Star Alliance International Corp. · OTC:STAL
Star Alliance International — LSY LOI Press Briefing
16 slides from Star Alliance International's investor presentation, Mar 16, 2006
Slide 1: GDS Alternatives
GDS Alternatives Press Briefing Horst Findeisen Vice President Commercial Star Alliance Frankfurt, 16 March 2006
Slide 2: Distribution is a major cost block
Distribution is a major cost block Distribution fees represent a significant cost to the airline industry Alternative Content Access Platforms (ACAP) and direct connections to airline host systems have the potential to significantly reduce distribution fees for our members Based on the current dynam
Slide 3: GDS fees alone amount to two billion USD every year
GDS fees alone amount to two billion USD every year Worldwide average GDS booking fee is 12 USD per ticket. Star Alliance member airlines pay 2,000,000,000 USD p.a. to GDSs. While GDSs fees keep rising, airline revenues are not. A considerable share of the GDS fees is passed on as inducements to age
Slide 4: GDS fees are a global issue
GDS fees are a global issue Current disconnect between GDS price and value is a global issue – not just a point-of-sale issue in certain markets A dramatic reduction in Star Alliance members’ GDS spend is a top priority for the Star Alliance New entrants & new technologies offer significant savings
Slide 5: Market share analysis shows regional monopolies across the globe
Market share analysis shows regional monopolies across the globe USA / Canada Central / Europe / Asia / Pacific Global South America Middle East Average Amadeus 9% 38 % 49 % 15 % 26 % Galileo 21 % 6% 31 % 15 % 22 % Sabre 42 % 50 % 13 % 4% 24 % Worldspan 28 % 6% 8% 4% 14 % Abacus 19 % 4% Topas 4% 1%
Slide 6: GDSs dominate. Web sales growing.
GDSs dominate. Web sales growing. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% North America Central/South America EM EA Asia/Pacific GDS Online Source: MetaGroup estimates for 2003, based on interviews with GDS and airlines in 2004 Star Alliance Press Briefing, Frankfurt, 16 March 2006 Page 6
Slide 7: Legacy GDSs have a high cost structure
Legacy GDSs have a high cost structure $12 $4 $4 $5 Estimated Alternative Price level TMC Legacy Legacy Estimated inducemt GDS Fee GDS gross cost to from per ticket margin legacy GDS GDS Star Alliance Press Briefing, Frankfurt, 16 March 2006 Page 7
Slide 8: Star Alliance members have established credible benchmarks
Star Alliance members have established credible benchmarks ACAP* price quotes $3 $2 $1 $1 Current Benchmark Benchmark Benchmark Benchmark GDS Fee A B C D per ticket *ACAP : Alternative Content Access Platforms Star Alliance Press Briefing, Frankfurt, 16 March 2006 Page 8
Slide 9: Market forces may drive a content-for-economics model
Market forces may drive a content-for-economics model Cost/Ticket ($) ILLUSTRATIVE ONLY Tier Tier 33 Content Content Suite Suite •• Published Published Tariff Only Tariff Only Tier Tier 22 Content Content Suite Suite •• Published Published Tariff Tariff •• Corporate Corporate Agreement Agreement Con
Slide 10: A number of cost saving options have been identified
A number of cost saving options have been identified Introduce efficiencies in existing channels Technology improvements Renegotiate economics of expiring agreements Introduce lower cost alternative channels Encourage competition between channel technology suppliers Promote most competitive channels
Slide 11: Benefits are clear
Benefits are clear Party Benefits Travel Industry & Lower total cost in value chain Star Alliance Members & Considerable cost savings GNEs / ACAP & Market share growth Star Alliance TMC* Partners & Opportunity to share savings to facilitate platform transition & Preferential content offerings Star A
Slide 12: We encourage competition in the marketplace
We encourage competition in the marketplace In the past year, Star Alliance has fostered the adoption of new players and will continue to do so. We will introduce and promote lower cost alternative channels wherever they deliver customer benefits. This initiative is neither anti-GDS nor anti-agent,
Slide 13: Star Alliance has moved quickly in 2005
Star Alliance has moved quickly in 2005 An alliance-wide ACAP implementation workshop took place in May 2005 Following a United Airlines initiative, leading ACAP players discussed major aspects of their offerings with Star Alliance sales and distribution leaders. In June 2005, Star Alliance issued a
Slide 14: Implementation plans are being prepared
Implementation plans are being prepared Today, the third agreement has been signed with a vendor wishing to work with us to set new industry standards in the area of airline distribution. Utilising new technologies, Lufthansa Systems will improve our member carriers’ abilities to offer tailor-made s
Slide 15: Star Alliance Press Briefing, Frankfurt, 16 March 2006 Page 15
Star Alliance Press Briefing, Frankfurt, 16 March 2006 Page 15
Slide 16: ACAP platform: Star Alliance banks on the expertise of Lufthansa Systems
ACAP platform: Star Alliance banks on the expertise of Lufthansa Systems