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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

OCTOBER 2003

t o

n e w

h e i g h t s

EXTREME AIRLINE MANAGEMENT

A conversation with …

David Siegel, CEO, US Airways INSIDE

Traditional carriers launch low-fare subsidiaries

How airlines weathered "the perfect storm"

Cathay Pacific Airways’ crisis management process

© 2009 Sabre Inc. All rights reserved.

wearelistening@sabre.com


regional Asia/Pacific

Asia/Pacific Carriers Open a Portal expect that by the end of 2004, “ We almost 10 percent of travel bookings

Leading Asia/Pacific carriers team with Travelocity to launch the first region-wide online travel portal — ZUJI.

will be made online in Asia/Pacific, and we intend to be the leading portal in this space in our part of the world.

By Frank Fotea and Hans Belle | Ascend Contributors

S

ZUJI, which offers the region’s

Australia, Singapore, Taiwan and Hong

carriers are putting their footprint

most sophisticated online airfare search

Kong — allowing us access to over 30

on e-commerce in the region.

engine, aims to become a world-class

million Internet users — with more sites

Web site by providing its customers

to come.

With travelers in Asia/Pacific following the U.S. trend of booking

with an efficient, user-friendly environ-

travel online, the carriers have collec-

ment to plan and purchase travel online.

tively launched an online portal called

ZUJI draws upon Travelocity’s tech-

“ZUJI,” a Mandarin Chinese word that

nology and experience in the U.S. market

considerable benefits in terms of cost

loosely translates as “footprint.” The

and shares its resources across a large

of development and the ability to drive

site, which is a joint venture between

geographic region. Chief Executive

revenue from that development across

the Asia/Pacific carriers and Travelocity,

Officer Scott Blume is focused on one

multiple countries in the region. We

a Sabre Holdings company, is the only

goal — making ZUJI the preeminent

expect that by the end of 2004, almost

one-stop site dedicated to Asia/Pacific

online travel site in Asia/Pacific.

10 percent of travel bookings will be

travelers. The site — which offers

“Ours is the only online travel

Photo courtesy of ZUJI

ixteen of the leading Asia/Pacific

“We have taken world-leading technology and customized the offerings to local markets,” he said. “This gives us

made online in Asia/Pacific, and we

inventory from thousands of airlines,

portal with a regional network in

intend to be the leading portal in this

hotels and rental car companies —

Asia/Pacific whose core business is

space in our part of the world.”

enables travelers to easily search and

travel bookings in real time,” he said.

book the best values on flights, hotels

“To date, the ZUJI network comprises

its ability to quickly bring special deals

and rental cars.

customized, local language sites in

and content to market.

One of ZUJI’s unique strengths is

Scott Blume, chief executive officer for ZUJI, is positioning the Asia/Pacific travel portal, powered by Travelocity, to take advantage of a growing trend in the region toward online booking.

“We offer an extremely compelling

we can access between 20 to 25 million

in Australia and its home country in

proposition for our suppliers,” Blume

Internet users throughout Asia/Pacific

2002. A full marketing push began in

said. “We e-mail our members travel

each month. It’s a very fast and effective

August to build awareness and increase

deals that are tailored to match specific

method of bringing deals to market.”

the membership base. Even before the

interests, and we can mine our member

A user-friendly graphical user interface makes it easy for travelers to access the content of the ZUJI Web site, which includes thousands of airlines, hotels and car rental companies.

One of the many exciting features of the portal is the Flight Guru, which provides a host of search options for flights, including alerting passengers of free stopovers and enabling passengers to pre-select seats on certain flights.

Sam Gilliland, president and chief

database to reach travelers who have

executive officer of Travelocity, agreed

searched for specific destinations and

speed to market is a key benefit to the

contact them directly with customized

airlines that provide content for the site.

and personalized e-mails. We can also

“It is exciting to see how the airlines

offer site real-estate promotional space

are embracing ZUJI as a competitive

— all within a 24-hour timeline. It’s a

tool with its ability to bring fares to

short, sharp way of moving product.

market quickly,” he said.

Additionally, through our distribution alliances with Yahoo! and ninemsn,

push, however, the portal added sites

ZUJI, headquartered in Singapore, conducted a soft launch with Web sites

october 2003

63


regional Asia/Pacific

Asia/Pacific Carriers Open a Portal expect that by the end of 2004, “ We almost 10 percent of travel bookings

Leading Asia/Pacific carriers team with Travelocity to launch the first region-wide online travel portal — ZUJI.

will be made online in Asia/Pacific, and we intend to be the leading portal in this space in our part of the world.

By Frank Fotea and Hans Belle | Ascend Contributors

S

ZUJI, which offers the region’s

Australia, Singapore, Taiwan and Hong

carriers are putting their footprint

most sophisticated online airfare search

Kong — allowing us access to over 30

on e-commerce in the region.

engine, aims to become a world-class

million Internet users — with more sites

Web site by providing its customers

to come.

