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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

Š 2009 Sabre Inc. All rights reserved.

wearelistening@sabre.com


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

A: Clearly, cost benefit and

Virgin Blue CEO Brett Godfrey

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


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

A: Clearly, cost benefit and

Virgin Blue CEO Brett Godfrey

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

MakingEveryDollarCount_APR_2003  

A P R I L 2 0 0 3AMAGAZINEFORAIRLINEEXECUTIVES INSIDE New Approach to Cost Reduction Provides Benefits American Airlines De-Peaks Its Hub an...

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