Welcome to the XIIth Annual Conference

1
Welcome to the XIIth Annual Conference

• 29th 30th October 2003
• Crown Plaza, St James
• London

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Mr Horst Findeisen

• VP Commercial Star Alliance

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IATA What value?

• GEBTA 2003
• Horst Findeisen, VP Commercial
• Star Alliance Services GmbH
• 30 October 2003
• 10.00 10.45

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Change of Market Conditions
1) What are the new forces for change and
how will they affect us?
2) How will the airline industry betransformed?
3) How can Alliances meet the challenges to
take advantage of the opportunities?
5
Why Star Alliance?
Benefits
Network
History

• Before Star Alliance, global travel was complex
  and inconvenient.
• Connections were uncoordinated, problematic and
  time consuming.
• Frequent Flyer Benefits, including lounge access,
  did not extend beyond individual airline offerings

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The Evolution of Star Alliance
Benefits
Network
May 14 Air Canada, Lufthansa, SAS, Thai Airways
International and United Airlines launch the Star
Alliance network. October VARIG Brazilian
Airlines joins the Star Alliance network.
2000
1997
March The Austrian Airlines Group, comprising
Austrian Airlines, Lauda Air and Tyrolean Airways
becomes the 10th member of Star
Alliance. April Singapore Airlines joins Star
Alliance. July British Midland and Mexicana join
Star Alliance.
1999
March Ansett Australia and Air New Zealand join
the Star Aliance network. October With an
official Launch Event in Tokyo, ANA joins the
Star Alliance network and Singapore Airlines
officially gains Observer Status to join the
Alliance.
March Asiana Airlines joins the Star Alliance
network. April Spanair joins the Star Alliance
network. October LOT joins Star Alliance. May
US Airways application approved
2003
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Our Newest Member Just Came OnBoard
Benefits
Network
The Star Alliance Network continues to grow.
Destinations
55 Fleet
50 longhaul 5 shorthaul
45 Annual Passengers 2.8m Annual
pax revenue 553m Employees
4,100
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An Impressive Team Of Leading Brands
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A New Star Alliance Member - 2004

• Compare Lufthansa
• 222 mainline aircraft
• 49 m passengers
• 39,000 employees

• Hubs in Philadelphia, Pittsburgh, Charlotte
• 279 mainline aircraft
• 47 m passengers
• 40,000 employees
• Adding 100 destinations to the Star Alliance
  network

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The Leading Network
Benefits

• Compared to other alliances, Star Alliance offers
  today
• More flights over 10,000 non-stop flights
  daily an alliance member carrier flight takes
  off or lands every 4 seconds
• More places 128 countries and over 700
  airports
• Better connected via coordinated schedules at
  key hubs

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New Developments - Alliance Camps In Flux

• KLM teaming up with SkyTeam
• CO / NW likely to follow
• SkyTeam agressively promoting expansion, claiming
  to be the new No.1 in the world
• Swiss announced oneworld membership
• So, who is the true global alliance leader ?

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Answer Star Alliance Still No. 1

• Star Alliance remains the Worlds No.1 in all
  crucial criteria
• Total ASKs
• Total RPKs
• Passengers
• Destinations
• SkyTeam catching up, now the new No. 2
• oneworld downgraded to No. 3

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Global RPKs Star Remains In The Lead
KL/CO/NW joining
LX joining
Global RPK Share 2002
Source IATA WATS, 2002
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Star Alliance vs. SkyTeam Tomorrow
Star Alliance
SkyTeam CO/NW/KL
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Star Alliance vs. SkyTeam Intra-Europe Today
Star Alliance
SkyTeam old
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Star Alliance vs. SkyTeam Intra-Europe Tomorrow
Star Alliance
SkyTeam KL
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Change of Market Conditions
1) What are the new forces for change and how
will they affect us?
2) How will the airline industry be transformed?
3) How can Alliances meet the challenges to take
advantage of the opportunities?
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Heavy Impact From Low Cost Carriers
Unit Cost Comparison (US cents) (Stage Adjusted
to 950 miles - YE 2003 Q1)
Southwest 47 lower
Note US domestic only, source Form41
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... And Growing LCC Aircraft Orders

• 350 new LCC orders and options announced in Q2
  2003
• Incremental to 600 previously outstanding

Source United Airlines / GCW Consulting
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Aviation Transformation Is Irreversible

• LCCs broke with all rules...except aerodynamics
• New breed of airlines...
• New business model...
• All Non-IATA Members...
• Some IATA regulations had become an obstacle
  rather than a benefit for airlines
• LCCs are eating into mainline carrier market
  share and profitability !
• Mainline carriers must not ignore this !

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LCCs Innovative Distribution Channels
ATM
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Change of Market Conditions
1) What are the new forces for change and how
will they affect Airlines and Alliances?
2) How will the airline industry be transformed?
3) How can Alliances meet the challenges to take
advantage of the opportunities?
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Who Is Leading The Change?

• IATA ?
• Founded in 1919 for inter-airline cooperation
  with 57 members
• Brought structure to a new rapidly evolving
  industry!
• Today, 280 airlines in 130 states, 95 of all
  intl. scheduled air traffic
• Getting stuck in red tape?
• Agreeing to lowest common denominator?
• Individual Carriers?
• An Alliance?

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Some Star Alliance Examples Better Links, Better
Service
Network

• StarNet links member airlines computer systems
• It keeps passengers and information flowing
• Allows more E-transactions, e.g. Interline
  E-ticket, PNR-Servicing, Schedule, Operational
  Accounting Data Exchanges

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Accelerating Interline E-Ticket Solutions
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Cooperating With Our Travel Partners
BTI Switzerland Star Alliance - Key Account
Sales Workshop
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Cooperating With Our Travel Partners
Agent Educational Programme offered by Star
Alliance Italy
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Cooperating With Our Travel Partners

• Star Alliance Road show for Travel Agents in
  Austria
• Austrian CEO Vagn Sörensen attended
  personally.Thanking all the agents for their
  fine support of Star Alliance.
• All Star Alliance carriers were represented on
  stage

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Offering Joint Star Alliance Agreements

• Joint Star Alliance Agreements in place, tailor
  made- for agencies- for corporates
• Several Star carriers covered
• Lead carrier principle

Global Travel Solution
Easy Compliance
Simple Administration
One Agreement
One Face
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Do Work With Us!

• Lets jointly look at ways to streamline
  processes and take out cost.
• Together we can develop modern products and
  services which help both of us run efficient
  businesses.
• Our representatives are open for this dialogue.

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Thank you
Thank You