the region that have

grated SOC is to remain competitive on

developed an integrated SOC.

the routes we already operate and, of

to have a real grasp of what’s going on

course, on any future routes,” said Nick

in the airline’s operation by allowing

Brant, Virgin Blue’s head of information

them to see what’s happening in other

technology. “We also required a system

areas such as movement control and

that was able to maintain tight cost

maintenance.

“solution-based . . .

Our staff is more proactive and

control and operational integrity simultaneously.”

Integrating systems has allowed the

Two of the other leading carriers in

System integration enables analysts An integrated SOC enables analysts to make informed flightrelated decisions.

The SOC system integrates a variety of advanced Sabre Airline Solutions tech-

Once completed, this system will offer even more benefits, including:

nologies, including the Sabre ® AirFlite ™

A single point of access for all critical

must purchase, configure and maintain

Schedule Manager, the Sabre ® AirFlite ™

information — no longer will SOC

several hardware platforms with various

SlotManager ™ system, Sabre ® AirOps ™

personnel need to sign onto different

A lack of integration means airlines

For Virgin Blue, China Southern, China Air, Cathay Pacific and Air New

don’t lie. The SOC sys“ Numbers tem is worth its weight in gold . . .

three airlines to manage their overall

the region — Cathay Pacific Airways and

system software. Data, in many cases,

Movement Control, Sabre ® AirOps™

systems to get the critical data they

flight operations — including flight

Air New Zealand — have long benefited

must be entered multiple times and in

Flight Planning, Sabre ® AirOps™ Load

need to make real-time decisions.

scheduling, flight planning, dispatch,

from having an integrated SOC.

multiple formats when using different

Planning, and the Sabre ® AirCrews ™

A single-technology platform —

Zealand, an integrated SOC represents

databases.

crew management system.

airlines will be relieved of the costs

a key method of maximizing their

weight and balance, and crew manage-

By integrating its products, Air New

“Movement Control is a vital part of

ment — while increasing efficiency and

Zealand has developed

associated with maintaining multiple

investments and improving the overall

realizing considerable cost savings.

“a new way of manag-

our SOC at Air New Zealand,” Morgan

hardware platforms and software

efficiency of their organizations.

China Southern, for example, recently

ing processes using

said. “We rely on it to track and assign

systems.

attributed nearly US$8 million in

dynamic technology,”

our check maintenance, and with effec-

Single data entry points — instead

of marketing, Asia/Pacific for

benefits to its new SOC.

said Eric Morgan, vice

tive use of Movement Control, we can

of entering operational information

Sabre Travel Network and

president of network

realize substantial savings of

multiple times in multiple systems,

Sabre Airline Solutions.

Hua, chief pilot, China Southern Airlines.

logistics at Air New

approximately US$4 million.”

all data entered into the SOC system

“The SOC system is worth its weight in

Zealand.

“Numbers don’t lie,” said Hao Jian

gold and has played a significant role in

“Our staff is more

guaranteeing flight safety and operation

proactive and solution-

control for our airline and our valued

based,” Morgan said.

passengers.” The SOC system has helped China

The Asia/Pacific airlines have found

Sabre Airline Solutions continues to advance its suite of SOC products.

Bringing together the various flight operations areas into an integrated SOC allows an airline to better manage its overall flight operations.

Southern make 1,623 flight adjustments

that an SOC offers an

resulting in a profit of US$3.8 million.

enhanced operational

The SOC’s computerized flight planning

control environment making available

Integration is particularly crucial

has saved 2,368 tons of jet fuel, worth

information with a common situational

more than US$800,000. And the SOC

awareness with which to make informed

has taken advantage of price differences

flight-related decisions. By integrating

and planned for the loading of 28,860

the various operations departments, the

tons of fuel in Hong Kong, worth more

SOC provides minute-to-minute guidance

quickly and cost effectively as possible.

8 ascend

will be immediately available to all departments.

Hans Belle is vice president

Apurva Mathur is director of flight operations products for Sabre Airline Solutions.

+count it up 1986 — Year the airline industry’s 3,000+ — Number of members

200 — Number of US Airways

first automated revenue management

on the development team that supports

systems that were shut down and

during periods of irregular or off-schedule

system was developed and installed

Sabre Airline Solutions, leveraging

shifted to Sabre Airline Solutions

operations when the SOC must assess

by Sabre Airline Solutions

research, technology and architecture

systems in 1998, representing the

the deviation of the airline’s operation

direction to deliver cost-effective,

largest system migration in the

and return it to its published schedule as

best-of-breed airline solutions

airline industry’s history

april 2003

9


industry

industry Hans Van Pelt, chief information

Webmasters — Making the Internet Work A Conversation with … Hans Van Pelt, CIO Regional Express Many airlines in today’s market are

own Web site to:

For carriers seeking to address

meaning our efforts can be directed at

that as a regional operator we still

officer of Regional Express, discussed

growing the channel and improving

need to be seen to have a comparative solution and service to trunk operators.

the benefits of the Web Sales Engine

visitor sales conversion.

for Regional Express.

Q: What influence did the existing

QUESTION: As a regional airline,

technology of Hazelton and Kendell

how important is the Internet for both

Airlines (the two Ansett regional

marketing Regional Express to your

subsidiaries merged to create Regional

customers and enabling them to make

Express) have on your decision to

reservations?

select the Web Sales Engine?

ANSWER: Very important. It’s one

A: The existing services were

our efforts can be directed at

of three sales channels, and with the

inconsequential. We were in a position

growing the channel and improv-

online airline ticket market in Australia

where we needed to choose a new

being very mature, it is a channel we

product designed to maximize revenue

ing visitor sales conversion.

we now have an online book“.ing. . service that we need to spend little time maintaining, meaning

using the Internet to achieve similar

Offer an advanced Web-based

distribution needs in multiple domestic

cannot afford to be without.

from the online channel. Maintaining

goals: secure bookings, create customer

reservations system,

or international market segments, the

Q: How has the easy integration func-

previous solutions would not have

Q: What role does such technology

loyalty and reduce costs. The power and

Market distressed inventory,

solution’s “super site” structure provides

tion of the Web Sales Engine allowed

achieved the results we report today.

play in helping you streamline and

reach of the Internet, combined with

Offer extensive trip planning and

the ability to rapidly duplicate and develop

Regional Express to further harness the

Q: What competitive advantage does

simplify your operations?

subsites that are segment-

power of Internet bookings and trip

the Web Sales Engine give Regional

A: The Web Sales Engine is part of

or market-specific.

planning?

Express over other regional carriers in

our sales channel mix and enables us

This unique feature

A: Our implementation of the Web

the Australian market?

to operate the online channel without

significantly increases an

Sales Engine was on time, and it is

A: It’s a simple, effective and

the complexity that can be tied to

airline’s revenue opportu-

easily managed using the back-end

customer-friendly booking engine that

some online trading initiatives. To that

nity by providing the

maintenance tool. Essentially, we now

is as good as anything in the Australian

end, it allows us more time to focus

ability to cost-effectively

have an online booking service that we

market. Our competitors on routes are

on marketing the channel, rather than

drive bookings across

need to spend little time maintaining,

either Qantas or Virgin Blue, meaning

operating the channel.

multiple segments and markets, thereby maximizing revenue opportunities with minimal investment.

hightech

Australia’s newest

News on New and Improved Products and Services from Sabre Airline Solutions

regional carrier, Regional Express, is just one of many airlines reaping the benefits of the Web Sales

product

market quickly with a new, powerful,

complete the booking transaction by

Engine. Formed last

Sabre Web Sales Engine, powered by GetThere

online distribution channel.

purchasing seats. Passengers can use

August by the merger of

Regional Express, Australia’s newest regional airline, attracts customers utilizing a Web-based booking engine.

two regional subsidiaries of the collapsed Ansett Australia, the carrier

®

description

proven technology, can provide carriers

procurement capabilities,

adopted the Web Sales Engine to

A powerful online reservations system

worldwide with flexibility, responsiveness

Easily target specific customer segments,

complement its traditional customer

for an airline’s Internet site.

and the ability to better market and

Offer powerful customer self-service

service techniques. The engine’s

distribute their product.

features.

flexible architecture is designed for

benefits

GetThere’s low-fare search, which

features

returns alternate, less-expensive itin-

Integrates easily and seamlessly —

eraries and exclusive Web-only fares

a flexible architecture enables the

promoted by the airline.

tool to “plug in,” allowing an airline

Uses innovative and proven

to enhance its Web presence with

solutions — an airline can promote

a customized look and feel that com-

fares only available online, create

plements its brand.

new sites quickly and easily, and

easy integration with public-facing

The engine targets multiple

Provides convenient tools for end

review regular reporting statistics.

Sales Engine, powered by GetThere, can

reduce inventory distribution costs and

Web sites — the product simply plugged

channels, sells distressed inventory

users — travelers can log in or shop

The flexible functionality also

harness the Internet’s power and reach,

enable carriers to immediately promote

in to the airline’s Web site — enabling

and directly reaches valued customers.

as a guest; search by schedule or

includes options for accommodating

helping airlines gain a competitive edge.

specific fare types in a dynamic fashion

Regional Express to keep its customized

It also helps reduce inventory distribu-

price; choose preferences for seats

partner airlines, car rental companies

Such tools enable carriers to use their

via the airline’s Web site.

look and feel.

tion costs and allows airlines to get to

and special meals; and easily

and hotels.

Solutions, such as the Sabre Web ®

10 ascend

In addition, the Web tool can also

april 2003

11


product

product close-end departure fares.

Automated Tool Helps Manage Complex Compensation Programs By Erin Buth | Ascend Contributor Airlines are focusing on controlling

compensation amount is applied to air

deployment of airline distribution

ately implement new policies. The

strategies, the Compensation Manager

create a wide field for distribution

flexibility delivered by the comprehensive

is the optimal solution, and it stands

strategy and compensation perform-

number of commission-targeting criteria

alone in the marketplace as the most

ance. The auditing function of the

gives airlines the ability to apply

advanced tool for airlines to use to

Compensation Manager easily handles

commission policies however they wish.

help manage their distribution

Commissions on high-yield fares

Distribution Simplified

the marketplace or create and immedi-

the most complex payment structures.

Several airlines around the world

Additionally, it enables airlines to remain

currently utilize the tool to manage their

nimble so they can react to changes in

travel agency programs. For immediate

objectives. Erin Buth is a sales marketing manager for Sabre Travel Network.

The tool, which requires no new

vıew

distribution costs as part of an overall

tickets when the ticket is issued, enables

hardware or software, also helps airlines

strategy to operate as economically as

airlines to manage precise compensation

automate, centralize and better manage

possible.

policies and ensure compliance on every

all compensation policies, including

ticket. When errors in the compensation

bonus and override agreements. The

bookings today are distributed through

rate are made, recovering the money

Compensation Manager enables airlines

travel agencies, airlines are focusing on

can be a cumbersome

administering agency compensation

process. The Compensation

passenger revenue accounting system. PIA, based in

iris recognition identification, has the reciprocal ability

more efficiently and effectively to ensure

Manager makes it impossible

Karachi, Pakistan, is the eighth airline to select the

to offer the Sabre ® Aerodynamic Traveler ™ passenger

every aspect of distribution costs are

to override the

Quasar system.

processing solutions and other Sabre Airline Solutions

properly managed.

compensation amount.

Since more than 70 percent of

T H E

H I G H

News Briefs from Around the Globe News from Asia

L E V E L

customers. EyeTicket, a Virginia-based developer of

Pakistan International Airlines selected the

Quasar ™

The Quasar system processes airline ticket

high-volume public processing and access control using

products to its customers.

Studies have shown

transactions for accurate and timely recognition of

JetStream is an iris-recognition-based service that

in some cases eliminated, commissions

that carriers can reduce their

earned revenue. The system enables PIA to reduce

positively identifies travelers, simplifies and expedites

paid to travel agents, many still maintain

commission expense on

costs, increase revenue and analyze detailed marketing

transactions, and provides maximum security and risk

performance-based agreements with

average by 15 percent and

data to enhance its competitive position. The system

management at a competitive cost. After a quick one-

agencies and rely on them to apply the

by as much as 46 percent

is available as an application service provider solution

time enrollment, customers can check-in and board the

correct compensation amount.

through the use of the

under the Sabre

Compensation Manager.

network solutions, or it can be installed on site.

Although airlines have cut back, and

Airline commission policies are complex, varying by geographic area, point of sale and type of distribution. Keeping track of these various

The Compensation

“enables airlines to remain nimble so they may react to changes in

connection and provides

Web-enabled and dedicated

with Sabre Airline Solutions and have been successfully

taneous introduction of a unique and secure Internet

[the Compensation Manager ]

eMergo ™

“We have maintained a long-term IT partnership

Manager allows instancompensation changes via

®

The Compensation Manager helps airlines automate, centralize and better manage all compensation policies, ensuring that the correct and appropriate amount is applied to air tickets when the ticket is issued.

aircraft, check bags, or clear passport control simply by looking into a video camera for a couple of seconds. The transactions are easy, fast and secure. The Aerodynamic Traveler solutions provide

using a number of its solutions,” said Kaleem Malik,

passenger processing tools designed to increase agent

chief financial officer at PIA. “The combination of Sabre

mobility, improve airport efficiency and maximize airline

Airline Solutions’ reputation as a software supplier and

customer satisfaction by providing the highest level of

the Quasar system’s functionality were key factors in

service to passengers at the lowest possible cost. “EyeTicket is very pleased to team with Sabre

many benefits to airlines

our decision process. We believe the Quasar system will

of all sizes, including:

be an important tool in helping us further improve our

Airline Solutions in bringing biometric passenger pro-

business operations.”

cessing to the transportation community,” said Stewart

Enabling airlines to adapt to the

to offer special commission incentives to

changing travel market by quickly

travel agencies and produce customized

making compensation adjustments

rule activity reports. Additionally, it

million passengers per year, with an average of 160

Solutions’ core competence and strong position in the

based on their individual needs,

increases profitability by encouraging

daily departures, serving 74 airports with 46 aircraft.

transportation industry will be pivotal in introducing and

agreements and ensuring only the proper

Efficiently and effectively applying

travel agents to sell fares with a higher

commissions are paid can be difficult

variable and enforceable compensation,

yield. Essentially, the Compensation

and costly unless utilizing sophisticated

Allowing for a quick and cost-effective

Manager creates cost efficiencies that

decision-support tools such as the

method of changing compensation

improve the bottom line.

Sabre Compensation Manager.

policies and procedures,

the marketplace . . .

®

This system is particularly useful

PIA, in service since 1947, carries approximately six

Mann, EyeTicket chairman and CEO. “Sabre Airline

successfully implementing biometrics on a broad scale.”

News from Sabre Airline Solutions EyeTicket Corp. and Sabre Airline Solutions have

“We offer the most advanced solutions to address the current environment, from streamlining passenger

formed a new marketing alliance to provide JetStream™

processing at the airport to providing technology to

passenger processing to Sabre Airline Solutions

respond to security requirements,” said Steve Clampett,

customers worldwide.

president of airline products and services at Sabre Airline

The Compensation Manager, an

Significantly decreasing administrative

for airlines that derive a significant

automated compensation administration

costs for participating carriers through

portion of their revenue from high-yield

system and information database that

reduction of commission-related

transactions such as long-haul markets,

JetStream and EyePass™ products and services to Sabre

this agreement ensures that we will have the solutions

ensures the correct and appropriate

debit memos.

premium business travelers and

Airline Solutions’ airline, airport and immigration control

ready to respond as requirements change.”

12 ascend

The terms of the alliance give access to EyeTicket’s

Solutions. “While this environment continues to evolve,

april 2003

13


industry

industry reservations, a process that is still

capabilities to this channel of distribution.

employed by several airlines in South

More Than Just a Web Site

America, Africa and Asia.

By Mona Boulaich and Vinay Dube | Ascend Contributors In the last three years, the number of

can be fulfilled in various ways. The

closer to the customer “Being provides an airline with a marketing

profitability. Since their inception, Internet-based airline booking engines

complicated is that the same passenger

have all too often been incorrectly charac-

may book some of his or her travel on

terized as a channel for distributing

strategy, however, is not only about

the Internet, some of it through a travel

distressed inventory at cut-rate prices.

executing the various fulfillment

agent and some of it directly with the

While low-fare sales do have a significant

options. Being closer to the customer

airline. And in doing so, the passenger

place on the Internet, by intelligently

provides an airline with a marketing

puts the burden on an airline to ensure

controlling its inventory, an airline should

forum that can and should be harvested

that key CRM initiatives, like customer

be able to sell more than 50 percent of

for increased profits and better cus-

profiles, are accessible simultaneously

its Internet seats above the lowest

tomer service. Airlines can easily offer

across each of these distribution chan-

private fare.

Developing an effective Internet

Booking Engine: Only One Aspect of a Successful Internet-Based Distribution Strategy

What makes matters a bit more

hotel and rental car

nels. Specifically,

packages dynamically

all customer touch

fulfillment options, such as the Sabre ®

through the Internet, an

points need the same

Web Sales Engine, powered by GetThere

option traditionally left

information about the

(see related article on page 10), make

for tour operators and

traveler to ensure cus-

Internet-based booking engines a reality

For airlines getting started, several

Internet-based airline booking engines

most cost-effective and passenger-

has grown significantly. The motivation

friendly option is to issue an electronic

is clear — to reduce distribution costs

ticket, although this option must be

for the airline and improve the travel

supported by your reservations and

forum that can and should be

full-service travel agents.

tomer recognition and

for even the smallest of airlines. For

experience for the passenger.

departure control systems.

harvested for increased profits and

Passengers view this as

consistency of service.

experienced airlines, optimizing this

an extra service, and

In addition to

channel of distribution takes a well-

airlines benefit from

CRM-based initiatives,

thought-out strategy that combines

airlines can also apply

fulfillment options with a blend of

point-of-sale and

electronic travel notification, CRM,

alliance-based shop-

alliance and point-of-sale controls,

ping controls to

and effective revenue management.

