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Airline Distribution 2006. Welcome to Dublin!. Airline Distribution 2006 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.

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slide2

Airline Distribution 2006

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

slide4

“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

slide5

2005 Airline Losses May Triple Past EstimatesLisa DiCarlo, 01.24.05, 5:30 PM ET

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 2005

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 2004.  Citibank, another major credit card issuer, earns more profit than both Microsoft and Walmart.”

slide6

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 2004.  Citibank, another major credit card issuer, earns more profit than both Microsoft and Walmart.”

the airlines major cost centers
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
airline distribution costs
Airline Distribution Costs
  • Agency Commissions
  • GDS Fees
  • Credit Card Fees
  • Ticket Fulfillment
  • Reservations Support
credit card distribution costs
Credit Card Distribution Costs
  • Credit Card Merchant Service Fees
    • Expensive: 2-3%, on a € 5,000 ticket . . .
      • GDS Fee: € 3-13
      • Credit Card Fee: € 100-150

UATP “On-Us” transaction = 0% msf

the uatp network
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

the uatp network operates like other major payment networks

Authorise

transactions

Collect &

pass data

Card

Network

Accept

Form of Payment

for ticket sales

Establish

Accounts and

manage customer

Merchant

Issuer

Travel

Agents

Merchant

Airline

Issuer

Airline

The UATP Network Operates Like Other Major Payment Networks
uatp s role in the distribution process

. . . and solutions

6 - 8%

2 - 3%

1 - 2%

2-3%

1 - 2%

Self Booking Systems

GNEs

Alternate CRS

Direct Links

Electronic Ticketing

Lower Cost Cards

Direct Settlement

Travel Management systems

UATP’s Role in the Distribution Process

Each step has costs . . .

Access

Information

Make

Reservation

Make

Payment

Manage

Information

Issue Ticket

slide15

“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

slide16
ENJOY THE CONFERENCE!

Ralph A. Kaiser

President & CEO

Universal Air Travel Plan, Inc.

+1-202-626-4222

ralph.kaiser@uatp.com

uatp.com