air transport evolution 2011 by luis francisco
TRANSCRIPT
By
Luis S. Francisco
Algarve University, PortugalMarch 2011
Air Transport Evolution
and the new technologies,
GDS's, Internet, eDistribution,…
English version
Vice President, General Director, General Manager, Strategy
Director, Executive Director, Director of Marketing & Sales
Luis S. Francisco
of
Tour Operators and Travel Agencies
GDS’s (Galileo e Amadeus)
Airlines (Air Luxor, PGA-Portugália Airlines, Delta, Transbrasil,
Japan Airlines, TAP)
Czech Tourism, Algarve Tourism.
Extensive experience in tourism and aviation as:
Airlines EvolutionFrom…
and…
and…
To…
I’m a lucky guy!!!... For being an active part in the "revolution" operated in the aviation industry and tourism in general.
I started with dial phones, chips card, telex, billboards pionaises ...
Evolved to dump PCs working in network (like TAPmatic)
For the GDS (Galileo, Amadeus)
Internet ...
From aircraft with 100 to 250 seats to 600+ seats...
Reservations System
Some history
Talking abroad: the Telex
Telex… more modern
Did they use calculators?... Of course…
Documents to clients…
Computers appear…
«uau, man…»
… but always evolving…
And how about DB’s?…
In 1992, the high-tech CRS Galileo claimed with pride that it’s database had a size of 10 football fields ...
Today’s is just a room…
Mobiles appear…
«thank God…»
The early days of Air Transport
Lack of airports, so…
First intercontinental airplanes
… vs. today’s airplanes
Prominent Organizations in the Airline Industry
IATA - International Air Traffic Association between 1919
and world war II - International Air Transport Association since 1945
IATA* has two functions- Trade Association (technical, legal, financial, traffic
services and most agency matters);- Tariff Coordination (passenger fares and cargo
rates, agents' commissions).
*IATA only controls International flights
SITA, OAG e ATPCO xtenho em UK
SITA - Societe Internationale des communications aeronautiques
- Handles shared communication means, including network and devices (airlines, airports,…)
OAG - Official Airline Guide
- Contains the airline schedule information, so for every flight essentially:
- The departure and destination airports,- The departure and arrival times,- The flight number.
- OAG maintains an airline schedules database, which holds flight details for 1.000 airlines and more than 3.000 airports
ATPCO - Airline Tariff Publishing Company - Is a fare distributing company.. worldwide.
Air tickets
Issued manually, with many duplicates or coupons…
AGENCY IATA TICKET…
Issuing dept needed…
AGENCY IATA TICKET (Qantas auth)
IATA-BSP Ticket
Boarding Pass
Boarding Pass Check
ATB Tickets
eTickets
eTickets ---» Ticket Less
PNR / code only
Online Check-in
Home check-in
Mobile Check-in
Auto check-in at airport.
• Travellers and tourists started to seek and obtain information about:
• Products
• Prices
• Schedules
• and to book online (travel agencies, hotels, hotel chains, airlines, ...).
IT’s in Tourism and Aviation
The 60’s:
• Airlines begin development of computerized systems to manage information
• American Airlines and IBM join forces to create a CRS - Computerized Reservation System - SABRE
• Delta Air Lines launches DATAS (Delta Automated Travel Account System).
Historical development of IT’s in aviation
The 70’s:
• With the liberalization of air traffic in the U.S., other airlines create their own CRS's
• United Airlines creates APOLLO and TWA - PARS
• CRS's used only for private use of each airline
• CRS's placed in travel agencies in the U.S.
Historical development of IT’s in aviation
The 80’s:
• Need to Globalize the offer (hotels, car rental, cruises, concerts, shows, trains, ...)
• Appearance of GDS's
(Global Distribution Systems)
Historical development of IT’s in aviation
The 90’s:
• Interconnection of networks around the world...
• ... the Internet
• Airlines provide direct sales with Consumers.
Historical development of IT’s in aviation
Today:
• There are no limits ...
• ... we may not even know where are we going to...
• But we are sure we are going... fast!
Historical development of IT’s in aviation
What are GDS's:
• Systems that connect all vendors worldwide with their distributors (travel agencies, tour operators, consolidators, charter operators, ...)
• These become in its main users.
Global Distribution Systems
The integrated offering of GDS's:
• Information• Reservations• Database of customers and suppliers• Issuing electronic tickets• Booking of additional services: hotels, car rental,
cruises, concerts, trains, insurance, ...• Agendas• Trip Plans• Connection to multiple networks of airlines ... worldwide.