Despite its rapid growth, this sales

The next best option is to automate

better customer service.

channel is relatively immature and often

the issuance of a paper ticket from

misunderstood. Getting it right takes

printing to postage without human

more than simply connecting a Web site

intervention. And finally, an option of

profile. Profiles are created and managed

missions earned from

to your reservations system.

last resort is to issue your tickets in the

by the passenger through direct contact

selling the additional

traditional manner through an

with an airline’s customer service repre-

content. Such dynamic

airport or city ticket office.

sentative. Credit card information from

content packaging relies

This is an option of last resort

these profiles can then be applied

on an airline’s ability to effectively target

and provide more focused content. It

because CTO-issued tickets

toward an Internet transaction without

audiences on the Internet based on their

is imperative, however, for an airline to

may incur a commission that

this information ever having to be dis-

historic preferences by extending its

have effective pricing and revenue man-

the airline is trying to avoid in

played across the Internet. In addition,

customer relationship management

agement systems to be able to protect its

the first place to reduce its

credit card companies, in conjunction

distribution costs.

with reservations systems providers,

The method of ticketing is also dependent upon the usage pattern of credit cards in a

the incremental comWeb-enabled travel services can notify passengers of schedule and departure information through electronic devises.

increase revenue

also offer fraud protection services for

T H E

credit card usage. Internet-savvy travelers not only

Mona Boulaich is director of sales and marketing systems, and Vinay Dube is vice president for Europe, the Middle East and Africa at Sabre Airline Solutions.

vıew

H I G H

L E V E L

particular country. Even today,

want to purchase tickets over the Web,

News Briefs from Around the Globe

there are a number of Internet

but also want to use this technology

News from Sabre Airline Solutions

users who do not feel comfort-

to be notified of schedule changes,

able submitting their credit

departure gate information, the weather

privately held firm specializing in airline planning and

and scheduling products to airlines,” said Steve

card information over the Web.

forecast at their destination and other

scheduling products and airport consulting, was acquired.

Hendrickson, KHG president. “The combination of

In such cases, ATO- and

travel-related information. To provide

The acquisition furthers Sabre Airline Solutions’ ability to

Sabre Airline Solutions’ established products and KHG’s

CTO-issued tickets are the only

this service to passengers in a cost-

serve the small- and medium-size airline segment of the

strong position in the small- and medium-size airline

options. Other travelers can take

effective manner, airlines can employ

airline software market and expands its customer base

sector creates a broad-based, end-to-end offering for

solace in the fact that several

electronic travel notification services via

and position in the aviation consulting market.

our customers.”

fraud and credit card security

the Web, cell phones and other mobile

KHG and its product and services portfolio will be

options exist today that make e-commerce

devices. While such services go a long

integrated into Sabre Airline Solutions. “By combining the

executives. The firm has 22 employees located at its

Internet-based distribution strategy lies

transactions safe and convenient. The

way in fulfilling the needs of these trav-

best of both product lines, we will broaden our planning

headquarters in Minneapolis, Minnesota, and its office in

in the ability to automate, and in some

safest option is for the airline to store

elers, an interesting byproduct is that

and scheduling tools for the small- and medium-size air-

Washington, D.C. KHG had revenues of US$3.6 million in

cases optimize, key business and fulfill-

and access a passenger’s credit card

these services can also free agents from

line segment,” said Tom Klein, group president of Sabre

2001. KHG clients include airlines, airports, government

ment options. Ticketing, for example,

information in an offline passenger

the voluminous duty of reconfirming

Airline Solutions. “KHG’s leading position in airport con-

agencies and other travel and transport businesses.

Effectively using a Web-site booking engine requires a comprehensive strategy that automates key business and fulfillment options.

The key driver for a successful

14 ascend

In November, the Kiehl Hendrickson Group, a

sulting also will broaden our consulting expertise.”

“We both have long histories in providing planning

KHG was founded in 1992 by a team of former airline

april 2003

15


Sabre Holdings

Sabre Holdings lounge. Subsequent messages could be

At Your Service By Gary Potter | Ascend Contributor The Internet has dramatically

required, etc.). In many cases,

a priority check-in coupon and sends a

changed the way airlines do business

sample code is even provided to

message to the airline that she is on the

and has the potential to continue to do

facilitate easy access to the service.

way to the terminal for check-in. It’s also

so through new and evolving technolo-

Once accessed, the service performs

possible, with Web services, for the

gies. One such Internet technology

the desired function. And because the

shuttle driver to issue boarding passes

being explored by Sabre Labs is how

service is deployed on the Web, it can

and even baggage tags.

custom Web services can be deployed

be reached from anywhere with access to

to enhance various airline operations.

the Internet.

to priority check-in, where she checks

Enabling airline planning or day-of-

“another benefit of Web services.

Increased customer service represents

Now at the terminal, she proceeds her baggage and, if she hasn’t already

to meet the day-to-day challenges of

between alliance partners, Web services

airlines. Holder of nine patents with 20

with the status of the incoming flight

could prove especially beneficial during

pending, Sabre Labs’ team of 18 project

arrival if the flight is delayed.

times of off-schedule operations.

managers and engineers targets and

Increased customer service

Research Into Web Services Holds Promise for Airlines

As the vehicle for communicating

transmitted between the alliance partners

Notifying partners of late arrivals can

prototypes the application of emerging

represents another benefit of Web

minimize the impact on downline and

technologies to enhance existing Sabre

services. In the case of misrouted bag-

interline operations.

Airline Solutions products or introduce

gage, the passenger could be promptly

Sabre Labs, which uses applied

potential new products.

notified and arrangements could be

technology to create business opportu-

Gary Potter is a Sabre Labs

made at that time for the airline to

nities through innovation, is continuing

senior director for research and

deliver her luggage.

to explore ways to tailor Web services

T H E

development projects.

News Briefs from Around the Globe News from Asia Pakistan International Airlines has signed an agree-

vıew

H I G H

L E V E L

Sabre Passenger Reservation System currently in use ®

at PIA. The Roving Agent module’s handheld units

travel applications through Web services

received it, is issued a boarding pass.

ment to implement the Sabre ® Aerodynamic Traveler ™

eliminate the need for a physical connection to a network

could increase operational efficiencies

When the boarding pass is issued, the

passenger processing solutions to heighten customer

cable, enabling agents to provide mobile relief to long

while also helping an airline establish

airline’s Web service-enabled check-in

service and reduce operational and resource costs at

lines of passengers and to proactively meet inconve-

a competitive advantage.

system notifies the downline alliance

a number of its locations. Under this agreement, PIA

nienced passengers during off-schedule operations.

carrier that the passenger has checked

builds upon the Sabre Airline Solutions applications

Take, for example, a passenger

“PIA has gained tremendous benefits from Sabre

arriving at the airport two

already in use at the airline to streamline operations

Airline Solutions technologies,” said Khursheed Anwar,

two potential functional areas that

hours prior to departure.

and enhance revenues.

chief operating officer at PIA. “With the addition of the

could benefit significantly from Web

She arrives and parks in

services — planning (shopping, reserva-

an extended-stay lot, and

via the Sabre ® eMergo ™ Web-enabled and dedicated

will be able to speed up the overall passenger boarding

tions, fulfillment, etc.) and day of travel

with luggage in tow, boards

network solutions, providing PIA access to system func-

process and provide greater efficiency for our agents

(customer service, dining and cabin

a bus for the terminal.

tionality through its applications service provider model

in terms of time required for flight close-out functions

services, flight operations, planning

Depending on the airport,

via an Internet or direct connection. This ASP model

and the ability to perform other duties. This type of

and scheduling, and airport resource

she checks her bags for an

eliminates the airline’s need for costly and complicated

automation is critical for us in our key international

management).

interline trip at curbside or

in-house data center infrastructure and support, and

cities. Accessing these capabilities over the Web

in the terminal. In either

marks the first expansion of Sabre Airline Solutions’

helps us better perform in today’s highly competitive

Internet that provides a link to an

case, she receives a board-

ASP delivery model into the airport environment.

airline industry.”

application that performs a desired

ing pass for the first flight

function — eliminate the need for local

prior to going through the

passenger processing tools designed to increase agent

improved seat utilization with better inventory control

application deployment, which lowers

security checkpoint and

mobility, improve airport efficiency and maximize airline

and top quality check-in services for other airlines that

the overall cost of ownership. Through

heads to the gate area to

customer satisfaction by providing the highest level

use PIA for check-in services in Pakistan. In addition,

Web services, an airline can select —

settle in and wait to board

of service to passengers at the lowest possible cost.

travelers benefit from advance seat and meal selection

and pay for — only the particular

the aircraft.

PIA will implement the Aerodynamic Traveler Gate

and incorporation of frequent flyer programs.

Sabre Labs has already identified

Web services — a location on the

functionality that is needed rather than

In a world enabled with

Sabre Airline Solutions will deliver the new tools

The Aerodynamic Traveler solutions provide

Web services hold out the promise for making travel more seamless for passengers, improving customer service.

buying a complete bundled software

Web services, her travel

system. The airline accesses the Web

experience is made more

service from a unique URL, which lists

convenient and seamless.

the functionality available and describes

The shuttle driver carries a hand-held

in and is traveling with checked baggage.

the requirements needed to use the

device that communicates with the air-

service (what information must be sub-

line’s passenger processing system. The

mitted, what technical specifications are

driver verifies the traveler’s identity, issues

16 ascend

Reader and Roving Agent Check-in modules under the agreement.

Gate Reader and Roving Agent Check-in modules, we

Specific benefits of this agreement include

Connecting to the Sabre ACSI ™ international airport check-in system, already in use by PIA, the Gate Reader

The Gate Reader module reads documents and/or

module will automate the flight boarding and closeout

cards to verify passenger information, including flight

process at the airline’s London Heathrow, Manchester,

information, date, flight origin, passenger name and

New York Kennedy and Toronto locations. After verifying

The alliance partner returns a message

seat number. The Roving Agent Check-in module

passenger information at the time of boarding, the

authorizing complimentary admission to

supplements gate and check-in counter agents’ station-

system performs real-time reconciliation of flight

the departing carrier’s priority customer

ary workstations by providing wireless access to the

lists and passenger data.

april 2003

17


industry

industry In the future, for example, low-cost

Open Reservations Full-Service Providers Offer Affordability and Flexibility to Low-Cost Airlines By Holly Cox and Tim Finholt | Ascend Contributors Low-cost carriers, relatively speaking, are flying high. Not only are they financially outperforming the industry as a whole, but they are also continuing to grow

Low-cost carriers experienced

already available through Sabre Airline

needs of low-cost carriers in mind with

Reservations.”

strengths. Through a codeshare agree-

an emphasis on

ment, a low-cost carrier could provide

ease-of-use,

domestic lift and feed into a full-service

direct distribu-

carrier’s international network.

tion capabilities

Through customer relationship

and a simplified

management initiatives such as loyalty

operating model. Sabre Airline Solutions’ reser-

including basic reporting functions,

begun to incorporate non-traditional

new customers and better maintain their

vations solution,

Revenue management functionality.

programs, such as codeshare agree-

current customer base. CRM initiatives,

backed by more

ments and alternative distribution, to

by maintaining extensive data on

than 40 years’

develop additional revenue.

individual travelers, also bolster customer

experience and

The reservations solutions providers

service, providing a 360-degree view of

used by more

segment because they offer speed to

carriers needs a tailored, affordable

a customer’s preferences thereby

than 70 airlines

market. But more and more, the limitations

reservations offering that provides the

enabling the airline to enhance the

worldwide, also

of their solutions are found to impede

functionality needed by low-cost carriers

entire travel experience.

makes available

the growth objectives of many carriers

today while also allowing room to grow

as they mature, and these carriers find

in the future should the need arise.

require proven technologies that easily

that hybrid carri-

that they need to expand beyond the

Not only can a traditional reservations

integrate into the reservations system,

ers may choose to utilize as their

traditional model to tap into new sources

provider offer this niche reservations

a scalable platform to withstand high

needs change.

of revenue.

functionality, it can offer additional

passenger volumes and access to

capabilities.

extensive airline industry expertise.

A handful of airlines, such 95 percent growth in total passengers

This solution was designed with the

ship that capitalizes on each one’s

to repeat customers, they can attract

share among carriers in the low-cost

network airlines in a symbiotic relation-

programs designed to offer rewards

Branching beyond the strict low-

environment.

the low-cost market segment.

after by growing low-cost carriers that is

cost model, some airlines have already

that serve this niche have gained market

offering designed specifically for

of developing the functionality sought

cally for the low-cost market segment.

Revenue accounting capabilities,

A robust Web booking tool,

and expand even in the current

Airline Solutions . . . has an “Sabre affordable, targeted reservations

reservations offering designed specifi-

airlines could partner with full-service

This growing segment of “hybrid”

These new opportunities would

The niche reservations providers

as Southwest Airlines, Ryanair

that target low-cost carriers are unable

and easyJet, have been able

the functionality

Low-cost carriers need an easy-to-use, streamlined graphical user interface for their reservations systems, which is one of the features offered by a full-service reservations provider.

The capabilities of the reservations solution are supplemented by extensive

The Sabre ® Passenger Reservation

customer support including a help desk

System’s scalable, stable platform will

staffed with experts seven days a week,

soon move to the next generation of

24 hours a day. Customers also have

technology with a seamless back-end

direct input in shaping future product

boarded from 2000 to 2001, based on

to sustain growth without sig-

to support this growing hybrid segment

migration in 2004 to the HP

historical growth rates and projections

nificantly modifying their low-

because they:

platform. The migration to this high-

by the International Air Transport

cost business model. But, a

Do not offer the added functionality

performance platform, which will be

Association. And their low fares increas-

worldwide study conducted

a low-cost carrier needs to cost-

invisible to customers, will allow the

providers in the marketplace, low-cost

ingly appeal to the public, drawing not

by the Center for Asia Pacific

effectively take advantage of new

system to process increasingly large

carriers have a unique opportunity to

only more leisure passengers but also

Aviation concluded that many

sources of revenue,

volumes of annual passengers boarded

evaluate the best option for a long-

siphoning high-revenue business pas-

carriers in this segment will

Lack a stable platform capable of

and more efficiently address customer

term technology partner. Selecting a

sengers away from the network carriers.

struggle to maintain a pure

supporting increasing passenger

demands for carriers as they grow.

provider that offers affordable reserva-

The success of this segment is

low-cost structure after five

attracting new entrants — pure low-fare

Since 1987, Sabre Airline Solutions has successfully managed the reservations functions for pioneering low-cost carrier Southwest Airlines.

years in operation.

volumes, and in some cases are facing “As the industry continues to evolve,

NonStop™

“We’ve already invested the time

direction and determining development of new functionality. With the changes ongoing with

tions capabilities targeted for low-cost

significant technical challenges,

and dollars to develop unmatched reser-

carriers along with the flexibility to

low-cost airlines will need to develop

Do not provide consultancy services

vations functionality for carriers of all

adapt to an unknown future could set

such as Song from Delta Air Lines, and

airlines grow older,” the study concluded,

new revenue streams,” said Gianni

and solutions backed by extensive

sizes so our customers are not faced

the stage for long-term success.

even new reservations providers are

“[i]t will become progressively harder

Marostica, president of airline reserva-

airline industry experience.

with development uncertainty, and we

Holly Cox is marketing communi-

emerging to serve this segment.

for them to apply a tourniquet to costs

tions and departure control for Sabre

will continue to invest in refining our

cations manager, and Tim Finholt

airlines, offshoots of network carriers,

“In all probability as low-cost

Sabre Airline Solutions, which

Today, many low-cost carriers rely

and maintain harmonious relations with

Airline Solutions. “They may look

successfully manages the reservations

systems,” Marostica said. “Not only will

is product marketing manager for

on a very simple reservations solution

their workforces. In effect, management

beyond the traditional low-cost model

functions for low-cost pioneer Southwest

niche providers have to migrate to new

airline reservations and departure

— compared to full-service carriers —

will have to become more innovative

for new opportunities such as code

Airlines, has an affordable, targeted

platforms, they also face the challenge

control for Sabre Airline Solutions.

offering:

and proactive in its oversight of

share agreements, customer relationship

An integrated check-in system,

operations and, perhaps, be prepared

management capabilities — loyalty

Easy-to-use, streamlined graphical

to compromise the low-cost airline

programs, travel banks — and maybe

user interfaces,

model if the situation demands it.”

even interline electronic ticketing.”

