welcome to dublin! airline distribution 2006. great keynote speakers impressive executive panel ...
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Welcome to Dublin!Airline Distribution 2006
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
WHAT’S NEXT?
Agency fees . . . ?
GDS fees . . . ?
“If the airlines think GDS fees are expensive, wait until they start
looking at credit card fees.”
-- Richard Clarke, DirectorTravel Technology Group,
LtdAirline Distribution 2005Bangkok
American Express reports record earningsRevenue 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
2005 Airline Losses May Triple Past Estimates Lisa DiCarlo, 01.24.05, 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 2004. Citibank, another
major credit card issuer, earns more profit than both Microsoft and Walmart.”
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
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
Agency Commissions
GDS Fees
Credit Card Fees
Ticket Fulfillment
Reservations Support
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% msfUATP “On-Us” transaction = 0% msf
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
IssuerAirline
TravelAgents
MerchantAirline
EstablishAccounts and
manage customer
AcceptForm of Paymentfor ticket sales
Authorisetransactions
Collect & pass data
Card Network
Issuer Merchant
UATP’s Role in the Distribution Process
Each step has costs . . .
AccessInformation
MakeReservation
MakePayment
ManageInformation
Issue Ticket
6 - 8% 2 - 3% 1 - 2% 1 - 2%2-3%
. . . and solutions
Self Booking Systems
GNEs
Travel Management systems
Electronic Ticketing
Lower Cost Cards
Direct Settlement
Alternate CRS
Direct Links
The UATP Ownership Group Shareholder Airlines
“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 HilfmanSVP Continental AirlinesAirline Distribution 2003
San Francisco
ENJOY THE CONFERENCE!
Ralph A. KaiserPresident & CEO
Universal Air Travel Plan, Inc.+1-202-626-4222
ralph.kaiser@uatp.comuatp.com
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