Global Distribution Systems
The main GDS's:
• GALILEO
• WORLDSPAN
• AMADEUS
• SABRE
• ABACUS
Global Distribution Systems
• United Airlines
• British Airways
• Swissair
• KLM
• US Airways
• Alitalia
Galileo
• Olympic
• Air Canada
• TAP
• Austrian Airlines
• Aer Lingus.
* no longer exists
*
• TWA
• Delta Airlines
• Northwest Airlines
Worldspan
*
* no longer exists
• United Airlines
• Lufthansa
• Air France
• Iberia
• SAS
Amadeus
and few time after
• Continental Airlines
• Finnair.
• All Nippon Airways
• Cathay Pacific
• China Airlines
• EVA Airways
• Garuda Indonesia
• Dragonair
Abacus
• Philippine Airlines
• Malaysia Airlines
• Royal Brunei
• SilkAir
• Singapore Airlines.
• GALILEO
• WORLDSPAN
• AMADEUS
• SABRE
• ABACUS
GDS's progress to ...
TRAVELPORT
Operational and strategic partnership
Electronic Travel MarketElectronic Travel Market
Suppliers AgenciesAgenciesServices
PaymentConsumer
Electronic Travel MarketElectronic Travel Market
Suppliers AgenciesAgenciesServices
Payment
Communication
Information
Consumer
Flight booking
NN2YFAOLGW25FEBYSU3M/TP
After reply
P1.FRANCISCO/LUISMR P2.ALMEIDA/CLAUDIAMRS
PH.289000000M.VEGETARIANT.123456789F.CASH...
Hotel booking
HOA25FEB-2NTLONDON/UIAccess to rack rates and corporate rates
HOA25FEB-2NTLONDON/UI@GBTAAccess to GEBTA special tariffs
Car booking
0CCRZINN1LIS 25FEB-28FEB EBMN
/ARR- 1000 /PUP- LIS /DO- LIS /DT- 1000
/RC- EQ /G- AV00000000000000 T...
A simple booking to AVIS with special rates
Direct Sales
Recasting the traditional channel of distribution
AIRLINES CAR RENTALHOTELS
INTERNET
CONSUMERS
Profound change in the market:
• Airlines develop their own websites
• Exceed GDSs
• Establish connections to sell directly to consumers.
Direct Sales
• Airlines force travel agencies to redefine their role and business model,
• ... going directly to their customers and dramatically reducing their commissions
• This new situation forced GDS's to create web interfaces
• ... this led to major players on the Internet, such as Travelocity.
Direct Sales: conclusion
The new GDS’s… Internet based
• Access to the final customer
• Transmission of information as per customer profile
• Easier and faster to make a sale
• Flexibility in providing information
• Via text, graphics, video, sound,…
• On pages with total flexibility.
Advantages of the Internet vs. GDS's
• Direct and selective marketing
• New interfaces and attractive tools
• Faster and effective processing
• New forms of payment
• Multimedia
• Brand consistency
• Always available 24 / 7 / 365
Opportunities the Internet provides
• Huge cost savings
• E-ticketing
• E-brochures, e-flyers, e-information
• Better communication
• All this, both at a external and internal level ...
Opportunities the Internet provides
Internet: some figures!!
42% of all online purchases are travel related
Travel & Tourism market: 1999: $2.1 trillion 2010: $4.9 trillion
(Source: Satellite Accounting Research)
Online Travel Booking 1999: $6 billion 2002: $30 billion 2010: +$60 billion (Source: PhoCusWright)
The Survival Strategies!
With the Internet
Consumer’s decision is more dispersed
Appearance of Low Cost Carriers
Democratization of air travel
...
Airlines pushed to form alliances to ... survive!