18 ascend

+count it up

246 — Combined years’ of airline industry experience possessed by Sabre Airline Solutions’ consultants

april 2003

19


regional

regional North America

Getting Its Money’s Worth ATA Hones in on Key Ways to Get the Most for Its Investments By Steve Hodges | Ascend Contributor In an environment where every

airport check-in system,

collection and business processing

Sabre

dollar is crucial, ATA Airlines strives to

solutions — where change would make

ATA improved its collections by more

incorporate better business processes

a significant financial difference.

than 15 percent, and it’s improving

into its operations in order to get the

Considering the strict time restraints

ACS™

steadily.

easy access to information and give

segment conversion rates by 1 percent

its passenger service professionals the

to 3 percent and reduce new-hire

ability to quickly satisfy customer

recruiting expenses by up to 30 percent.

productivity, reduce call times and

requirements. The objective was to

It also reduces host transaction volumes

simplify training,” said Sylvia Phillips,

build in easy-access features without

up to 20 percent and telephone costs by

quality assurance and customer services

sacrificing productivity or usability.

4 percent to 8 percent.

training at ATA. “Training our staff on

The upgrade resulted in the airline replacing approximately 500 older PCs

“more than 15 percent, and it’s improving steadily. ”

ATA improved its collections by

To accomplish its goals, ATA

work more efficiently. “We were able to improve agent

the new Qik solution is much easier.” Upgrading its reservations function-

throughout its Indianapolis and Chicago

ality is just an example of countless ways

reservations offices, along with upgrad-

ATA has attempted to take advantage of

ing old routers and circuits. The benefits

technology in order to remain a strong

of the new system, however, more than

industry competitor. Improving all facets

justified the replacement expense,

of its operations remains a priority as

airline officials said.

the airline continues seeking ways to

most return on its investment. The air-

ticketing and gate personnel are under

Through this option, a change

upgraded its existing 16-bit system to a

line, which continues to push the fron-

to service customers quickly and

fee alert is automatically displayed for

32-bit system based on the Sabre ® Qik™

with several changes such as the dual

securing its financial stability long into

tiers of technology, recognizes the bene-

efficiently, passengers owing additional

passengers owing additional monies.

business processing solution. This sys-

screen display, pop-up windows and

the future.

fits of technological advancements to

money for change fees may be over-

The alert, which is automatically popu-

tem is designed to improve productivity

menus, the upgraded system minimized

facilitate these initiatives and the need

looked during check in, resulting in a

lated with the change fee information

by 4 percent to 8 percent, improve flight

complex processes enabling agents to

to remain at the forefront of the industry

substantial loss of revenue. ATA realized

contained in the passenger name record,

in order to compete effectively.

it could take advantage of an opportunity

is lifted once the fee has been collected. For passengers already holding a boarding pass, a gate reader will not

The benefits are more than monetary;

get the fastest return on investment,

Steve Hodges is a Sabre Airline Solutions account director.

hightech

accept the boarding pass if additional

News on New and Improved Products and Services from Sabre Airline Solutions

monies are due. Check-in cannot be completed until the change fee has been collected or waived for special circumstances. In addition, passengers

product

popular features of today’s mass-market

Platform Independence — to support

standing by for alternative flights owing

Release 10 of the Sabre ® AirFlite ™ suite of planning and scheduling solutions

applications, including “drag-n-drop,”

our clients’ current hardware, the

versioning, undo/redo, and cut and

system runs on both the UNIX and

paste to other desktop applications.

Windows operating systems.

fees cannot be placed on the standby list until the fee has been received. Sabre Airline Reservations provides increased security features to airlines such as ATA that use its reservations systems. (Photo by Art Brett)

“The rate of change in our industry

to automate the process of identifying

Fees that are waived or overridden are

Performance (Speed) — provides

Transparency — the new system is a

real-time performance, while not

“glass box” rather than a “black box.”

compromising the features of a

Maintainability — the new architecture

enforcement and tracking of exceptions,

An integrated suite of Sabre Airline

multi-user database environment.

lends itself to efficient development

and the Automated Change Fee

Solutions’ core planning and scheduling

Performance is especially critical

and problem resolution. For internal

systems.

for schedule retrieval, editing and

projects, this leads to lower costs. For

incremental forecast evaluation.

external customizations and change

reported for analysis by management. “A policy is only as good as its

description

has accelerated dramatically in the last

change fee charges to ensure they are

Collection option guarantees that we

several years, causing us to rethink most

administered correctly and consistently

don’t leave money on the table, alienate

of our business processes,” said Glen

when they apply and to enable them

our customers who have special

benefits

Scalability — larger customers with

requests, this improves time to

Baker, vice president of information

to be waived when customer circum-

circumstances or put an added burden

Release 10 of the AirFlite solutions com-

many analysts can run the system in

market and competitive pricing.

on our customer service personnel,”

bines the functionality of the core plan-

a networked, multi-user environment.

Integration — the breadth of this suite

Baker said. “That’s honestly different!”

ning and scheduling systems including

Smaller clients who do not want to

is one of its strengths. The integration

flight scheduling, profitability forecast-

invest in expensive servers and

is centered on the schedule data.

involved upgrading the graphical user

ing and analysis, fleet assignment, and

network software can run the system

The system uses a schedule-centric

interface of its reservations system

slot management.

as a stand-alone on a Windows PC.

approach in which all of the modules

Even clients who run extensive net-

access the same schedule data and

services at ATA. “This acceleration has motivated us to be even more creative

stances warrant. “Process consistency and customer

in looking for ways to provide great

service flexibility are guiding principles

service to our customers while achieving

for ATA’s mission to be an ‘Honestly

greater business efficiency.” As part of its analysis of its opera-

Different Airline,’” Baker added. After implementing the Automated

A second initiative for the airline

to perform functions for processing

tions, the Indianapolis-based carrier

Change Fee Collection option, a value-

reservations, ticketing and automated

recently identified two areas of its

added enhancement to the Sabre ®

ticket agent check out.

reservations operation — change fee

Passenger Reservation System and the

20 ascend

ATA wanted a GUI that would provide

features

works in the office may have analysts

write updates to a central location.

Usability — the new release offers

who need to bring a laptop home

All of the products run graphically

intuitive user interfaces that model the

loaded with a stand-alone version.

in the same application space.

april 2003

21


industry

industry need for complicated in-house data center infrastructure and support.

The Price Is Right

Carriers of all sizes across the globe have chosen the eMergo solutions, seeking to improve revenues, lower costs

Hawaiian Airlines Selects Automated Tool for Fares Management

and quicken time to market — affordably and without large capital outlay. “Accessing the AirPrice system via the eMergo solutions enabled us

By David Endicott | Ascend Contributor

The Simple Solutions The following airline solutions are available via the Sabre ® eMergo™ Web-enabled and dedicated network solutions:

to minimize our upfront investment,” Hawaiian Airlines, the state’s largest and longest-serving airline, has constantly

Taniguchi said. “Sabre Airline Solutions

director of tariffs and schedule planning.

presented us with a total cost of owner-

Subsequently, Hawaiian decided to

Quasar ™ passenger revenue accounting system,

been faced with the challenge of address-

evaluate vendors that offer automated

ship comparing a local installation to

Sabre ® Aerodynamic Traveler ™ Gate Reader module,

ing the daily competitive fare changes

technology for fares management.

access via the eMergo solutions. We

Sabre ® Aerodynamic Traveler ™ Self-Service Kiosk module,

that affect its routes. Until last year,

recognized we’d achieve a quicker

After conducting a comparison

Honolulu-based Hawaiian used a manual

study, Hawaiian, founded in 1929 as

return on investment with all the bene-

Sabre ® Aerodynamic Traveler ™ Roving Agent Check-in module,

process to analyze fares on its 140 daily

Inter-Island Airways and now the United

fits of sophisticated functionality and

Sabre ® Aerodynamic Traveler ™ Web Check-in module,

jet flights to points throughout the islands,

States’ 12th largest carrier, chose the

quicker time to market by going with

the U.S. mainland, American Samoa

Sabre ® AirPrice ™ fares management

and Tahiti, which from a pure resource

system for several reasons. Among the

standpoint, limited the amount of routes

deciding factors, the AirPrice system

AirPrice and AirFlite systems because

lated into fewer than four months from

that could be efficiently and effectively

was an established application already

we wanted an integrated solution with

contract signing to implementation,

analyzed for potential fare changes, and

in use at other major carriers. The Sabre

robust functionality and decision

allowing Hawaiian to immediately begin

Sabre ® AirPrice ™ fares management system,

therefore limited the amount of revenue

Airline Solutions pricing team demon-

support that enables us to proactively

using the application and impacting its

Sabre ® AirServ™ aircraft provisioning system,

the carrier could maximize.

strated to Hawaiian a potential increase

make rapid, effective and profitable

bottom line.

of up to 1 percent of annual revenues

decisions in an ever-changing and

given effective use of the AirPrice

In today’s dynamic pricing environment, airlines file fare changes with Air

the Sabre ® AirFlite ™ Schedule Manager. “We decided to implement the

a hosted solution.” That quicker time to market trans-

“The implementation went smoothly

Sabre ® AirCrews ™ crew management system, Sabre ® AirMax ™ automated revenue management system, Sabre ® AirOps ™ Movement Control,

Sabre ® CargoMax ™ revenue management system,

competitive environment,” said Glenn

and allowed us to quickly use the

Tariff Publishing

Taniguchi, vice president, schedule plan-

application,” Ke said. “We like the

Company sev-

ning for Hawaiian Airlines. “Together,

flexibility of using the Internet to access

Sabre ® LiteVision ™ personalized MIDT system,

eral times each

this industry-leading suite of products

the AirPrice system. Analyzing our

Sabre ® StaffAdmin ™ employee tracking and assignment system,

day, which

will enable us to build on the strong

competitors fare changes manually took

ATPCO then

foundation of the AirMax system by

us six to seven hours. With the system,

publishes for

tightly and effectively managing our

we complete the analysis in one to two

Sabre ® StaffPlan ™ staff forecasting and planning system,

other airlines to

schedules, pricing and revenue manage-

hours, and we make more fare changes

Sabre ® TransVision ™ traffic flow analyzer,

view. Airlines

ment from a network perspective.”

to more markets on a daily basis.”

have only a few

When it came to application access,

To date, 40 global customers have

Sabre ® CargoRev ™ automated revenue accounting system,

Sabre ® StaffManager ™ automated staff allocation system,

Sabre ® Travelcard Pro ™ billing and marketing information

hours to identify,

Hawaiian evaluated the benefits of

signed agreements to access Sabre

analyze and

accessing the AirPrice system via the

Airline Solutions applications using the

respond to price

Sabre ® eMergo ™ Web-enabled and

eMergo solutions. These applications

Sabre ® Traverse ™ loyalty management system,

dedicated network solutions against

are hosted in a world-class data center

Sabre ® WiseVision ™ sales expansion system.

those of a local system installation.

managed by EDS, a company recognized

The eMergo solutions, an applications

worldwide as an expert in data center

changes by competitors

Hawaiian Airlines could realize up to a 1 percent increase in annual revenues by automating its fares management process.

before the next

access system,

For more information about the eMergo solutions,

filing deadline. Without timely

system, helping to justify its investment

service provider model, offers access to

operations. Like Hawaiian, carriers of

responses, Hawaiian was faced with

in technology.

20 industry-leading Sabre applications.

all sizes access the eMergo solutions,

contact Jim Quilty, director of marketing for the eMergo solutions, at 817 264 2906, or send an e-mail message to

the potential of losing revenue or

In addition, Hawaiian wanted

Providing a secure and safe environment

helping them effectively manage their

to supplement the Sabre ® AirMax ™

with superior reliability and data access

information technology spend and

automated revenue management

over an Internet or direct connection,

improve their bottom line.

provide a more effective means to

system that was already in place by

the eMergo solutions reduce an airline’s

analyze fares,” said Tessa Ke, senior

implementing the AirPrice system and

upfront investment and eliminate the

market share. “We knew an automated tool would

22 ascend

jim.quilty@sabreairlinesolutions.com.

David Endicott is the vice president for the eMergo solutions.

april 2003

23


Sabre Holdings

By Ascend Staff versus more traditional distribution

reservations systems and third-party

methods,” said B. Ben Baldanza, senior

Web sites.

option available to help lower the costs

vice president marketing and planning for

of distribution.

US Airways, which participates in the DCA

are guaranteed the reduced booking fee

option. “We are joining with Sabre Travel

rate for three years, as well as the fee

Network to respond to these concerns

for cancellations.

participating in the DCA, “Byairlines are guaranteed the reduced booking fee rate for three years, as well as the fee for cancellations.

by eliminating the barriers and making Web fares available via all its channels.

By participating in the DCA, airlines

The DCA provides several benefits for airlines, such as:

This move will allow us to better manage

The ability to offer travel agents seam-

distribution costs over the term of the

less, “real-time” access to their inven-

agreement.”

tory during the availability process,

The three-year option is available

complete inventory down to the last

but the program will soon be expanded

seat available in real time, eliminating

internationally. Current agreements

the probability of any lost sales,

Availability Three-Year Option, airlines

typically cover only 30-day terms.

The ability to easily integrate their con-

in the Participating Carrier Agreement —

In the Global Distribution System,

tent with their revenue management

which covers the distribution of airline

DCA is the highest of six different

News from Sabre Airline Solutions

systems to maximize revenue potential,

carriers accessing software products through the Sabre

optimize airline pricing, revenue management, operations, ®

eMergo ™ Web-enabled and dedicated network solutions, an

crew scheduling and others. “We believe the eMergo solutions delivery method

application service provider model that provides remote

will be a key tool allowing us to grow our business while

access to leading technology. Already, 14 customers have

keeping our costs under control,” said Mary Ellen Thiets,

been implemented to date, making the eMergo solutions

manager of passenger revenue accounting at Great Plains

the leading ASP offering for the airline industry.

Airlines, which accesses the Quasar system through the eMergo solutions. “For

The customer list for the eMergo solutions includes airlines spanning the globe. The list below is an example of the types of carriers that signed last year.

Products accessed ®

loading of electronic ticket

AirMax ™

Aerolineas Argentinas

Sabre automated revenue management system

AeroMexico — Aerovias de Mexico S.A. de C.V.

Sabre ® AirPrice ™ fares management system

Aeropostal Alas de Venezuela C.A.

Sabre ® AirOps ™ Movement Control Sabre ® AirCrews ™ crew management system Sabre ® LiteVision ™ personalized MIDT system

Air Jamaica Ltd.

Air Malta p.l.c.

lifts will reduce our data entry expense by 90 percent.”

Sabre ® Aerodynamic Traveler ™ Gate Reader module Sabre ® Aerodynamic Traveler™ Roving Agent Check-in module

airlines with a wide range of services

costs,

Lloyd Aereo Boliviano SA (LAB)

tion of approximately 10 percent, which

to market and sell their flight

Quasar ™ passenger revenue accounting system Sabre ® LiteVision™ personalized MIDT system

represents an average of 40 cents per

and fare information to approx-

highest level of participation in the GDS. Eight carriers worldwide have

an airline agrees to provide all published fares with the

already partnered with Sabre Travel

(those where the supplier’s

Network for the DCA option enabling

identity is not disclosed until

ment and achieve a quicker return on investment and

tool that is available around the clock to support our competitive needs.”

The eMergo solutions offer airlines of all sizes access

Through the DCA option,

exception of opaque fares

minimize our upfront invest-

reliable decision-support

System — receive a booking fee reduc-

and commit to a three-year term at the

solutions has allowed us to

ensures that we have a

Sabre TransVision™ traffic flow analyzer

lished fares, promotions and services,

system via the eMergo

®

Sabre Traverse™ loyalty management system

Gulf Air- Gulf Air Company G.S.C.

around the world.

“Accessing the AirPrice

®

Long-term reduction in distribution

imately 60,000 travel agents

Hector Fuentes, pricing director at AeroMexico, said,

connectivity levels. The levels provide

agree to provide access to all their pub-

instance, we expect the Quasar system’s automatic

Customer

content through the Global Distribution

booking. In return, participating airlines

L E V E L

airline business.These applications include tools to

Last year, 28 airlines joined the growing number of

The ability to interactively display their

to all airlines with U.S. points of sale,

Under the new Direct Connect

H I G H

News Briefs from Around the Globe

New Direct Connect Availability Option Helps Lower Distribution Costs Distribution System now have a new

vıew

T H E

Savings Direct

Airlines utilizing the Sabre ® Global

Sabre Holdings

By taking advantage of the DCA Option, airlines can market their fares to travel agents around the world and also lower their distribution costs.

The applications available through the eMergo

to leading decision-support tools via an Internet or direct

solutions have all been integrated and tested in the

connection, eliminating airlines’ need for complicated

environment. For a new airline signing on to the system,

in-house data center infrastructure and support. Airlines

this means that only the airline’s data and business rules

choose the eMergo solutions for affordable access to

have to be loaded into the eMergo solutions, resulting

products designed to improve revenues, lower costs and

in much faster implementations compared to on-site

reduce time to market, without large capital outlay.

installations. Sabre Airline Solutions manages the system

Sabre Airline Solutions currently offers 20 decision-

administration and database requirements, which

support and optimization software applications through

includes 24-hour data center support. Last year, service

the eMergo solutions to support crucial areas of the

levels met or exceeded all customer expectations.

Sabre Connected travel agents, offline

after the sale). This includes all

and online, to book all their content,

fares that the airline sells through any

Price certainty in booking fees

including Web fares, through the GDS.

third-party Web site and through its

at the DCA level,

own Web site and reservations offices.

