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Welcome to Dublin! Airline Distribution 2006.  Great Keynote Speakers  Impressive Executive Panel  New Airline Distribution Strategies  Data Privacy.

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Presentation on theme: "Welcome to Dublin! Airline Distribution 2006.  Great Keynote Speakers  Impressive Executive Panel  New Airline Distribution Strategies  Data Privacy."— Presentation transcript:

1 Welcome to Dublin! Airline Distribution 2006

2  Great Keynote Speakers  Impressive Executive Panel  New Airline Distribution Strategies  Data Privacy & Fraud Prevention  The Next Generation in Payment Models  Rise & Predominance of the OTAs

3 W HAT’S N EXT? Agency fees... ? GDS fees... ?

4 “If the airlines think GDS fees are expensive, wait until they start looking at credit card fees.” -- Richard Clarke, Director Travel Technology Group, Ltd Airline Distribution 2005 Bangkok

5 American Express reports record earnings Revenue increase driven by strong growth in card business Updated: 6:19 p.m. ET April 26, 2005 US$7.4 Billion Losses for Global Aviation in Airline Losses May Triple Past Estimates Lisa DiCarlo, , 5:30 PM ET Credit Card Industry Profits “The credit card industry is the most profitable one in the United States with annual earnings in the $30 billion range. Many people might be surprised to learn that a single credit card issuer - MBNA - earned 1.5 times more profit than McDonalds in Citibank, another major credit card issuer, earns more profit than both Microsoft and Walmart.”

6 Credit Card Industry Profits “The credit card industry is the most profitable one in the United States with annual earnings in the $30 billion range. Many people might be surprised to learn that a single credit card issuer - MBNA - earned 1.5 times more profit than McDonalds in Citibank, another major credit card issuer, earns more profit than both Microsoft and Walmart.”

7 The Airlines’ Major Cost Centers  Four major components  Fuel  Labor  Equipment  Distribution  The first three are hard to control  There is still room in Distribution to save money, however

8 Airline Distribution Costs  Agency Commissions  GDS Fees  Credit Card Fees  Ticket Fulfillment  Reservations Support

9 Credit Card Distribution Costs  Credit Card Merchant Service Fees – Expensive: 2-3%, on a € 5,000 ticket... GDS Fee: € 3-13 Credit Card Fee: € UATP “On-Us” transaction = 0% msf

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11 The UATP Network  Airline-owned “global corporate travel payment network” founded in 1936 and owned by 19 world airlines; first charge card, all accounts begin with “1”  Tool to lower airline distribution costs by eliminating or reducing credit card fees  Mission: to provide the best air payment vehicle in the market while lowering airline distribution costs UATP saves the airline industry approximately USD 200 million in credit card costs per annum

12 The UATP Network Operates Like Other Major Payment Networks Issuer Airline Travel Agents Merchant Airline Establish Accounts and manage customer Accept Form of Payment for ticket sales Authorise transactions Collect & pass data Card Network Issuer Merchant

13 UATP’s Role in the Distribution Process Each step has costs... Access Information Make Reservation Make Payment Manage Information Issue Ticket 6 - 8% 2 - 3%1 - 2% 2-3%... and solutions Self Booking Systems GNEs Travel Management systems Electronic Ticketing Lower Cost Cards Direct Settlement Alternate CRS Direct Links

14 The UATP Ownership Group Shareholder Airlines

15 “If you have a UATP program, you should be growing it. If you don’t have a UATP program, you should ask ‘Why not?’” -- Dave Hilfman SVP Continental Airlines Airline Distribution 2003 San Francisco

16 E NJOY THE C ONFERENCE ! Ralph A. Kaiser President & CEO Universal Air Travel Plan, Inc uatp.com


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