Airline Industry Value Chain
INBOUNDLOGISTICS
OPERATIONS OUTBOUNDLOGISTICS
MARKETING AND SALES
SERVICE
PROCUREMENT
TECHNOLOGY DEVELOPMENT
HUMAN RESOURCE
MANAGEMENT
AIRLINE INFRASTRUCTURE
-Financial Policy - Accounting -Regulatory Compliance - Legal - Community Affairs
Pilot TrainingSafety Training
Agent Training
In-flight Training
Baggage Tracking System
•Promotion•Advertising•Advantage Program•Travel Agent Programs•Group Sales
•Ticket Counter Operations•Gate Operations•Aircraft Operations•On-board Service•Baggage Handling•Ticket Offices
•Route Selection•Passenger Service System•Yield Management System (Pricing)•Fuel •Flight Scheduling•Crew Scheduling•Facilities Planning•Aircraft Acquisition
Information TechnologyCommunications
Product DevelopmentMarket Research
•Lost Baggage Service•Complaint Follow-up
•Baggage System•Flight Connections•Rental Car and Hotel Reservation System
Computer Reservation System, In-flight SystemFlight Scheduling System, Yield Management System
Baggage HandlingTraining
Flight, route andyield analysttraining
Airline system Components
Pricing And
Revenue ManagementSystem
MaintenanceAnd
EngineeringSystem
Flight OperationSystem
FinanceSystem
(load factor)Crew Management
SystemCentral Reservation
System
Airport ManagementSystem
Air CargoSystem
Business ProcessingSystem
(check-in, luggage)Sales and Marketing
System
HR ManagementSystem
CRM System
(customer behavior)
Internet and its importance for airlines
INTERNET EXTRANET INTRANET
ACESS TYPE OPEN CONTROLED PRIVATE
USED BY PUBLIC BUSINESS PARTNERSORGANIZATION
MEMBERS
TYPE OF INFORMATION
GENERAL SELECTIVE SHARE OWNER
The Survival Strategies!
Alliances, Spin-offs and Cross-Holdings
They are the largest and best strategy in terms of network expansion
Global alliances covering different continents and different markets
SkyTeam (11)
Star Alliance (26)
OneWorld (11)
The Survival Strategies!Alliances, Spin-offs and Cross-Holdings
Partnerships include :
sales and marketing, and operational
code sharing
schedule co-ordination
joint sales offices
ground handling and maintenance
combination of frequent flyer programs...
The Survival Strategies!Alliances, Spin-offs and Cross-Holdings… the top airlines
SkyTeam (11) Star Alliance (26) OneWorld (11)
Star Alliance
OneWorld
Sky Team
Low Cost vs “Healthy Quality” Carriers
- « How was the trip to Moscow? »- « Everything went well but I'm completely exhausted »
«... I'm completely exhausted »
Here's a phrase that users of Long Haul airlines no longer say or feel, quite the contrary.
While in EU, airlines follow a model of low-cost due to short flights of 2h to 2h30, the airlines flying out of Europe have opted for what I dubbed "Healthy Quality".
The Survival Strategies!
Important niche markets appear
Quit well used by some airlines
Going in the opposite direction of LCC.
Gulf and Far East
Airlines such as Cathay Pacific, Singapore Airlines, Malaysia Airlines, Thai, Ethiad, Emirates and Qatar Airways
Concern themselves more with the convenience and health of their passengers.
Take the Emirates and Qatar Airways example.
Aim: the high quality standard (not the quantity).
These companies have opted for Airbus, in particular, the series A330, A340 and A380, beside Boeing 777.
Planes with enormous space, comfort and high technology ...
... luxury oriented for a healthy and sophisticated way to travel:
Individual cabins with shower (1st class)spacious seats that transform into comfortable
beds, bars, restaurants, gyms ...
Luxury in every detail, from the tissues used on the seats to the size and quality of individual LCD’s and huge list of films and programs.
Special environment for transition zones
Aircrafts with lights system that simulate the time at destiny.
Air Canada
Etihad
Air New Zealand
Etihad
Air France
Eurofly
Lufthansa
Emirates
Emirates
Etihad
Etihad
Thai Airways
Singapore Airlines
Etihad
Ethiad
But not only in flight that there is the convenience and quality of these airlines.
The airport lounges are authentic places of luxury and health.
They are spaces that, just by itself, provide great relaxation and rest with spectacular surroundings as witnessed some of the photos from the terminal of Dubai
Airport terminals / Lounges
Compared with low-cost terminals
Compared with low-cost terminals
Emirates offers a five-star lounge - "Emirates Terminal 3" - with individual spaces for their customers to relax and rest. The spaces are varied, to work, read, or even meditate …
Spaces inspired by Arab and Asian themes with water and plants that enhance the feeling of harmony and wellbeing. Lavish facilities, having SPA - Timeless Spa - with several therapists offering beauty treatments, massage therapies in a soothing and tranquil environment
Two Zen gardens are part of the unique design to create an oasis of calm within the bustling environment of an international airport.
The Qatar Airways Premium Terminal at Doha has jacuzzi, showers, rooms with 2 beds, various types of massages, meals, games, playstation and many others ... high quality and... Absolutely free!
Speaking of airports ...
Speaking of airports ...
Questions? please email me at: [email protected]
Luis S. Francisco
Senior Advisor and Consultant in Tourism, Airlines, GDS's,
Hotels, Tourism Boards, Country Branding;
Thanks!