Elimination of fare confusion for

a niche marketing tool to a mainline

Additionally, the airline agrees to provide

both corporate and leisure travelers,

distribution channel, travel agencies

equal opportunities for Sabre Connected

Increased sales opportunities,

and corporate travelers have become

agents to have access to promotions that

Seamless implementation (no

10 to 15 — Percent of total

29 billion — Estimate in dollars 3.7 trillion — Estimate in dol-

frustrated with the discrepancies among

the airline may make available through

technology development work

airline revenue generated by cargo

of online travel sales worldwide in 2003

the various fares airlines offer online

other channels, including competing

required).

“As the Internet has evolved from

24 ascend

+count it up lars of total travel sales worldwide in 2003

april 2003

25


industry

industry

Making Every Dollar Count A Conversation With … Brett Godfrey, CEO Virgin Blue Since it began operations in 2000,

sustainability not profitability, and that

primarily as a result of technology drives.

and our ground crew and check-in

meant a long-term approach to all

For example, the only department in the

teams are also trained as cabin crew.

contracts and a true sense of fairness

company in 2002 in which the director

People think we use rear stairs to save

to fare setting. For example, we did not

was allowed to set his own budget was

money, when the reality is we use them

take advantage of Ansett’s demise by

information technology. Timely revenue

to save time, which in turn gets more

increasing fares, we wanted those

collection is crucial, and I believe our

utilization out of our aircraft. We use

passengers to appreciate our service

software here is state of the art. Crew

our size to leverage bigger and better

and value for money and return as

planning, scheduling and optimization

savings.

opposed to a one-time bonanza.

software recently acquired will also

Q: When looking at investing in an

result in material savings.

IT system, how quickly do you look to

also includes Virgin Atlantic Airways,

Q: What is the single most

get a return on investment?

Virgin Blue has rapidly become one of

the award-winning airline has been

important aspect of running a

A: We look for a system to pay for

the strongest airline brands in the

recognized for its innovation, customer

low-cost/low-fare airline?

itself within 12 to 18 months for

Asia/Pacific region. With its emphasis on

relationship management and service

A: You can’t keep the “air fair”

tangible cost savings or value benefits.

a point-to-point route structure serving

excellence.

without the lowest costs, and

16 markets in Australia, the carrier has

The Virgin Blue name is a light-

always maximized its resources as the

hearted take on the Australian slang for

paramount to success.”

region’s pioneering low-cost carrier.

a red-headed person — known locally as

Q: What factors do you

a Bluey — a perfect distinction for the

weigh when implementing

livery of its vibrant red fleet.

new business processes?

Virgin Blue is single-mindedly focused on controlling costs and ensuring that its money is well spent.

As part of its IT strategy to

that’s our motto — “cost control is

Virgin Blue CEO Brett Godfrey

A: Clearly, cost benefit and

With its exclusive use of electronic tickets,

discusses some of the ways the airline

likelihood of attainment.

“a là cart” in-flight food menu available

has been able to compete effectively

Q: What are some of the areas

for purchase, modern yet efficient office

while steadily improving its bottom line.

you can look at to achieve rapid

facilities and single fleet type, the carrier

Question: How has Virgin Blue’s

return on investments?

keeps costs at a minimum without jeop-

strategy changed to combat the many

A: We continue to search for and

ardizing its quality and reputation. In

challenges facing the airline industry

find markets where competition is

maximize growth, Virgin Blue recently

fact, Virgin Blue was voted the world’s

today?

complacent and the

selected Sabre Airline Solutions to help

“Best Low Cost Carrier” in the Travel

Answer: Virgin Blue was born into

consumer is being ripped off or

integrate its flight operations. As part of

Quality.com Aviation Awards for 2003,

current airline challenges and doesn’t

underserved. When we find these

a five-year agreement, Virgin Blue will

besting other well-known low-fare carriers

know any differently. Our primary

markets, and we do so regularly,

deploy Sabre ® AirOps ™ Movement

each asset employed (aircraft and

Control, the Sabre ® AirCrews ™ crew

people) is profitably employed.

management system, the Sabre ®

Q: How does Virgin Blue seek to

AirFlite ™ Schedule Manager and

such as U.S.-based Southwest, Irish carrier

challenge has been self-imposed growth

Ryanair and U.K.-based airline easyJet.

and quite massive growth relatively

Brett Godfrey leads Virgin Blue, the Australian low-cost carrier, which has undergone tremendous growth since it began operations in 2000.

speaking. We started with two aircraft

part of its IT strategy to “Asmaximize growth, Virgin Blue

in August 2000; by August 2002 we had

to reach a conclusion that we felt our

Q: What role does technology play in

maximize its resources to get the

the Sabre ® AirFlite ™ SlotManager ™

12 and by August 2003 we’ll be at 35.

shareholders, via the board, would ratify

maximizing your airline’s bottom line?

most value from its investment?

system. In addition to this agreement,

The team at Virgin Blue has become

immediately.

A: Technology infuses and drives our

A: We maximize demarcation. For

the airline also utilizes Sabre ® AirOps ™

recently selected Sabre Airline

accustomed to heroic deeds being

Q: Does being a low-fare carrier make

innovation, and Virgin Blue has been

example, our guest contact center

Flight Planning.

Solutions to help integrate its

considered the norm.

it more critical that you get a rapid

perceived as an innovative airline

staff is trained to work at the airport

Q: Has the current situation

return on your money?

caused you to put a greater focus

A: Contrary to popular misconception,

on achieving maximum value (getting

Virgin Blue is not focused on rapid

the most possible benefit from

return on its money. The airline was

the airline began flying in August 2000,

assets/resources)?

started from a mere A$10 million,

Virgin Blue has grown its fleet nearly 15

A: We have always been extremely

and banks’ research departments have

600+ — Number of airlines with

12 million

been quick to place multiples of more

schedules in the Sabre Passenger

of fares stored in the Sabre Passenger

wide that have been assisted by Sabre

Reservation System

Reservation System — 12 times as

Consulting

flight operations.

From its first two Boeing 737-400s

fold. With its current fleet of 29 Boeing

diligent, in fact, perhaps pedantic in our

737s, Virgin Blue flew 2.3 million pas-

attention to value. Our recent Boeing

than 100 times this investment as the

sengers in 2001. An offspring of Sir

announcement emphasized that focus

current valuation of our airline. Our

Richard Branson’s Virgin Group, which

by taking near on 12 months of our time

focus from the start was to build

26 ascend

+count it up ®

— Number ®

400 — Number of airlines world-

many fares as stored in 1978

april 2003

27


product

product

Meals, Magazines, Music and More Realize Cost Savings by Automating All In-flight Services By Erin Bouck and Jamie Patel | Ascend Contributors In today’s “tight-fisted” economic environment, airlines are experiencing

airline’s total expenses — equating to hundreds of millions of dollars.

immediate needs of an airline.

kitchens that globally support the

airline-approved price for any given

reduced caterer delivery charges that

carrier. Newly designed to run in a

date range. Specifications can be

can total tens of millions of dollars

“push” mode, the inventory control

grouped in a way that best suits the

per year.

system can even automate procure-

specific needs of the carrier. Enhanced

ment procedures for additional

menu planning significantly reduces

carriers, specifically in North America,

inventory needs. Current users of the

related personnel costs as well as

piloting “buy-on-board” programs that

AirServ system have reported a

improves and standardizes communi-

allow passengers to purchase meals

5 percent to 7 percent decrease in

cation with caterers.

while in flight? The AirServ system

overall inventory levels in addition

Automated scheduling — the AirServ

provides enhanced value to carriers that

to reduced manpower requirements

system’s scheduling module maps

are moving to this model by delivering

to manage such operations.

the carrier’s routed schedule with

functionality that directly applies to the

With a proven history of enhancing

And what of the recent trend of

the carrier’s specific boarding

management and execution of these

productivity and significant cost savings,

policies (distance, market

“meal purchasing” programs.

the AirServ system enables clients to

segment, city-pair and so on),

reductions in departure

realize quantifiable improvements in a

automatically building a planned

purchasing program, the AirServ sys-

schedules and lower load

wide variety of areas, including:

provisioning schedule for each

tem offers the ability to create a hybrid

shrinking revenues due to a variety of reasons including declining ticket prices,

Automated tools, such as the Sabre ® AirServ ™ aircraft provisioning

factors. In light of these

For airlines considering a meal

Reduced meal overage levels —

Automated financial controls — the

departure across the system. In

environment where the airline can choose

revenue-diminishing factors, a carrier

system, enable an airline to tightly

the AirServ system’s meal ordering

AirServ system’s pricing and invoice

addition, the module automatically

to provide meals for selected markets

must dig deeper and deeper into its

manage all aspects of its “above the

functionality uses a complex forecasting

processing modules ensure that a

recognizes opportunities for the

and designate those markets targeted

various business functions to find

wingtip provisioning” — everything

carrier only pays for the services that

multiple provisioning of goods — the

for buy-on-board within the system.

ways to quickly streamline operations,

from meal and beverage service to duty

have been provided and only at the

ability to board goods for more than

These targeted buy-on-board flights

decrease costs and, ultimately, improve

free, entertainment, reading materials,

prices agreed upon with its partners.

one flight leg — and schedules these

with their associated meal forecasts can

its financial outlook.

cleaning services, pillows and blankets.

By automating the onboard provision process, the AirServ system can help airlines save nearly 5 percent in their total catering expenses.

One way an airline can gain

The pricing functionality provides a

The leading systems automate

algorithm and real-time data feeds

single source of record and communi-

processes associated with

from the airline reservations and

cation of prices across all products

menu planning and schedul-

departure control systems to provide

(food, beverages, inventory items,

ing, day of operations and

the most accurate meal forecasts

etc.) and services (delivery, cabin

communication of changes,

available today in the marketplace.

services). When pricing is mapped

inventory management of

Forecasts are generated by class for

to services that are scheduled

airline-owned goods, pricing

each departure utilizing historical

through the system, invoices can be

and invoice processing, and

flight and day-of-the-week data,

automatically accepted or rejected

communication of real-time

booked passenger levels, special meal

based on the system’s intricate and

information to partnering

counts, potential passenger upgrades

thorough audit validation mechanisms.

caterers and vendors. Quite

and non-revenue passenger counts as

These automated financial control

simply, such a system

well as timely schedule adjustment

mechanisms can save a carrier nearly

streamlines the entire in-flight

information. The system can reduce

5 percent in total catering spend by

operation for any size carrier

meal overage levels to 3 percent or

minimizing caterer overpayment and

across its entire network of

4 percent and, in turn, generate signif-

reducing headcount required to

business partners.

icant reductions in an airline’s overall

perform these procedures.

food expenses.

Standardized menu planning — the

American Airlines, the AirServ

Reduced airline inventory costs —

system’s menu planning applications

system is also being deployed

the system’s inventory control mod-

let a carrier or its caterer create and

Currently in use at

With its intuitive graphical user interface, the AirServ system provides an easy-to-use tool for dining and cabin staff.

at Lufthansa and Aeroflot. In addition,

ules optimize the amount of inventory

manage all menu specifications, both

significant savings and enhanced effi-

more than 20 airlines are currently

carried by the airline (trays, plates,

conceptual and production, from one

ciency is by automating the onboard

reviewing the system and the specific

glasses and so on) by forecasting to

online database. Standardized across

opportunities per airline-specified

then be sent to the appropriate caterers

products and services provisioning

benefits it delivers. The AirServ system

the airline schedule and the planned

all designated caterers, specifications

rules. Automating this arduous

and vendors for fulfillment. The AirServ

process. In some cases, the costs

offers a modular design and pricing

boarding requirements for each

include digital images and detailed

process results in a reduction of

system’s data warehouse functionality

associated with in-flight services can

structure that enables customizable

departure. In addition, it automates

preparation instructions. These speci-

required personnel and potentially

offers increased value in this scenario

make up 2 percent to 3 percent of an

deployments based on the most

the transfer of goods among catering

fications are associated with a single

significant cost savings due to

(continued on next page)

28 ascend

april 2003

29


product specific benefits, accessing the

system-provided passenger “With history data in hand, the airline

AirServ system as a Sabre

®

eMergo ™

Web-enabled and dedicated network

regional data center infrastructure is eliminated along with ongoing system maintenance and support concerns.

solution — an application service

No matter the in-flight services

can better understand the specific

provider offering — delivers a unique

strategy an airline puts in place, the

tastes, trends and price sensitivity

combination of information technology

AirServ system can help drive down

operations-related advantages. The

costs by standardizing practices asso-

eMergo solution delivery method

ciated with its operations, automating

allows an airline to access the latest

procedures around these operations

in the area of customer relationship

IT via the Internet or a direct commu-

and giving the carrier ultimate control

management. With system-provided

nications connection. With the Sabre

over its entire onboard products and

passenger history data in hand, the

Airline Solutions application hosted

services provisioning process.

airline can better understand the spe-

in a secure data center managed by

Erin Bouck is the product manager

cific tastes, trends and price sensitivity

IT professionals, an airline’s upfront

for the AirServ system. Jamie Patel is

of its passenger base.

capital outlay is significantly reduced.

of its passenger base.

Adding to the numerous system-

director of dining and cabin services

In addition, the need for an in-house

T H E

at Sabre Airline Solutions.

News Briefs from Around the Globe News from Asia Bangkok Airways has signed a five-year, multi-milliondollar contract with Sabre Airline Solutions for the implementation of a suite of advanced passenger reservations and departure control technology. The broad reservations and departure control suite that Bangkok Airways is implementing includes the Sabre ® Passenger Reservation System, the Sabre ACSI ™

vıew

H I G H

L E V E L

Bangkok Airways became the 10th Asia/Pacific-based airline to outsource its reservations and departure control system to Sabre Airline Solutions in the last 12 months. Bangkok Airways currently operates a fleet of

Boeing 717 and ATR72-200 aircraft for domestic services within Thailand, as well as international services to regional destinations. The Passenger Reservation System will effectively

international airport check-in system, Sabre ® AirOps ™

manage both reservations and operations without the

Load Planning and a suite of tools from the Sabre ® Qik ®

need for Bangkok Airways to develop, host and maintain

business processing solution. “After an exhaustive evaluation of more than 10 reservations system providers, we selected Sabre Airline Solutions because its solution offered instant access to

its own systems. Functionality provided includes reservations, inventory and distribution management, traditional and electronic ticketing, and fares and pricing. The ACSI system automates the check-in and

market-leading reservations and departure control capabil-

gate management process and provides a faster,

ities and functionality that would enhance our yield and

more efficient passenger check-in and boarding process,

optimize costs,” said Ping na Thalang, vice president of

while Load Planning will be used by the airline for load

information systems for Bangkok Airways. “Furthermore,

planning requirements.

we believe Sabre Airline Solutions offers an excellent product and overall value, and a range of technology interfaces that enables us to continue building our own applications around the host system.” According to Ping na Thalang, the choice of Sabre

These systems are supplemented by the Qik solution, a suite of graphical user interface products that make utilization of the reservations and check-in host systems user friendly and substantially reduce training timeframes. The Qik solution will allow Bangkok

Airline Solutions for this contract was an essential step in

Airways’ employees to quickly and efficiently service

its domestic and international expansion program. The

passengers by presenting information in a consistent,

carrier is recognized as being one of Asia’s most successful

uncomplicated format with logical entry sequences and

independent airlines and Thailand’s second largest carrier.

graphical representations.

30 ascend

T H E

News Briefs from Around the Globe News from Latin America

vıew

H I G H

L E V E L

by Air France through its facility in Valbonne, in the

Avianca, SAM and Aces, the three Colombian airlines that constitute Alianza Summa, contracted with Sabre

south of France. The AirMax system is a proactive revenue manage-

Airline Solutions to receive specific commercial and

ment and decision-support system that maximizes

competitive technical assistance to help the carriers

revenues by optimally allocating available seat inventory.

improve their operational efficiencies and increase

This capability gives airlines the ability to selectively open

their revenues.

and close the available inventory in the different fare

Sabre Airline Solutions assisted the airlines in pricing

classes or buckets as the market dictates. Users of the

and revenue management, flight scheduling, network

AirMax system can expect to generate from 3 percent to

planning, fleet planning, financial planning and control,

8 percent of additional revenue, resulting in potential

sales, distribution, branding, loyalty, and competitive posi-

profit increases of 50 percent to 100 percent. The AirMax

tioning. Combined, the carriers operate a 54-aircraft fleet,

system’s capabilities have been recognized in premier

which flies to 23 domestic and 19 international destinations.

industry publications and by leading industry organiza-

“We want to have the first place in the airline industry

tions and have been honored with the 2002 ATTIS award

and gain insight into our core performance thus creating

for the “Best Revenue Management Solutions Provider.”

positive memorable journey experiences and aeronautical

“We are committed to delivering quality ASP

services,” said Juan Emilio Posada, president of Alianza

solutions to our customers through the partnership

Summa. “We are going to make the changes needed

with Sabre Airline Solutions,” said Olivier Berthault,

to operate seamlessly, efficiently and profitably. Our

director of information systems, marketing and sales

agreement with Sabre Consulting is focused on helping

at Air France. “We consider this to be one of our most

us create and sustain that competitive edge.”

successful partnerships from which customers are

Sabre Consulting consists of airline experts acting worldwide to improve the business performance of the

deriving tremendous benefits.” The Sabre Airline Solutions and Air France partner-

company’s airline clients. This experience ensures that

ship was launched in 1996 to provide Sabre Airline

every consultant understands the complexities of the

Solutions‘ revenue management solutions to airlines

airline business and can offer true, hands-on, tactical

hosted by Air France in an ASP environment. Sabre

counsel rooted in results. Sabre Consulting currently

Airline Solutions‘ depth of industry experience and

works with more than 110 customers around the world.

award-winning revenue management software is

“It is Sabre Consulting’s proven track record that

complemented by Air France’s hosting capabilities.

attracted us to work with them,” Posada said. “It is the

Since 1996, the partnership has successfully delivered

company’s experience and industry knowledge that we

ASP-based revenue management solutions to Brit Air,

count on to help us reach our goals.”