With travelers in Asia/Pacific following the U.S. trend of booking

with an efficient, user-friendly environ-

travel online, the carriers have collec-

ment to plan and purchase travel online.

tively launched an online portal called

ZUJI draws upon Travelocity’s tech-

“ZUJI,” a Mandarin Chinese word that

nology and experience in the U.S. market

considerable benefits in terms of cost

loosely translates as “footprint.” The

and shares its resources across a large

of development and the ability to drive

site, which is a joint venture between

geographic region. Chief Executive

revenue from that development across

the Asia/Pacific carriers and Travelocity,

Officer Scott Blume is focused on one

multiple countries in the region. We

a Sabre Holdings company, is the only

goal — making ZUJI the preeminent

expect that by the end of 2004, almost

one-stop site dedicated to Asia/Pacific

online travel site in Asia/Pacific.

10 percent of travel bookings will be

travelers. The site — which offers

“Ours is the only online travel

Photo courtesy of ZUJI

ixteen of the leading Asia/Pacific

“We have taken world-leading technology and customized the offerings to local markets,” he said. “This gives us

made online in Asia/Pacific, and we

inventory from thousands of airlines,

portal with a regional network in

intend to be the leading portal in this

hotels and rental car companies —

Asia/Pacific whose core business is

space in our part of the world.”

enables travelers to easily search and

travel bookings in real time,” he said.

book the best values on flights, hotels

“To date, the ZUJI network comprises

its ability to quickly bring special deals

and rental cars.

customized, local language sites in

and content to market.

One of ZUJI’s unique strengths is

Scott Blume, chief executive officer for ZUJI, is positioning the Asia/Pacific travel portal, powered by Travelocity, to take advantage of a growing trend in the region toward online booking.

“We offer an extremely compelling

we can access between 20 to 25 million

in Australia and its home country in

proposition for our suppliers,” Blume

Internet users throughout Asia/Pacific

2002. A full marketing push began in

said. “We e-mail our members travel

each month. It’s a very fast and effective

August to build awareness and increase

deals that are tailored to match specific

method of bringing deals to market.”

the membership base. Even before the

interests, and we can mine our member

A user-friendly graphical user interface makes it easy for travelers to access the content of the ZUJI Web site, which includes thousands of airlines, hotels and car rental companies.

One of the many exciting features of the portal is the Flight Guru, which provides a host of search options for flights, including alerting passengers of free stopovers and enabling passengers to pre-select seats on certain flights.

Sam Gilliland, president and chief

database to reach travelers who have

executive officer of Travelocity, agreed

searched for specific destinations and

speed to market is a key benefit to the

contact them directly with customized

airlines that provide content for the site.

and personalized e-mails. We can also

“It is exciting to see how the airlines

offer site real-estate promotional space

are embracing ZUJI as a competitive

— all within a 24-hour timeline. It’s a

tool with its ability to bring fares to

short, sharp way of moving product.

market quickly,” he said.

Additionally, through our distribution alliances with Yahoo! and ninemsn,

push, however, the portal added sites

ZUJI, headquartered in Singapore, conducted a soft launch with Web sites

october 2003

63


regional

regional Asia/Pacific in late 2002 in Taiwan and Hong Kong,

ture that allows members to select five

and it is looking to add sites in Korea,

preferred destinations and to be notified

Travelocity have met the unique needs of

Malaysia, Brunei and New Zealand in

via an automated e-mail message or on-

the Asia/Pacific marketplace. Travelocity

the next several months. ZUJI officials

site updates when a flight to a specific

quickly realized it could not merely

The unequaled ZUJI sites built by

Capitalizing on Consolidation

destination meets a pre-set price criteria.

are not only actively building “ We a regional network, but a strong and compelling brand …. ”

This gives ZUJI members the advantage of being the first to know about inventory-controlled promotional deals.

After its merger with two smaller airlines, a larger, more competitive China Eastern Airlines looks to draw on its new strengths to become a more dynamic factor in the world airline industry.

Sweet Sixteen

“The outcome is ‘win-win,’” Blume said. “Our members learn of deals to

Sixteen leading Asia/Pacific airlines have

said the response to the soft launch

places they are interested in traveling

joined with Travelocity to form ZUJI, a

indicated that Asian markets are ready

to, and suppliers have access to a

one-stop travel portal for the region:

to embrace online travel. Once the

targeted audience.”

