Star Alliance International Corp. · OTC:STAL
Star Alliance International — CEB June2005 indepth GNE briefing
11 slides from Star Alliance International's investor presentation, Jun 2, 2005
Slide 1: GDS Alternatives: In-depth press briefing
GDS Alternatives In-depth press briefing Nagoya 2 June 2005
Slide 2: Context
Context Distribution fees represent a significant cost to the airline industry New entrants to the GDS market (GNEs), direct connections to airline host systems, and other alternative distribution platforms have the potential to significantly reduce distribution costs for our members. Based on the c
Slide 3: Star Alliance Carriers collectively spending over USD $11 billion for distribution
Star Alliance Carriers collectively spending over USD $11 billion for distribution Total Mainline reservations, sales, advertising and Cost promotional cost, by category 2004 est. Description Q3 03 100% Media 8% Advertising & Personnel 2% 90% Promotions Loyalty Programs 2% 20% Other 7% 80% CRS / GDS
Slide 4: $2 Billion USD p.a. are paid to primarily four vendors in just one sub-category: GDS fees
$2 Billion USD p.a. are paid to primarily four vendors in just one sub-category: GDS fees Average fee per net segment is 4.27 USD (approx. 12.00 USD per ticket) A bouquet of additional fees rounds off the bill. Airlines struggle to lower cost - oligopolist GDSs keep raising their fees recent inc
Slide 5: GDS Market Shares
GDS Market Shares 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% Infini 4% 1% Source: MetaGroup estimates for 20
Slide 6: While there are many levers Alliance Airlines can take to reduce overall distribution costs…
While there are many levers Alliance Airlines can take to reduce overall distribution costs… Streamline and promote Reduce cost and achieve Establish lowest cost highest return on investment in low cost reservation direct channels indirect channels platform promote sales in Work with Star Alliance a
Slide 7: …Star Alliance focuses on establishing alternative distribution channels
…Star Alliance focuses on establishing alternative distribution channels A drastic reduction in GDS spend is a top priority for Star Alliance member carriers. Our member carriers view the current GDS value-price disconnect as a global issue – not just a U.S. carrier or point-of-sale issue. Star Alli
Slide 8: Moving forward
Moving forward Representing circa 28% of the global airline industry’s revenue volumes, Star Alliance intends to lead the industry to realize this cost saving opportunity. A series of member leadership meetings took place in the past three months in order to: Frame the issues Seize the opportuni
Slide 9: Implementation
Implementation We will introduce multiple lower cost alternative channels wherever they deliver customer benefits We will promote lower cost channels wherever it is practical We expect cost reductions of existing channels by introducing efficiencies Realize benefits of technology improvements
Slide 10: Next steps
Next steps Our objective is to have multiple alliance-based distribution channels Such channels need to be scaleable, economical, functional and global The initiative is neither anti-GDS nor anti-agent, it is rather pro competition and anti-dependency. Star Alliance will issue a single RFI in Ju
Slide 11: Next steps
Next steps Until end of this year, agreements will be struck with vendors wishing to work with us to set new industry standards in the area of distribution costs. This initiative complements the individual efforts that are already underway between GNEs and Star Alliance partner carriers. Using new t