Regional, Compagnie Aerienne Europeenne, Middle East Airlines and Air Mauritius.

News from Europe and Africa

The AirMax system can be run in different process-

Air France in partnership with Sabre Airline Solutions

ing modes based on the desired level of sophistication

recently signed a five-year contract with Royal Air Maroc

in inventory control. It offers three levels of inventory

to provide a complete revenue management solution.

controls: leg segment, virtual nesting, and origin and

Under the terms of the agreement, Royal Air Maroc will

destination. In fact, Sabre Airline Solutions offers the

use the Sabre

®

AirMax ™

automated revenue management

system as an application service provider solution hosted

+count it up

industry’s only commercially available origin and destination revenue management system.

46 billion — Dollars generated annually by the air cargo transport industry april 2003

31


industry

industry medium and low-cost airlines to provide

A Model for Success An Integrated Operations Control Center Helps Propel WestJet By Elayne Vick | Ascend Contributor WestJet has come a long way in a

77 additional next-generation Boeing

short time. With its rapid expansion and

737 aircraft while it retires its fleet of 21

24 consecutive quarters of profitability,

737-200 aircraft.

even during an industry downturn, the

A key contributor to WestJet’s

can help determine the restrictions that

AirOps™

Flight Planning and the Sabre

system via Citrix, which enables

must be applied to particular aircraft for

FliteTrac operations control and flight

employees at varying locations to view

dispatch. For enhanced crew manage-

following system — that help bind the

data in the FliteTrac system. ACARS

ment, WestJet uses other components

OCC together.

communicates directly with the FliteTrac

of the Flight Control suite: the Sabre ®

system to populate times, fuel, aircraft

CrewTrac ® crew scheduling system

systems to increase our operations coor-

parameters and any other pertinent

tracks crew assignments while the

dination, improve our flight planning and

data. This data can also be entered

Sabre ® CrewQual ® crew qualifications

more effectively communicate with air-

directly into the FliteTrac system.

and training records system helps

®

“We use Sabre Airline Solutions

ports and aircraft,” said Michele Derry,

satisfy the regulatory

director, operations control for WestJet.

requirements for main-

patchers, crew schedulers, load planners

“Our operations team uses Flight Planning

taining the training

and operations coordinators —

and the FliteTrac system extensively.

records of various

through increased flight cycles. With a staff of 60 — including dis-

performance has been its integrated

WestJet’s OCC brings together vital

The combination of these two products

proven to be one of the industry’s top

operations control center, which has

components needed to form the central

has been an excellent tool for our OCC.

performers during the last few years.

helped the airline maximize its operations

nervous system of the airline.

Since its founding in 1996, WestJet has grown to become the second largest

airline personnel. In addition to these flight operations

With its past successes, WestJet has

products, WestJet takes advantage of

laid a strong foundation for continued

nent of our dispatch system, enabling

Sabre Airline Solutions expertise in

prosperity. Through its proactive use

areas together, WestJet maximizes its

optimization of flight planning by utilizing

maintenance and crew management. By

of technology, the airline is poised to

ability to run smoothly, a goal of any

cost index planning, fuel tankering and

providing minimum equipment lists and

continue its outstanding record.

Maintaining on-time flight operations

airline. Analysts in the OCC are able to

analysis, and contingency planning,”

configuration deviation lists information

in a safe and efficient environment,

have a full view of the airline’s overall

Derry said.

on the flight release, the maintenance

Minimizing ground time through

operations rather than being limited to

more efficient flight planning and

their individual areas of responsibility,

improved aircraft movement control

enabling them to be more proactive in

and monitoring,

problem solving.

efficiency and user productivity.

“performance has been its integrated operations control center . . . ”

control module of the FliteTrac system

the airline have access to the FliteTrac

Canada-based low-fare carrier has

A key contributor to WestJet’s

All cities served domestically by

the integrated tools — including Sabre ®

By unifying its operations functions, WestJet has achieved key goals including:

By bringing the various operations

carrier in Canada and the most successful low-fare carrier in the country’s history. In 2000, WestJet was the second most

“Flight Planning is a major compo-

Elayne Vick is a marketing advisor at Sabre Airline Solutions.

Introducing the Sabre Flight Control Suite Low-cost as well as small-

solutions. Many of the products

Sabre ® CrewPlan ® flight crew

and medium-size airlines have

in the suite were added when

planning system,

unique needs that often times

the company acquired David R.

Sabre ® CrewTrac ® crew

WestJet uses a single fleet type of

require specific, tailored afford-

Bornemann Associates, a small

scheduling system,

Boeing 737 aircraft. Founded with the

able tools that provide the right

privately held firm specializing

Sabre ® CrewQual ® crew

idea of providing low-fare travel across

functionality without unneeded

in aviation software products

qualifications and training

western Canada, WestJet initially served

extras.

since 1978.

records system,

profitable airline in North America, just after Southwest Airlines. Like Southwest, Calgary-based

five markets with its original three

Like WestJet, many of these

Boeing 737-200s. Since then, WestJet has continued to expand throughout the an eastern hub in Hamilton, Ontario. WestJet reached a milestone in 1999 when it completed its initial public offering of 2.5 million common shares

WestJet, the most successful low-fare carrier in Canadian history, has maximized its efficiency and user productivity by unifying its operations functions into an integrated OCC.

of stock, providing the necessary capital for the expansion of the company. In its

Controlling costs through reduced fuel

seven years, the airline has grown its

consumption,

fleet by more than 1,000 percent to 37

Improving personnel productivity,

aircraft and currently plans to add up to

Enhancing aircraft productivity

32 ascend

Technology plays a major role in unifying the OCC.

Sabre ® FliteTrac operations

carriers utilize a special suite of

Sabre Airlines Solutions

control and flight following

tools — the Sabre Flight Control

portfolio, these products are

system,

suite for small, medium and low-

used by more than 70 airlines

Sabre ® AirOps ™ Flight Planning,

cost airlines. In the past few years,

around the world, providing

Sabre ® AirOps ™ Load Planning.

Sabre Airline Solutions has tar-

quickly installed “off-the-shelf”

geted airlines of all sizes, refining

flight operations and crew

this product suite, please call

function-rich systems to address

products.

480 948 1955 or send an

®

country, now serving 26 markets including

Now integrated into the

a smaller market demanding leaner, more affordable PC-based

The Flight Control suite includes:

For more information on

e-mail message to david.bornemann@sabre.com.

WestJet selected components of the Sabre ® Flight Control suite for small,

april 2003

33


industry

industry

Low Risk, High Reward Conversion to New Reservations Systems Can be Accomplished With Minimum Disruption By Holly Cox | Ascend Contributor Many airlines have realized

Airlines are justifiably concerned

“selecting the right vendor to support There is much to consider when

checkpoints will keep an airline on track

understanding of how the cutover will

throughout the process. An airline’s

impact everyone involved, including

helping the airline stay competitive for

unique needs should be reflected

airline personnel and customers,”

the long term should be evident in these

throughout every stage of planning,

Hall said. “Maintaining high levels of

cutover-specific support initiatives,” Hall

organization and execution including

customer service during the conversion

said. “However, at a minimum, these

training and subsequent support.

should be the top priority.”

initiatives should rest on the foundation

During this phase, both the airline and

and implementing a comprehensive

offering worldwide offices and a help

sponsor who is heavily involved

communications program to inform

desk staffed 24 hours a day, seven days

throughout the migration process.

customers ahead of time, setting

a week with an exceptional first-call response rate.”

“Effective training and proven

expectations and promoting the added

airline personnel change-management

features and benefits available to them

techniques are essential for solid

once the new system is in place.

that an unsuccessful migration could

competitive edge from outsourcing

result in diminished revenue from

their reservations and departure control

extended system downtimes, loss of

functionality. With more than 70 percent

data during the transfer of information

both an industry-leading system and

of worldwide passengers booked through

and the negative impact on customer

a successful cutover experience.

a hosted reservations system, outsourc-

service. By selecting a reservations and

ing continues to prove attractive to air-

departure control provider with extensive

lines of all sizes. But many airlines look-

airline industry expertise and conversion

scope the project comes from an exten-

ing at outsourcing their reservations

experience, excellence in project organi-

sive knowledge of airline operations and

to effective planning is ensuring full

system or switching providers fear an

zation and planning, a successful track

background in the aviation industry,

technical capability prior to the cutover

unsuccessful system migration.

record in orchestrating “knife-edge”

which is demonstrated through proven

through business and data simulations.

cutovers, and proven

migration methodologies successfully

An experienced supplier will also offer

post cutover support,

used repeatedly with airlines of all sizes

extensive contingency planning and

an airline can avoid

and levels of complexity.

established risk management proce-

these potentially dangerous scenarios. “In addition to

planning and project management,”

instance, offering a single, easy-to-use

it is important that the vendor also be

graphical user interface with intuitive

with the airline to analyze key processes

skilled in phased migrations, maintaining

workflows for reservations and airport

and make recommendations to bridge

the flexibility to move to this strategy if

agents will substantially increase the ease

gaps between business practices today

the airline prefers this approach.

of migration with less training needed

An equally important element

to identify technical risks and describe

vice-president of delivery for airline

fallback criteria and procedures in detail.

Sabre Airline Solutions. ”What sets a

the vendor’s ability

vendor apart is its industry and conver-

to provide an effec-

sion experience that allows it to quickly

rienced in orchestrating a “knife-edge”

tive and efficient

and effectively respond to issues if and

conversion. In this approach, all systems

cutover experience

when they arise. It is also necessary to

cut over virtually simultaneously to

with as little operational disruption as

consider the amount of dedicated per-

minimize operations disruption and

systems directly impact the customer

possible should also be an extremely

sonnel available — all of whom should

customer service impact. Doing this

and are at the core of an airline’s opera-

important consideration in the decision-

have extensive experience working

eliminates the need for repetitive systems

tions, integrated with virtually all other

making process for a supplier,”

through virtually every possible scenario

synchronization as well as bridging

systems software,” said Gianni Marostica,

said Marostica.

throughout the conversion process.”

software and other parallel support.

Experience is Key

Having a Plan

Solutions. “It is understandable for

and quicker internal adoption. Another

In for the Long Haul

element is the level of integration with

Finally, strong post cutover support

back-end systems — will billing and loyalty

is also a vital component to a successful

systems, for instance, be fully integrated

dures as a part of its conversion practice

product capabilities,

departure control for Sabre Airline

the success of a system migration. For

recognized as an industry best practice,

in fact, unique,”said Sharon Hall,

president of airline reservations and

tional elements with heavy influence on

in airline migrations should work closely

reservations and departure control for

“Reservations and departure control

There are most certainly many addi-

Hall said. “Professional trainers skilled

offering leading Sabre Airline Solutions’ expertise in effective project organization and planning have given it leadership in large-scale system migrations.

While a knife-edge conversion is

and after the cutover.”

“It is true that every migration is,

of a strong customer-support model

the vendor should select a senior-level

cost control benefits and gained a

This is accomplished by planning

“The vendor’s commitment to

A Cut Above It is essential that a vendor be expe-

Working together to prepare for a cutover to a new reservations system can make the process relatively seamless.

This method also enables an airline to Nothing compares to the value of

cut over quickly — within one to four

conversion. Ongoing personnel training

with the new reservations system for

Once the project has been

hours of system downtime, depending

and on-site support should be provided

continuity during and after the migration?

airlines to have some level of anxiety

deep airline industry expertise and

appropriately scoped, a second key

in part on the airline’s current system.

until the new system is operating

associated with such a huge endeavor.

extensive experience when it comes to

to a successful system migration is

In addition, data integrity will be main-

smoothly. The vendor should be able to

selecting the right vendor to support

Although a very valid concern, the

system migrations. A vendor must first

excellence in project organization and

tained with no lost teletype traffic.

modify its support program to match

both an industry-leading system and

right partner can provide a low-risk,

be able to understand the unique needs

planning. Utilizing defined pre-migration

the needs of the airline according to its

a successful cutover experience.

low-customer-impact conversion.”

of the airline. The ability to effectively

methodologies with a series of “go/no-go”

level of experience and expertise.

(continued on next page)

34 ascend

“A knife-edge conversion approach requires that the vendor have a deep

There is much to consider when

april 2003

35


industry Having successfully managed more

regional

McMillan, managing director of

that Sabre Airline Solutions has in

than 30 cutovers since just 1998 — nine

Australia-based Flight West Airlines.

hundreds of projects for airlines of all

in 2002 alone — Sabre Airline Solutions

“Further, Sabre Airline Solutions under-

sizes. Continual improvement in software

has a proven track record of successful

stood our requirements; our timeframe

implementations and conversions. Its

for migration was short, they were able

history includes successful implementa-

to deliver the services required and

tions at Southwest Airlines, US Airways

most importantly, could demonstrate

(the largest systems conversion in the

that delivery was possible.”

history of the airline industry) and the

With more than 40 years of experi-

T H E

News Briefs from Around the Globe successfully managed more than “Having 30 cutovers since just 1998 — nine in

News from the Americas

and effort required for planning and budgeting airport

Unisys Corp., the information technology service

respond to changes by utilizing the system’s “what-if”

— a newly formed U.S. government agency — selected

analysis that evaluates the potential effect of any opera-

Sabre Airline Solutions’ resource management systems

tional changes. Existing Sabre Airline Solutions clients

to assist in the scheduling of more than 44,000 security

have reduced staffing requirements by up to 25 percent

screeners at airports across the nation.

through improved shift schedules with this technology

has a proven track record of successful

version in a merger environment). Sabre

Solutions, which manages the reserva-

implementations and conversions.

Airline Solutions also converted four

tions and departure control functions for

regional Australian airlines — Flight West,

more than 70 airlines in 23 countries

Skywest, Hazelton and Kendell airlines

worldwide, offers proven reservations,

programming and hardware upgrades

— in a rapid timeframe of 21 to 40 days

departure and inventory control systems

allows Sabre Airline Solutions to offer

rather than the typical 120 days.

technology with unparalleled conversions

the fastest possible passenger name

knowledge, experience and methodolo-

record conversion with the lowest

Solutions’ reservations for several

gies. No other supplier has successfully

number of PNR rejects in the industry.

reasons, including the company they

managed the migration and implemen-

Holly Cox is marketing communications

keep in other airlines — both in

tation of air transportation systems

manager for Sabre Airline Reservations

Australia and overseas,” said Scott

with the scale and degree of complexity

and Departure Control.

“We are working under very tight timelines and need proven solutions that work,” said Tim Bethea, a principal with Unisys U.S. Federal Government Group. “Sabre

News from Sabre Airline Solutions Sabre Airline Solutions was honored by The Airline

vıew

L E V E L

customers better compete in today’s marketplace,” said Barry Smith, chief scientist and senior vice president of

Group of the International Federation of Operational

Sabre Research. “Not only does this award verify that

Research Societies for its development of new resource

we are working at the leading edge of decision-support

planning capabilities for airlines. AGIFORS awarded

technology, but also that the result of our work is

Sabre Airline Solutions the prestigious “Best Technical Prize” for its development of the Sabre ® StaffPlan ™ resource planning system, a new shift-scheduling model

translating into valued industry-leading products for the airline community worldwide.” The mathematical optimization models powering the

that helps airlines manage personnel scheduling at

StaffPlan system are based on cutting-edge techniques

airports around the world. The offering is currently in

of discrete mathematics. The StaffPlan system utilizes

use by 20 airlines globally.

seven interlocking optimization models working

At its annual symposium, AGIFORS recognizes top contributions in the development and application of decision-support technology to the airline industry.

through increased cross-utilization. The StaffAdmin system provides a flexible platform for tracking employee outages, leaves of absence, atten-

of the airline industry combined with the technology

dance and scheduling issues. It then presents data that

that has proven results to improve airport operations.”

depicts scheduled coverage versus required coverage

Sabre Airline Solutions’ resource management sys-

necessary to maintain service levels. This technology

tems ensure that airports are staffed with the appropriate

has provided up to a 5 percent improvement in staff

number of screeners at every security checkpoint.

utilization through enhanced rostering and has increased

the locations is a key element to meeting the TSA’s goal

H I G H

and have improved staff utilization by up to 7 percent

Airline Solutions has the experience and understanding

“Having the right number of screeners at each of

News Briefs from Around the Globe

personnel. This technology enables analysts to quickly

provider for the Transportation Security Administration

ence in the business, Sabre Airline

T H E

L E V E L

2002 alone — Sabre Airline Solutions

former TWA (the largest systems con-

“Flight West chose Sabre Airline

vıew

H I G H

administrative staff productivity by up to 20 percent. In the next phase, Sabre Airline Solutions will

of making sure passengers don’t have to wait in security

implement the Sabre ® StaffManager ™ automated

lines for more than 10 minutes,” Bethea said. “The

staff allocation system, which dramatically enhances

ability to adjust these requirements in real-time as air-

airport-handling operations by facilitating real-time

port flow fluctuates is equally important. Sabre Airline

staff planning and management, specifically those

Solutions’ technology offers the TSA the ability to plan

events that may disrupt the scheduled daily assignments.

for and quickly make changes to staffing requirements

Customers using this system have reduced flight delay

at various airports, while ensuring passenger safety

costs by up to 5 percent and improved utilization of staff

and convenience.”

and resources by up to 25 percent.