By Hans Belle and Peter Wu | Ascend Contributors

All Nippon Airways

effects of the conflict in Iraq and the

Combining the expertise of the

outbreak of severe acute respiratory

region’s leading airlines and Travelocity

Cathay Pacific Airways

syndrome diminished, the portal’s book-

enabled ZUJI to overcome a number

China Airlines

A

ing levels quickly increased, exceeding

of challenges, including the region’s

EVA Airways

changes, many experts and analysts

pre-SARS levels.

multiple languages, currencies and local

Garuda Indonesia

have spoken of a need for carriers to

laws. ZUJI worked with Travelocity’s

Dragonair

consolidate their operations to increase

elers choosing to book and buy flight,

Sydney-based development center to

Japan Airlines

competitiveness.

hotel and car rental content from ZUJI,

create country-specific sites in native

Japan Air System

and we anticipate that this trend will

languages using local currency with

Malaysia Airlines

largely an abstraction for much of the

continue,” Blume said. “We’ll soon

secure transactions through VeriSign

Northwest Airlines

world, in China it is already a reality.

reveal a new hotel booking path, which

Payflow. To date, ZUJI offers sites in

Philippine Airlines

Three years ago, the Civil Aviation

has been designed and developed in

three languages (including two varia-

Qantas Airways

Administration of China announced

conjunction with Abacus. We have a

tions of Chinese) utilizing four Asian

Royal Brunei Airlines

that it would merge 10 of the nation’s

dedicated commitment to constantly

currencies. ZUJI also has adapted to

SilkAir

airlines into three roughly equal groups

improving the site and ensuring our

the local markets, which have different

Singapore Airlines

in order to strengthen the domestic

customers have the best technology

levels of development and infrastructure

United Airlines

industry. Each group would be centered

and travel tools in Asia/Pacific.

to support e-commerce, such as the

on one of the nation’s three main carri-

penetration levels of credit cards and

ers: Air China, China Eastern Airlines

“We’re seeing more and more trav-

“We are not only actively building a regional network, but a strong and compelling brand, which features our

costs of Internet access. The state-of-the-art net fare booking

transplant technology and business systems from the United States without

s the worldwide airline industry continues to undergo dramatic

While airline consolidation remains

Executives from China Eastern Airlines and Sabre Airline Solutions announce an agreement for the airline to use the technology provider’s flight operations suite to help integrate its airline operations center.

and China Southern Airlines. Now, with its consolidation largely

Shanghai-based China Eastern has

the resources to compete more effectively.

‘Travel Guru’ personality,” Blume said.

engine, powered by Travelocity, was also

finding innovative ways to address the

complete, a restructured China Eastern

“set off for a new future,” company

As a result of the consolidation, China

“We’re experiencing consistent growth

developed specifically for the region.

region’s unique landscape. ZUJI, with

Airlines is poised to further raise its

officials said.

Eastern has approximately 40 percent

the knowledge and support of the

profile on the international aviation

in all of our markets.”

Gilliland said the partnership holds great promise for the future.

outcome is ‘win-win.’ Our “ The members learn of deals to places they are interested in traveling to, and suppliers have access to a targeted audience.

“Travelocity pioneered the online

region’s leading airlines and unmatched technology from Travelocity, is uniquely

travel space, and we have more than

positioned to meet the challenges of

seven years’ experience in the world’s

providing online service to the region’s

most competitive online travel market —

traveling public.

the United States,” he said. “We have learned that success in this industry

Frank Fotea is Travelocity’s

is driven by continuous investment in

vice president Asia/Pacific.

technology and the customer experience, ZUJI’s travel tools are designed to

focused marketing and distribution,

enhance the customer experience. Its

and great value content. ZUJI has

“Price Guru” tool is a customized fea-

these ingredients.”

64 ascend

Hans Belle is vice president of marketing, Asia/Pacific for Sabre Airline Solutions.

a result of the consolidation, “ AsChina Eastern has approximately 40 percent of the domestic Chinese aviation market.

Before the consolidation, the “huge

of the domestic Chinese aviation mar-

number, small size and lack of core competi-

ket. The combined China Eastern group

tiveness” of the nation’s multiple domestic

controls ¥47.3 billion (US$5.7 billion) in

carriers hampered the growth of China

assets, including 142 aircraft. The group

Eastern and other Chinese airlines, the

also has a combined 25,000 employees,

company said. Consolidation has helped

and it serves destinations throughout

China Eastern “achieve rapid expansion,

China as well as Asia, Europe, America

implement its business diversification

and Australia.

landscape and also to take advantage

strategy and form new mainstay lines

of events such as China’s entry into the

of business, thus becoming the new

the airline predicts it will have 180 large-

World Trade Organization.

starting point for future expansion.”

and medium-sized passenger and cargo

Through consolidation with China Northwest Airlines and Yunnan Airlines,

Consolidating with two smaller carriers has given the combined airline

By 2005, thanks to consolidation,

aircraft generating ¥24 billion (US$2.9 billion) in revenue.

october 2003

65


Asia-PacificCarriersOpenAPortal_OCT_2003