In the first phase of the TSA contract, Sabre Airline Solutions implemented the Sabre

®

StaffPlan ™

staff fore-

“With more than 35 airlines and airport ground service providers using this technology for their airport

casting and planning system and the Sabre ® StaffAdmim ™

operations, we knew with the Sabre Airline Solutions

employee tracking and assignment system. The StaffPlan

systems we could get this technology implemented

system offers sophisticated staff forecasting and plan-

quickly for efficient management of federal screening

ning models designed to significantly reduce the time

personnel at the airport,” Bethea said.

together to solve complex shift-scheduling problems, delivering market-leading results in a matter of minutes. The system evaluates trillions of possible solutions

+count it up

Any company or academic organization involved with

to find the best possible result, ensuring that airlines

decision-support systems in the airline industry is

optimize their resource allocation and deployment. To

41

invited to attend and present its work. Sabre Airline

do this, Sabre Airline Solutions accurately estimates

research their vacation plans online —

trade transported in 2000 via air, repre-

passengers carried by Boeing 737

Solutions’ contribution was recognized from a field of

work requirements, examines historical data looking for

although only 4 percent follow through

senting 40 percent of the total

aircraft — the equivalent of the world’s

candidates that included American Airlines, Boeing,

patterns in a variety of inputs including arrival times,

by booking online

Continental Airlines, Delta Air Lines, Lufthansa and

and matches airline schedules with the desired customer

Massachusetts Institute of Technology.

service levels to provide robust and accurate work

“Our No. 1 commitment is to help our airline

36 ascend

— Percent of travelers who

2 trillion

— Amount of world

6.1 billion — Number of population

requirement estimates and scheduling solutions.

april 2003

37


regional

regional Latin America

Where the Rubber Meets the Runway

maintenance and supply chain

separate areas as individual modules.

management strategy by generating and

We redefine the complete supply chain

technologies such as a barcode system

receiving materials requests, processing

process from start to end and then look

for tracking and wireless capabilities

and creating the purchase orders.”

at the systems required.”

enabling maintenance personnel to

The carrier is also deploying new

remotely access data.

AeroMexico Puts M&E Strategy into Practice

“Part of the strategy for better and more accurate information involves the use of a barcode system for tracking, which the Maxi-Merlin system supports,”

By Giovanna Rosselli and Chris Evans | Ascend Contributors

Luis Carlos Vargas said. “This allows In the cradle of one of the oldest civilizations of the Americas, AeroMexico is actively preparing for the future. As AeroMexico continues to imple-

information to the appropriate mainte-

information regarding hours, shops,

for more convenient data capture and

nance and engineering personnel.

etc., is captured and registered.

tracking. And with wireless capabilities,

“Good maintenance planning and

“The information from the Maxi-

we want to bring information records to

control requires accurate information

Merlin system is the base of all of the

ment a comprehensive strategy for its

and a robust materials planning process

forecasting models that help to manage

maintenance and engineering operations,

ultimately leading to material reductions,

and plan all the activities for consumable

fully implemented much of its strategy,

the airline has already begun to benefit

cost savings and a more efficient

materials in the supply chain,” he said.

Luis Carlos Vargas said the airline will

from its innovative approach.

maintenance and supply-chain process,”

Using the Maxi-Merlin system, data

said AeroMexico Systems Vice President

is available system wide as soon as it is

Luis Carlos Vargas. “Accurate and reliable

entered, providing structured reports

information is the foundation of a good

and decision-support tools that enable

materials control process, providing an

the airline to make informed, business-

maintenance planning and “Good control requires accurate information and a robust materials planning process . . .

Like many maintenance and

the aircraft.”

critical decisions without delay. Various

and forecasting.

modules for different functional areas

“One of our key objectives in M&E

spanning the entire M&E operations “plug in” to the Maxi-Merlin system,

reliable maintenance and engineering

giving them access to the essential

control system that identifies and tracks

operation-wide data.

continue to evolve and explore new ways to improve its M&E operations. “One of our key objectives to

ideal source for high-quality planning

systems is to establish and maintain a

Although AeroMexico has success-

increasing the reliability and value of information has been successfully With a fleet of 70 aircraft ranging from DC-9 to Boeing 767-300ER, AeroMexico, the nation’s largest carrier, has a broad M&E operation that requires extensive coordination. AeroMexico uses the Maxi-Merlin system as the core of its M&E infrastructure.

achieved, but maintaining a high-level of information reliability is a neverending activity.” Technology plays a key role in ensuring long-term success for

AeroMexico also uses technology to

Long term, the airline is looking

AeroMexico, but when combining IT

engineering groups, AeroMexico’s

the data and activities associated with

achieve a short-term goal of developing

at other ways to streamline its M&E

with its staff of highly qualified experts,

M&E organization seeks to minimize

each aircraft component, including,

AeroMexico to allocate its reusable

production control — the consolidation

operations.

the airline is well positioned to prosper

inventory and optimize the supply

but not limited to, maintenance hours,

assets, such as cockpit voice recorders,

of data in one view so that a single

chain, maximize productivity while

work cards, etc. This systems infrastruc-

flight management computers, auxiliary

person has access on one computer

front, the goal is to minimize inventory

reducing maintenance costs, comply

ture provides the mechanism to

power units and engines, is the Sabre

screen to all maintenance aspects of an

ownership levels and investment and

competent people,” said Jorge Wheatley,

with regulatory requirements, and

capture reliable and comprehensive

Rotables Allocation Planning System, a

aircraft. An analyst would have a quick

support the maintenance production

AeroMexico’s chief information officer.

increase aircraft availability.

M&E information.”

flexible, data-driven tool that helps an

view of what maintenance needs to

plan with the needed service level,”

“The success of implementing IT and

airline maintain the minimum number

be performed, where it needs to be

said Adolfo Payan, material planning

getting the expected results requires an

lead at AeroMexico.

effort in cultural change. At AeroMexico,

But in accordance with its strategy,

At the core of that infrastructure is

One of the plug-ins selected by

®

AeroMexico is aggressively pursuing an

the centralized system that integrates

of aircraft parts needed to perform both

performed, and what resources and

integrated information technology solu-

the functions of materials inventory,

scheduled and unplanned maintenance.

materials need to be allocated to

tion that is capable of not only achieving

logistics, engineering, technical records,

As a decision-support module, the

complete it.

the airline’s goal, but also enabling it to

maintenance planning and production.

Rotables Allocation Planning System

remain on a forward-thinking course.

Since 1992, AeroMexico has utilized the

forecasts demand and determines station

Sabre ® Maxi-Merlin ™ maintenance,

allocations, minimizing inventory costs.

As the largest airline in Mexico, with a fleet of 70 aircraft ranging from

engineering and inventory system as

the DC-9 to the Boeing 767-300ER,

its base M&E solution.

AeroMexico has a broad M&E operation that requires extensive coordination.

“The Maxi-Merlin system is the

AeroMexico also uses other modules tailored for specific M&E functions. “We complemented the Maxi-Merlin

“On the materials management

today and in the future. “All of these initiatives rely on our

And beyond production control in

we have been working for the past five

heavy maintenance, line maintenance

years to achieve this change in order to

and shop maintenance, “staffing

remain the most punctual airline in the

AeroMexico will be able to look at

resources is our next objective,” said

world with top-level service standards.

any aircraft on the ground to determine

Ulises Perez, process development

M&E is an essential piece in achieving

whether a window of opportunity exists

manager at AeroMexico.

these goals; we consider M&E as a sub-

Through production control,

to perform maintenance.

“This is to ensure that the right

“The philosophy in the M&E

person is available at the right time and

nucleus of all the maintenance and

system’s modules of material planning

area has also gradually become more

the right place,” he said. “Also, we want

process of the production process.” Giovanna Rosselli is the Sabre Airline Solutions account director

supply chain systems from which all

and inventory control with an external

process oriented,” Luis Carlos Vargas

to focus on aircraft recovery to handle

M&E strategy is a centralized database

of the other systems are fed,” Luis

purchasing module,” Luis Carlos

explained. “We look at the entire

changes in operations, react quickly and

maintenance and engineering product

that provides necessary, real-time

Carlos Vargas said. “All of the detailed

Vargas said. “This module supports our

process end to end and not at the

yet comply with maintenance forecasts.”

manager at Sabre Airline Solutions.

A key component of the airline’s

38 ascend

for AeroMexico. Chris Evans is the

april 2003

39


industry

industry and the planes. Here passengers come

Drinking from the Grail

in and passengers go out, and airplanes

Leveling the Peaks

come in and go out, and they’re separate. That’s how we create the efficiency

de-peaked schedules, the logic quickly became apparent.

of always turning an airplane in a fixed

American Airlines De-Peaks its Hub and Spoke Structure By Stephani Hawkins and Scott Hunt | Ascend Editors A few years ago, as airlines

As American continued looking at

amount of time.” Even though American has intro-

“What happens is that although we traditionally scheduled peaks, we rarely

per aircraft per day, was only about 3 percent less than Southwest’s. The impressive results at O’Hare led American to de-peak its Dallas/Fort Worth International Airport hub in November. “At D/FW we saw basically the same

operated them,” Casey said. “Because

results — about a 5 percent improvement

duced low-cost concepts into its model,

the airports are incapable of handling

in our staffing based on de-peaking,”

it has still maintained its directional

the flights, the actual operation is flat-

Casey said. “In addition, because we

complexes.

tened. So we said, ‘If we operate that

could operate the schedule on four less

into peaks of arrivals and departures to

concept used by low-cost carriers —

way, maybe we should

gates at D/FW, it allowed us to consolidate

throughout the United States struggled

maximize connection opportunities while

standard fixed ground times.

schedule that way.’”

our operations down to two terminals

with on-time performance and other

minimizing passengers’ total travel time.

operational issues, American Airlines

By spreading flights more evenly

Rather than idling on the ground

way, American has realized a wealth of cost-savings and

gathered its top planning and scheduling

throughout the day, American combined

spoke waiting to fit into the return

experts and began a quest to devise

the efficiencies of a low-cost carrier like

complex, the airplanes are immediately

“the perfect schedule” to increase the

Southwest Airlines with the increased

returned to the air where they produce

airline’s reliability.

number of destinations available through

revenue.

What they found might just be the Holy Grail of flight scheduling —

a traditional hub and spoke model. Before implementing this new

And by operating that

for up to two and a half hours at the

reliability improvements. “Looking at the data in early 2001 was the impetus

“The airplanes arrive in O’Hare, they spend a fixed amount of time

for us to start looking at

from three. That added about another US$4.5 million of benefits a year. “De-peaking our D/FW hub has enabled us to remove 11 airplanes from the schedule while operating exactly the same number of departures,” he said. American also realized it could

these de-peaked schedules,”

apply the same concepts to its spoke

a schedule that decreases ground

structure a year ago at its Chicago

there, and they go out to the spoke,”

Casey said. “It started as a

operations.

times, but improves dependability;

O’Hare International Airport hub,

Casey said. “They spend a fixed amount

dependability issue.

that increases the number of departures,

American, at some points, had more

of time at the spoke, and they come

Eventually, as we got into it,

but decreases the number of gates; that

than 10 aircraft movements scheduled

back to the hub.

developed it and designed it,

implements standard fixed ground times

in a five-minute period during peak

“The airplanes go out in 51 minutes.

it became a cost initiative.”

like those

times — alone, more than the airport’s

It doesn’t matter when the passenger

A graphical representation of American Airlines’ schedule

used by low-

capacity.

arrives at the airport, the airplane

shows a reduction in the “peaks” of a traditional hub

ule, American needs fewer

structure.

gates and fewer airplanes to

cost carriers,

The key to

but maintains

de-peaking was

directional

capping the number

connecting

of aircraft arrivals

complexes

and departures per

By de-peaking the sched-

operate the schedule.

“We realized there was a secondary opportunity to de-peak spokes because

. . American has realized a “.wealth of cost-savings and reliability improvements. ”

“At O’Hare we can operate the “We’ve created hourly complexes

same schedule and same number of

the connecting complexes in the

at O’Hare. The flights arriving during a

departures with four less gates and five

de-peaked structure tend to be wider,”

minute, Casey said.

60-minute period connect to flights in

less airplanes,” Casey said. “Using less

Casey said. “Because the windows are

“In every three-

the following 60-minute period. It just

gates and filling in the valleys when

bigger, we could sequence the trips one

minute interval

alternates like that hour after hour all

there was no activity meant you could

after the other and still be directionally

there’s a maximum of

day long,” Casey said. “We have created

operate the schedule with less people —

correct in the complex. And that worked

idea to do this, I said it’s impossible,”

two big jet move-

a directional structure within this de-

there’s not as many gates needing to be

out better than we anticipated. We were

said Don Casey, managing director of

ments and a regional

peaked schedule. And we’ve found a

manned and not as much down time

able to decrease our gate requirement

capacity planning at American Airlines.

aircraft movement,”

way to maintain this structure and still

during the day. At hub and spoke com-

at spokes by 12 percent, a substantial

“But, in fact, it is possible.”

Casey said. “We

have the planes operate at fixed turn

plexes, people work like mad during the

savings in real-estate expense and the

times at both the hub and spoke. We

peak, and then they go over for coffee

people associated to do the work.

sequence these flights so we can always

and wait for the next one. With a

operate directionally correct so the flight

de-peaked schedule, it’s basically

achieved its original goal of improving

that leaves with the westbound bank

continuous activity throughout the day.

reliability by reducing congestion at

found in a traditional hub and spoke structure; that increases unit revenues, but decreases unit costs. “When someone first had the

never exceed five

Finding the Grail The magic formula involves

movements in any five minutes. That’s

Before de-peaking its hub structure at Chicago O’Hare International Airport, American Airlines exceeded the airport’s operational constraints during peak periods. After de-peaking, the airline was able to operate its schedule with four less gates and five fewer aircraft.

Smoothing out the schedule also

de-peaking the traditional hub and

a hard constraint.

spoke structure by flattening the arrival

And that’s what cre-

heading to the west coast turns around

As a result, we were able to operate the

the hub and improving on-time

and departure banks and reducing the

ates the flattening

at minimum turn time on the west coast

same schedule with less gates, airplanes

performance.

dead time between peaks.

of the schedule.”

always goes out in 51 minutes,”

and will always come back correctly in

and people.”

Casey said. “What we’ve done is

an eastbound complex. And likewise in

basically uncoupled the passengers

the other direction.”

Typically, network carriers try to squeeze as many flights as possible

40 ascend

Along with more evenly distributing flights, American applied another

According to Casey, after de-peaking, aircraft productivity, measured by miles

“With the operation running more reliably, we ended up with fewer (continued on next page)

april 2003

41


industry

industry

misconnects,” Casey said. “Our depend-

a factor than it was four or five years ago.

Sabre Airline Solutions, who describes

ability improved at O’Hare more than in

Other factors influence the decision on

himself as “a big fan of de-peaking.”

the rest of the system.”

which airline to choose — price, corporate

“The good news is that technology

Vaccari also suggested flight scheduling tools that provide “what-if” analysis. “You can make minor changes and

deals, frequent flyer programs, travel

provides you with the tools to evaluate

then run some incremental flights, or

agency incentives, etc. Those aren’t

this and assess for yourself if this is the

you can make macro, global or holistic

elapsed-time driven. You have to have

right thing to do or not,” Vaccari said.

changes and then analyze them to

increase in passenger connect times,

competitive elapsed times; you don’t

“This speaks to a sophisticated, automated

compare a new structure with an old

American found it was still competitive.

necessarily have to have the fastest

decision-support infrastructure suite.”

structure,” he said.

Trusting the Grail Although de-peaking leads to an

Casey said American has not

elapsed times. So for 11 minutes, those

Vaccari said three key tools can

Vaccari said he believes more carriers

received any negative feedback from

other criteria are going to drive the

help an airline successfully revamp its

will begin to look at de-peaking their

customers because of the increased

customers’ decision.”

schedule structure:

hubs based on American’s success.

elapsed time.

The additional 11 minutes actually

you will not lose a lot of the revenue,

such as the Sabre ® AirFlite ™

then you are getting potentially a ton of

decrease in misplaced

Schedule Manager — a tool with

cost savings,” he said. “I would even

bags and those kinds

multiple different graphical displays

argue that from the revenue side, you

of measures because

that enables airlines to view and

are not losing much at all because

the operation is more

manipulate schedules and update

what you are trying to capture at a

dependable,” Casey

them very quickly. Specifically, the

hub with a very peaked schedule

said. “The additional

ideal tool provides a hub view that

is marginal passengers. A peaked

11 minutes also

allows airlines to look at all inbound

structure is designed to try to capture

not cost effective. The counterargument

extra capacity to chase after these

allows extra time to

and outbound flights. It should include

the passenger traveling from small

is that you already have this capacity

marginal passengers.”

get the bags from one

reporting capabilities to measure how

station to small station.

anyway — you might as well fly the

flight to the next.”

many flights occur every 10 minutes,

“We’ve seen a

PASSENGER CONNECT TIMES INCREASE ONLY SLIGHTLY

“The revenue that you get from this

By de-peaking its hubs, American Airlines has reduced congestion at its gates. At Dallas/Fort Worth International Airport, the airline was able to consolidate its operations from three terminals to two and removed 11 airplanes from its schedule while operating the same number of departures.

has already exceeded American’s expectations.

30 minutes, hour, etc. It should also

passenger, say a US$400 fare, is just not

the bigger, better idea is to match

enable airlines to look at elapsed time

worth it. To push a US$400 passenger

capacity to demand — solve that

improved after it de-

and passenger connections.

through one, two, three, four stops is just

problem first rather than try to use this

peaked its schedule.

A network profitability tool, such as

“Because in these

the Sabre ® AirFlite ™ Profit Manager —

de-peaked structures

a system that evaluates the impact

we actually have a

making these changes has on prof-

little more flexibility

itability. Ideally the system would

in terms of where we

forecast traffic at the origin and

Casey said the de-peaked schedule

planes to get the extra US$400. I think

local share at O’Hare

In fact, American’s

“We were pretty concerned about

“If you buy the argument that

schedule development environment,

benefits customers.

Although the de-peaked structure “flattens” the schedule, American Airlines found the average passenger connect time increased by only 11 minutes. The airline also found the additional time improved reliability by giving more time to transfer baggage.

A highly automated, highly graphical

T H E

“The more we examined this concept, the better it got,” Casey said.

News Briefs from Around the Globe News from the Middle East

Services offered include: SM

vıew

H I G H

L E V E L

position the flights, we can tailor our

destination level and then analyze a

what de-peaking would do to connect

schedule a little bit better in a local

passenger recapture process to show

services to provide real-time trip information to its

number of flights to destinations worldwide,

times,” Casey said. “The average

market,” Casey said. “So we’ve seen the

how many passengers are expected

passengers 24 hours a day, seven days a week.

Flight inquiries — providing information on individual

connect time increased 11 minutes at

benefits at O’Hare and have held on to our

to fly each of these legs. Then the sys-

The solution will enable passengers to check flight

flights, including arrivals and departures.

O’Hare. The median time increased by

flow share as well; it’s up a little bit. We

tem would give an overall profitability

information via cell phones, e-mail and personal

seven minutes. It doesn’t sound like a

haven’t seen any deterioration in our flow

for the schedule, for a particular

digital assistants.

lot, but it may have significant impact

performance and a little bit of improve-

region, for a particular set of flights.

The Inform services are a powerful customer service

potentially on our revenue. We’re

ment in our local share performance.”

A fleet assignment tool, such as the

tool that proactively provides flight information such as

proactive service capability for our customers, and it

Sabre ® AirFlite ™ Fleet Manager —

schedule changes or delays, terminal and gate changes,

will make our operations more efficient by automating

coming from a scheduling environment,

Sharing the Grail

Gulf Air will use the Sabre ® Inform

mobile

Schedule inquiries — providing information on the

“Customers merely have to give their mobile numbers to the booking agent, call center or travel agent in order to obtain the service,” Sultan said. “This is an important

a tool that completes the very compli-

and cancellations as well as airport, airline, city and

manual processes and reducing service impact on our

Although this is a relatively new

cated process of fleeting a de-peaked

country security updates.

valued customers.”

concept for the airline industry, technol-

schedule. This optimization tool will

ogy is already available that can help

try to match capacity to demand.

that provides real-time flight status from 72 hours up

lengthening average connect times.

airlines de-peak their schedules, said

This tool should provide a solution

to one hour prior to departure time,” explained Tariq

The conclusion we reached is that today,

Renzo Vaccari, product manager for

that includes both the network

Sultan, assistant vice president, information technology

Oman and Qatar, is the first airline in the Middle East

a longer elapsed time is much less of

planning and scheduling products at

structure and the fleet.

for Gulf Air.

to introduce such technology.

which looked at traditional schedules, and the traditional hub and spoke structures focused on elapsed time. “We researched our exposure to

42 ascend

“Travelers can register for a trip reminder service

The Inform services represent the industry’s first lowcost, end-to-end branded notification service for airlines. Gulf Air, the national carrier of Bahrain, UAE,

april 2003

43


regional

regional Europe, Middle East and Africa

T H E

Next-Door Knowledge

News Briefs from Around the Globe

Locally Based Experts Assist EMEA Airlines

News from the Middle East Gulf Air, the national carrier of Bahrain, UAE, Oman

By Marcus Pearson | Ascend Contributor As changes in the airline industry continue at breakneck speed, it may sometimes prove difficult to know all

significantly enhances the airline’s customer service

the first Middle East carrier to utilize the TransVision

efforts and reduces operating costs for its FlyPass loyalty program.

analyzer, also uses two additional tools from the Sabre

Bruno Joannet, who currently support

Airline Solutions market data and analysis suite: the

clients using the Sabre

suite

expanded, adding resources in additional

of planning and scheduling solutions.

even all the right questions.

functional areas:

They have provided assistance to several

SM

Air Malta utilizes the Traverse system via the

Sabre ProVision MIDT processing service and the

Sabre ® eMergo ™ Web-enabled and dedicated network

Sabre ® WiseVision ™ sales expansion system.

solutions. The eMergo solutions, an applications service

®

the right answers — or, for that matter,

Air Malta has successfully implemented the

the Sabre ® TransVision ™ traffic flow analyzer. Gulf Air, flight scheduling — Maher Koubaa and

The Center of Excellence recently

News from Europe Sabre ® Traverse ™ loyalty management system, which

the business.

AirFlite ™

L E V E L

and Qatar, has signed a three-year contract for access to

decision-support tools properly support

®

vıew

H I G H

The TransVision analyzer is an affordable and easy-

provider model, eliminates an airline’s need for costly

Julie Moffatt, a subject matter expert

of the region’s airlines as well as led

to-use data mining system that provides airlines with

and complicated in-house data center infrastructure and

industry, keeping pace may seem a bit

in resource management, helped

the implementations of products from

detailed analysis of origin and destination data. Details

support. The implementation with Air Malta marked the

overwhelming. Fortunately, airlines

develop and implement the Sabre ®

the AirFlite solutions at Scandinavian

such as passenger travel patterns, segment, feeder

first expansion of the eMergo solutions into loyalty

don’t have to go it alone. Resources are

StaffPlan ™

Airlines System, Aeroflot – Russian

and onward traffic flows, and yield and cabin-class

management.

available to help airlines stay on top of

planning system and the Sabre ®

distribution can be found quickly. Utilizing the in-depth

the latest industry best practices as well

StaffAdmin ™

travel analysis, airline planning and scheduling

Sabre Airline Solutions’ technologies,” said Brian

as the latest information technology that

and assignment system while working

departments can modify and adapt flight schedules

Bartolo, director of loyalty management at Air Malta.

to fit traffic flow patterns. Because the system identifies

“With the addition of the Traverse system, we will

the most popular routes and transit points, airlines can

be able to provide FlyPass members with greater

target the best possible departure and/or arrival times

customer service than ever before. In addition, the

and maximize passenger loads, while increasing revenue

Traverse system provides greater efficiency for our

and potentially their market share.

agents in terms of time required for processing

With such uncertainty facing the

enables them to compete effectively. For airlines in Europe, the Middle

staff forecasting and employee tracking

for bmi. Julie was also fundamental in the design, development, testing

East and Africa, Sabre Airline Solutions

and initial implementation of the

has created a locally based Center of

Roster Maker module of the

Excellence, a group of subject matter

StaffPlan system.

experts who combine deep industry

Matthew Pearson, a subject matter

knowledge with extensive IT experience.

expert in crewing services, came

“airline industry, these experts

Having worked in the EMEA provide an understanding of the region’s unique environment and

Through the TransVision analyzer, Gulf Air will have

can help navigate through the

“We have gained tremendous benefits from

member information and the ability to perform other

access to a variety of ways to view potential market

duties. This type of automation is critical in our key

opportunities by extracting valuable transit information

international cities. Accessing these capabilities via

With their ability to identify not

from booking transactions in computerized reservations

the Web helps us better perform in today’s highly

only the problem but also the

systems and global distribution systems. This insight

competitive airline industry.”

to the Center of Excellence from

turbulence of changing conditions.

industry, these experts provide an

My Travel. Before that, he helped

understanding of the region’s unique

implement the Sabre ® AirCrews ™

environment and can help navigate

crew management system at bmi.

through the turbulence of changing

Chris Vokes, a subject matter expert

solution, these experts can provide

passenger flows, trunk-route feeding, onward traffic flows,

conditions. With their ability to identify

in flight operations, joined the Center

insight and assistance to help

time-of-day and day-of-week passenger distribution,

Create comprehensive promotional offers for new

not only the problem but also the

of Excellence after serving as the

route and airline preferences, codeshare impact on sales

services and routes and introduce new partners,

solution, these experts can provide

manager in charge of operations

figures, and cabin and yield distribution.

Directly target campaigns to travelers, maximizing

insight and assistance to help airlines

and crew teams at bmi.

determine the ideal course.

Lindsay Watson, a subject matter

Having worked in the EMEA airline

airlines determine the ideal course.

makes it possible for airlines to analyze transit-point

“We are looking forward to using the TransVision

The Traverse system benefits airlines by providing the ability to:

the potential of promotions,

analyzer as a logical progression from our already exten-

Track member activity and member response

expert in revenue management,

International Airlines, Iberia, Air Malta,

sive use of the WiseVision system,” said Alistair Rivers,

to promotions,

knowledge, these subject matter

also came to the Center of Excellence

Air France, Alitalia, Lufthansa, Air Algerie,

manager of network management systems at Gulf Air.

Recognize and reward their most loyal passengers,

experts can also help airlines apply

from bmi, where she worked as a

Brussels Airlines and Air Nostrum.

“The TransVision analyzer will give us more detailed

Manage members using a leading-edge customer

their technology to new processes

route analyst and supported the

and procedures. An airline considering

implementation and training for

starting codeshare agreements, for

version 5.0 of the Sabre

example, may not know how to

automated revenue management

implement them in its flight operations

system.

By combining industry and IT

software. The Center of Excellence can assist the airline to make sure its

44 ascend

®

AirMax ™

information on the markets where we and our competi-

service tool based on proven technology and input

Center of Excellence offer the region’s

tors operate. It will help us to make informed decisions

from a broad airline base.

airlines unique expertise tailored

on the development of our routes and services.”

The EMEA-based experts in the

specifically for their needs. Marcus Pearson is EMEA director

The new members of the Center

for the United Kingdom and

of Excellence join the local experts in

United Arab Emirates.

Under the terms of the agreement, Gulf Air will

The Traverse system is complemented by Sabre Airline Solutions’ partnership with Points International,

use the TransVision analyzer via the Sabre ® eMergo ™

which provides airlines with complementary tools that

Web-enabled and dedicated network solutions, an

allow members to exchange loyalty currencies between

application service provider offering.

airline programs and purchase loyalty points.

april 2003

45


industry

industry

Rising to the Challenge By Maximizing Their Networks, Traditional Carriers Can Return to Profitability for U.S. carriers during the past two

deliver up to five times the return of

for a successful O&D implementation

an O&D level and enhanced forecasting

only addressing O&D revenue manage-

remains the one of shifting operating

techniques to improve accuracy at a

ment. Ensuring consistency between

philosophies. The senior management

finer level of detail. The introduction of

capacity decisions, inventory control

buy-in and the active participation of all

such tools at airlines, such as American

decisions and O&D fares drastically

levels of the organization are key to

Airlines and Air France, has proven to be

reduces revenue leakage.

building the right foundation. External

critical in times like this. Air France, one

By Nejib Ben-Khedher | Ascend Contributor About 25 years ago, the deregulation

solve the fleet assignment problem at

and revenue enhancement.

The alignment of the organization

consultants can play an important role

of the first airlines to use Sabre Airline

and business process with the O&D

in ensuring the success of this venture.

Solutions’ bid pricing techniques on a

operational philosophy are critical

The consulting team needs to include a

portion of its network, has been one of

elements to consider along with the

mix of subject matter experts who have

the most successful traditional airlines

introduction of the O&D decision-support

been exposed to best practices and

during the current crisis. More than half

tools. In addition, the introduction of

process consultants who can structure

of Air France traffic flowing at its Paris

new performance indicators is key to

the change and assist the airline in

Charles de Gaulle hub is connecting

driving the right behavior. A fourth

managing it. The consulting team

of the U.S. market saw the emergence of

years. The temptation to move away

numerous low-cost carriers competing

from the hub system to a point-to-point,

within the scheduling area, airlines are

traffic, and it is, therefore, instrumental to

element of importance when introducing

engages in visioning sessions with

with cutthroat fares in key markets.

low-cost operation, again appears

mainly focusing on simplifying their

control the flow and not displace high-

O&D systems is the integration and

representatives from the airline’s

Traditional airlines witnessed record

tempting to major airlines.

operations. Hub isolation, reduced

yield traffic. Lufthansa and British Airways

consistency across airline functions,

functional areas that are broadly

fleet complexity at secondary stations

are two other examples of successful

as well as the definition of the right

impacted by the O&D change. Together,

information flow and interfaces.

they determine the airline gaps versus

losses aggravated by the recession in

The U.S. network airlines offer air

On the cost front, and specifically

the early ’80s. At that time, the hub-

service to more than 100,000 origin and

and de-peaking hubs are among the

introduction of O&D techniques. They

and-spoke model, which just came to

destination markets. Less than 20 percent

initiatives intended to ensure a

both use the O&D capabilities of the

maturity, was questioned. The major

of such services would be economically

smoother and reliable operation and

Sabre

airlines seemed to have no other

viable if served point-to-point. The

higher resource utilization. Also,

efficiently re-deploy their fleets to

alternative but to shrink their fleet and

situation is similar in Europe. Low-cost

capacity has been trimmed to better

better match capacity to O&D demand.

route structure, renegotiate their labor

carriers are confined to high-density

fit demand. It is, however, not enough

contracts, and reinvent themselves as

markets, where they can economically

to reduce the unit costs to the levels of

®

AirFlite ™

Fleet Manager to

British Airways returned to prof-

When implementing an O&D

the industry best practices and take

revenue management system, for example, airlines face several issues: Assignment of workaround O&D flows and not necessarily by traditional

“The battle for profitability will be waged on two fronts:

itability in 2002 and added frequencies

sectors (e.g., domestic/international),

their low-cost counterparts.

to its North American routes. Lufthansa

Emphasis on analytical skills and the

The battle is to be won

posted 790 million in operating results

assignment of a new breed of revenue

on the revenue front, by

(an increase of 172.4 percent year over

management analysts focusing

better leveraging their

year) for the first three quarters of 2002.

mostly on O&D forecasting,

into account the specificity of the

O&D networks and taking

It increased its winter capacity by

Closer integration with pricing

airline environment.

advantage of an even

13 percent, reinstating some international

(fare actions) and network planning

wider O&D base through

routes, opening new ones and increasing

(tactical fleet swaps) with common

to emerge from the current environment

global alliances.

frequency in key European markets. Its

goals and measurements,

stronger than they did in the last two

summer 2003 schedule will offer 8 percent

Empowerment of analysts and

crises in the early ’80s and early ’90s.

spoke structure has been

more seat kilometers on intercontinental

establishment of quantitative

They will need to focus on better

ation. As a result,

in place since the late ’70s,

routes and 3 percent more SKOs on

measures to evaluate analyst and

leveraging their unique network

American Airlines

only recently have network

continental routes than in the summer

team performance,

capabilities. The technology is available

airlines started changing

2002 timetable.

Move from top-down to two-way

to enable them to do so. Adopting the

goal setting.

right O&D operating processes will

low-cost. American Airlines, however, took a PEOPLE Organization

different path, utilizing the strengths of the airline network and introducing a

SYSTEMS Data Integration

plethora of innovations in the areas of marketing, information technology,

BUSINESS Process, Workflow Interfaces

fleet modernization, finance and labor cooper-

enjoyed nearly two decades of financial

VALUE

PERFORMANCE Measures & Reporting KPI

While the hub-and-

To capture full value from the introduction of O&D-based decisionsupport systems, airlines have reviewed the underlying organization, processes, performance measures and interfaces.

their approach to network

Today, a handful of network airlines

and commercial strength,

planning, scheduling,

have introduced O&D-based systems.

operating one of the most

pricing and revenue

The introduction of an O&D-based

cost reduction and revenue enhancement.

Network airlines have an opportunity

further enhance their chances to

Even with such airlines, the effort has

system faces technical challenges:

benefit from the marketing advantages

extensive domestic and international

offer high frequency. In addition, they

management to align it with the O&D

focused on specific areas, such as

data collection, scalability (size of O&D

of their network structure and global

networks from its Dallas/Fort Worth

have avoided major hubs where loyalty

structure. Recent advances in software

revenue management. Sabre Airline

data and complexity of optimization

alliances.

and Chicago hubs.

to the predominant airline plays an

applications enabled the airlines to bet-

Solutions estimates that the introduction

problems) and interfaces (e.g., reserva-

Nejib Ben-Khedher is senior vice president,

important factor. There is, therefore,

ter capture data, forecast and optimize

of a fully integrated O&D approach can

tions system). But the main challenge

The current downturn in airline business,

a large, high-yield market left for

at an O&D level. In the late ’90s, Sabre

caused by the compounding effect of

network airlines.

Airline Solutions introduced bid-pricing

Today, history is repeating itself.

multiple crises, has resulted in more than US$15 billion in combined losses

46 ascend

The battle for profitability will be waged on two fronts: cost reduction

techniques in revenue management

+count it up

Sabre Airline Solutions Consulting.

357,000 — Parts in a Boeing 737

applications, designed algorithms to

april 2003

47


regional

regional Europe, Middle East and Africa This trans-

A Brave New World Aeroflot Reshapes Itself to Compete in the Modern Marketplace By Barbara Childs | Ascend Contributor

publication efficiencies. This has

additional hardware and software infra-

formation has

provided us the ability to focus on

structure as well as internal IT resources.

already reaped

profitable destinations, improving

It also decreases implementation time,

substantial mon-

overall network profitability.”

giving the airline the immediate benefits

etary benefits for

During the last two years, Aeroflot

Aeroflot. In 2002,

has implemented the Sabre ® AirFlite ™

it quadrupled its

Profit Manager, the Sabre

net profit to

Fleet Manager and the Sabre ® AirPrice ™

final products through the library card

US$75 million,

fares management system.

agreement.

a significant The airline industry has undergone

Nikolay V. Egorov, Aeroflot CIO

®

AirFlite ™

“Since implementing the AirPrice

of product implementation on an accelerated time schedule. The airline will soon select the

“These solutions will not only

Like Russia itself, Aeroflot has

largest fleet upgrade undertaken by a

improvement

system, we have been able to strategi-

enhance our customers’ experience, but

numerous changes during the past few

been reinvigorated by the change to a

Russian carrier. The new aircraft will

from the

cally manage fares and more efficiently

also improve our competitive position

years, but perhaps no single carrier has

market-based economy, and the airline’s

replace the older generation airplanes

US$60 million

distribute fare information in our highly

through a long-term reduction in tech-

undergone a more radical transformation

energetic and boldly ambitious executives

in Aeroflot’s fleet of 111 aircraft —

loss in 1999.

competitive marketplace,” said Evgueni

nology expenditures, an increase in

in the last decade than Aeroflot –

have revamped the organization to

including 27 foreign-built planes. The

Bachurin, Aeroflot commercial director.

revenues and improved quality of service

Russian International Airlines.

compete forcefully in the airline industry.

airline remains Russia’s largest air

comprehensive

“enhance our customers’ experience, but also improve our competitive position . . .

Aeroflot is also in the process of AirMax ™

carrier, accounting for 68 percent of

revamping of its

implementing the Sabre

vestiges of the communist past. Aeroflot

international passenger flights to 103

IT, Aeroflot,

automated revenue management sys-

will soon re-brand the airline with a new

destinations in 54 countries.

which has

tem and the Sabre

been using the

Management System. In addition, the

The airline has phased out remaining

These solutions will not only

As part of its

unified color scheme for aircraft seating

Since 1999, Aeroflot’s executive

AirFlite ™

and adopt designer-style uniforms for

team has made great strides to revolu-

Sabre

its cabin crew. Moreover, this year, the

tionize the airline, with particular

Schedule

airline plans to replace its old hammer

emphasis in the area of information

Manager and the

and sickle logo.

technology. In January 2001, Aeroflot

Sabre ® AirFlite ™

®

SlotManager ™

For most of its history, Aeroflot,

®

AirMax ™

“For example, by moving to this nextgeneration revenue management system, we anticipate a 10 percent to 15 percent increase in forecast accuracy, which

to implement the Evgueni Bachurin, Aeroflot commercial director

Sabre ® AirPrice ™ Contract Composer as well as the Sabre ®

system since

AirServ™ aircraft pro-

enjoyed the benefits of its monopoly

1997, selected several additional tools

visioning system.

status as the sole airline providing

from Sabre Airline Solutions through an

service to the people of the vast Soviet

innovative five-year “library card”

the Contract Composer

Union — a status that earned it the

agreement, which enables the airline to

further assists us with

distinction at one point as the world’s

implement eight products from Sabre

facilitating the sales

largest airline.

Airline Solutions’ portfolio.

the contract evaluation

Egorov said selecting multiple

Union and its command economy,

solutions from a single IT partner

Aeroflot was thrust into the rough and

provides contractual, commercial and

tumble open marketplace, forced to

integration benefits. “It was key to us to select a

compete domestically and internation-

Group

to our passengers,” said Bachurin.

carrier has chosen

which traces its roots back to 1923,

With the 1991 collapse of the Soviet

®

“Implementing

and approval procedure,” Bachurin said. The AirServ system will be delivered through the

As part of its new image, Aeroflot has upgraded its in-flight food service to be more appealing to customers. The airline utilizes the AirServ system to coordinate its dining and cabin services.

ally like never before. But rather than

provider whose offerings span all of the

Sabre ® eMergo ™

long for the past, the Moscow-based

functional areas of our airline so that we

Web-enabled and

airline eagerly began transforming itself.

would have the benefits of an integrated

dedicated network

operation,” said Egorov. “The products

solutions, an application service

translates into a 2 percent to 3 percent

installed to date have given us better

provider delivery method. Aeroflot

increase in system-wide revenues when

management information for decision

officials said they chose this platform

we transition from leg-based to origin

making, assistance in optimizing the

because it provides remote access to the

and destination control.”

route schedules, and frequency and

system, which eliminates the need for

(continued on next page)

“We realized after the fall of the Soviet Union, followed by the meltdown of the Russian financial market in 1998, that we needed a significant repositioning

Since its transformation, Aeroflot is truly taking off — in 2002, it quadrupled its net profit to US$75 million.

and overhaul of nearly every facet of our operations,” said Nikolay V. Egorov,

The changes behind the scenes are

launched an ambitious IT agenda as a

chief information officer at Aeroflot. “At

even more significant. Aeroflot’s board

critical element of its transformation

the same time, cost reduction was high

of directors recently approved the leasing

strategy in an effort to address tactical

on our priority list.”

of 18 mid-range Airbus A-320s, the

and operational issues.

48 ascend

+count it up

50 — Gallons of paint to cover a typical Boeing 737 aircraft april 2003

49


regional

regional

Aeroflot, with its newfound energy and drive to technologically advance its

T H E

operations, the ambition to reduce costs

News Briefs from Around the Globe

and the spirit to makeover its corporate image, has shown that it plans to emerge

News from Europe and Africa

from its transformation as a strong, the global airline marketplace. Barbara Childs is the Sabre Airline

Aeroflot aircraft will soon sport a new, modern look to reflect the airline’s new image as a key competitor in the airline industry.

Solutions account director for Aeroflot.

Airlines have selected the new Java-based Sabre

®

builds upon 15 years of innovation, migrating its Qik ™

News Briefs from Around the Globe News From Sabre Holdings

vıew

H I G H

L E V E L

pacesetting capabilities to the Java platform. The Java

Developer Tool as a key component of their next genera-

edition of the tool not only provides a higher degree of

tion of customer service tools.

sophistication to end-user applications, but also gives

“We are excited about this opportunity to utilize the

T H E

L E V E L

The latest generation of the Qik Developer Tool

South African Airways and Lufthansa German

powerful and energetic competitor in

vıew

H I G H

users of the tool the benefits of Java, such as platform

new Java edition of the Qik Developer Tool,” said Petra

and operating system independence. Being able to

Bretthauer, director of customer care processes at

streamline and efficiently control data sources and

Lufthansa. “This product gives us the ability to have a

technology offers users of the Qik solution the power

very flexible application that allows for easy integration

to reduce costs and improve customer service.

open system environment. We look forward to continu-

into our company’s long-term architectural objectives.

ing our work with Sabre Holdings in implementing a

The Qik solution will help us adopt customer relationship

creation of its new travel technology platform with the

variety of innovative solutions that will result in signifi-

management processes quickly and will be an enabler

initial migration of its massive air pricing application to

cant customer benefits and competitive advantage for

of our CRM strategy at important touch points — our call

to provide electronic ticketing functionality through a

the HP NonStop™ platform.

Sabre Holdings and its partners.”

centers. Through the new advances, this development

global distribution system.

Sabre Holdings recently reached a milestone in the

The technology achievement is part of the new Air

Using HP’s open system, Sabre Holdings is able to

environment will allow us to provide a compelling

News from Asia Japan Airlines will use Sabre Travel Network tools

The functionality, which went live in Australia on

Travel Shopping Engine for the Sabre ® Passenger

leverage mainstream tools and development techniques

solution for our agents, allowing them to better serve

Feb. 24, will also be available through Sabre Connected

Reservation System and the Sabre ® Global Distribution

to rapidly develop new and unique shopping services.

our customers.”

travel agencies in the United States, Canada, Bermuda

System, a four-year program designed to migrate airfare

The system enables the company to significantly speed

pricing, schedules and availability from a proprietary

overall development time. For example, the develop-

mainframe system to the continuously available

ment for the air pricing application on the open system

that touches the customer is a responsibility we are

been available within Japan for Japan Airlines

NonStop server and database environment. The effort

was done entirely in C++ and Java and was developed

extremely serious about. The Qik solution has allowed

international reservations.

will benefit customers of Sabre Airline Solutions and

in an aggressive timeframe.

us to improve our productivity and reduce costs across

Andy Hayward, chief information officer of South African Airways, said, “Taking responsibility for anything

and Japan. E-ticketing for self-booking travelers has already

“The e-ticketing process developed by Sabre Travel

multiple business units. This upgrade will allow us to

Network is fully interactive, allowing agents to issue,

cation continuously updates about 20 million fare and

will provide the only nonstop capability in the industry

evolve our front-end interface into a more powerful and

refund, exchange, void and display online,” said Michael

rule records and 1.5 million schedules providing users

— in other words, virtually no downtime for our cus-

customer-focused tool. This will create a more pleasurable

Keating, chief executive officer, Sabre Pacific Pty Ltd.

with the most current data in the industry. The program

tomers, scheduled or unscheduled,” Murphy said. “It’s

experience for our customers and allow us to provide

can rapidly evaluate billions of potential fare combina-

the equivalent of changing a flat tire without stopping

services that our competitors only dream about. The

experience reductions in the cost of sales and improve

tions for each requested origin and destination, as well

the car, as both airfares and schedule data are con-

new Java edition of the Qik solution gives us the ability

operational efficiencies by reducing administrative

as nearby airports that may yield lower fares.

stantly updated while the system remains continuously

to swiftly adjust to meet new and upcoming changes in

manpower and enhancing productivity.

available.”

the marketplace without affecting the current operations.”

Sabre Travel Network. The powerful airfare pricing appli-

“In our first 60 days using our new NonStop servers, we had no downtime,” said Craig Murphy, chief

“We believe our open systems shopping platform

Sabre Holdings has a long history as the leader in

The travel industry’s leading reservations and airport

Travel agents using the e-ticketing functionality will

The solution will help JAL improve its airport check-in process, reduce the number of lost tickets and improve revenue reporting.

technology officer for Sabre Holdings. “This technology

operations research for airlines and the travel industry in

development solution, the Java-based Qik Developer

milestone reconfirms that we can achieve our goal to

general. Borrowing from techniques used in large-scale

Tool enables companies to easily create user-friendly

migrate a huge application with the scope and volume

optimization, the low-fare search algorithm can analyze

interfaces, improving the ability of reservations and

industry leadership position in the development and

of air pricing from a mainframe environment to an

several billion fare combinations, across dozens of

airport personnel to service customers. The Java edition

commercialization of electronic ticketing solutions,” said

open-systems midrange platform. It’s the next step in

connection points, in a few seconds. The search space

of the Qik solution, which includes the Developer Tool,

Akira Hisano, vice president reservations and ticketing

our ongoing plan to migrate applications to open sys-

includes flight schedules from nonstop up to four-

offers solutions that enable developers to rapidly build

procedures for Japan Airlines. “We are confident that

tem platforms helping create the next generation of

segment connections, with a variety of parameters that

graphically rich applications incorporating multiple,

the solution will provide us with an even more stream-

travel technology platforms for our customers.”

allow the user to control what is displayed. Unlike other

key data sources, all within an airline’s unique work

lined process and a reduction in our distribution costs.”

systems on the market, the system’s low-fare search

processes. The Qik solution helps facilitate CRM

HP NonStop Enterprise Division, said, “The NonStop

checks airline availability in real time, during the search,

strategies at the point of service by seamlessly placing

the functionality. Sabre Travel Network offers electronic

platform provides Sabre Holdings with unmatched lev-

and displays a list of itinerary options that are known

customer information at the fingertips of reservations

ticketing for more carriers and more markets than any

els of availability and scalability in a high-performance,

to be available for sale.

and airport agents.

other GDS.

Pauline Nist, vice president and general manager,

50 ascend

“We chose Sabre Travel Network because of its

Japan Airlines joins 45 airlines currently using

april 2003

51


regional T H E

News Briefs from Around the Globe News from Asia ABACUS Distribution Systems Indonesia signed a

vıew

H I G H

making contact

L E V E L

Achieve optimal operations

future article, change your address

uncomplicated format with logical entry sequences and

or add someone’s name to the

graphical representations.

mailing list, please send an e-mail

multi-million-dollar agreement to provide Indonesian Airlines with a suite of reservations and departure control solutions. Indonesian Airlines, which launched its first routes

and flight planning and scheduling operations.

international airport check-in system across its network.

Hawaiian is adding the new offerings to the Sabre ®

The systems are supplemented by a package of products

AirMax ™ revenue management system already in

from the Sabre ® Qik ™ business processing solution,

use at the airline. AirPrice ™ fares management system and the Sabre ®

Indonesian Airlines also chose Sabre ® AirOps™ Load

AirFlite ™ Schedule Manager, core products in the

Planning to ensure optimal flight operations.

company’s award-winning integrated suite of revenue

The airline, which aims to operate a fleet of more

planning software products. Sabre Airline Solutions

than 20 aircraft within two years, also signed a global

will deliver the AirPrice system to Hawaiian through

distribution system agreement with ABACUS — the

the Sabre ® eMergo ™ Web-enabled and dedicated

leading GDS in Asia — which will provide the airline

network solutions. ”We decided to implement the AirPrice system and the Schedule Manager because we wanted an integrated

Indonesian Airlines, said that the services provided

solution with robust functionality and decision support

by Sabre Airline Solutions and ABACUS, which is 35

that enables us to proactively make rapid, effective and

percent owned by Sabre Holdings, will help the airline

profitable decisions in an ever-changing and competitive

meet its aggressive expansion plans and succeed in the

environment,” said Glenn Taniguchi, vice president,

competitive Indonesian aviation sector.

schedule planning for Hawaiian Airlines. “Together, this

“Indonesian Airlines has moved into an exciting

industry-leading suite of products will enable us to build

time. Following the successful launch of our operations,

on the strong foundation of the AirMax system by man-

our goal is now to nurture growth in key markets and

aging our schedules, pricing and revenue management

continue our expansion profitably and be one of the

tightly and effectively from a network perspective.”

most competitive carriers in the region,” he said. Indonesian Airlines will utilize the Passenger and inventory functions. By virtue of being hosted in the

inventory controls for allocating seat inventory.

same environment as the ABACUS GDS, Indonesian

According to Taniguchi, the airline has realized benefits

Airlines’ distribution position will also be considerably

in terms of revenue maximization, enhanced decision

enhanced.

support, improved productivity, forecasting accuracy

with both the Passenger Reservation System and Load Planning. The Qik solution will enable Indonesian Airlines

and responsiveness, and reduced spoilage and oversell costs. “Accessing the AirPrice system via the eMergo solutions enabled us to minimize our upfront investment,” continued Taniguchi. “We also achieve a quicker return

employees to quickly and efficiently service passengers

on investment with all the benefits of sophisticated

by presenting passenger information in a consistent,

functionality and quicker time to market.”

52 ascend

at www.sabreairlinesolutions.com or contact one of the following Sabre regional representatives: Asia/Pacific Mike Baldwin Senior Vice President

proven

Level 9, Phillips Building 15 Blue Street North Sydney NSW 2060 Australia Phone: 61 2 8923 5230 E-mail: mike.baldwin@sabre.com Europe, Middle East and Africa Vinay Dube Vice President 23-59 Staines Road Somerville House Hounslow, Middlesex TW3 3HE, United Kingdom Phone: 44 20 8814 4540 E-mail: vinay.dube@sabre.com

as the airline’s central revenue management data repository and provides decision support to set optimal

passenger check-in capability. It is tightly integrated

of Ascend, please visit our Web site

First installed in 1997, the AirMax system serves

Reservation System for all its reservations, distribution

The ACSI system provides a faster, more simplistic

and services featured in this issue

Specifically, the airline is implementing the Sabre ®

capabilities that facilitate training and ease of use.

Rudy Setyopurnomo, president director of

more information about products

Solutions fares management and flight scheduling

Passenger Reservation System and the Sabre ACSI ™

with distribution across the Asia region.

wearelistening@sabre.com. For

Hawaiian Airlines has selected Sabre Airline systems to help better manage its fares distribution

tools designed to help develop rich graphical interface

message to the Ascend staff at

News From the Americas

in March 2002, recently implemented the Sabre ®

To suggest a topic for a possible

The Americas Walter Jacobs Vice President 1 E. Kirkwood Blvd. Southlake, Texas 76092

These are unprecedented times in the air transport industry. But there’s one thing you can count on. Sabre Airline Solutions will be here, providing innovative technology solutions for your toughest challenges. Just as we have through five decades — in good times and in bad — for more than 200 airlines worldwide. Times like these demand fresh thinking. Proven, ROI-based solutions. And a technology partner that can not only see the future, but can help you reach it. Times like these demand Sabre Airline Solutions. www.sabreairlinesolutions.com

United States Phone: 817 264 7657 E-mail: walter.jacobs@sabre.com


/ascend_2003_issue1