Ancillary services:Ancillary services: What does the customer value?Moderator: Sebastien TOURAINEIATA e-services (100% EMD)

Singapore – 12 October 2011

Airlines Ancillary Services trend continues… 21.5 billion in 2010 (Source : Ideaworks – posted 47 airlines)

IATA e services initiative 100% EMD

VISION:

IATA e-services initiative 100% EMD

100% Electronic Miscellaneous Document (EMD) to enableairlines ancillar gro th thro gh all distrib tion channelsairlines ancillary growth through all distribution channels

IATA Board of Governors approved the launch of IATA e-services oa d o Go e o s app o ed t e au c o e se cesproject in 2010

IATA e-services next major IATA StB initiative after 100% ET Deadline: 100% EMD in IATA BSP by end of 2013 Deadline: 100% EMD in IATA BSP by end of 2013

Roadmap to 100% EMD by end 2013 More than 200 airlines committed to the deadline (representing 84% of

passenger volumes) 28 airlines are EMD capable today: 45 forecasted by end 2011

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28 airlines are EMD capable today: 45 forecasted by end 2011

End-2012: all committed airlines EMD capable

EMD live* in IATA BSP since Feb-11 End-2013: 100% EMD usage in BSP End 2013: 100% EMD usage in BSP

2010 2011 2012 20131st January 2014: end of vMCO/vMPD in IATA BSP=> 100% EMD

* A travel agency connected to the GDS has issued one EMD for one airline, reported in IATA BSP

Ancillary revenues Panel:Ancillary revenues Panel: What does the customer value?

Christian Herzog, SVP Marketing - Air France and KLM John Thomas, VP - L.E.K. ConsultingJohn Thomas, VP L.E.K. Consulting Jay Sorenson, CEO - IdeaworksCyril Tetaz, Head, Marketing – AmadeusBrendan Sobie, Senior Analyst – CAPA Center for AviationBrendan Sobie, Senior Analyst CAPA Center for Aviation

Panelist views: Ancillary trend Airline view: Air France / KLM

How to create a business model to reach a “ win – win” for customer

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o o c ea e a bus ess ode o eac a o cus o eand airlines?

Consultant view: Ideaworks - LEK Consultant view: Ideaworks - LEK Where the industry is going: is it a cycle? How much revenue can airlines generate as ancillaries?

System provider / GDS view : Amadeus How are you enabling airline ancillary growth?

8 Ancillary revenues Christian Herzog SVP Marketing Air France KLMChristian Herzog SVP Marketing Air France KLM

9 Airlines need sustainable profitability

10 Ancillary revenue is a key enabler for profitability

Airlines have different scopes for ancillary revenue

AFKL: revenue beyond the sale ofAFKL: revenue beyond the sale of tickets

à la carte feat res « à la carte » features commission-based products

11

Be different through ancillary products …

12

Offering a personalized travel experience

13 Offer product enhancements through paid options …

HIGH FARESOption

HIGH FARESAll included Option

Optionp

Option

Option

PERSONALIZED Choose your options,

li d i d

Option

Optionpersonalized price andexperience

BASIC FARESGet the basics free Core Product

14 Ancillaries, a win - win situation ?

Customer:Customer:Enhance my travel

iexperience

Airline : Additional high marginhigh margin services

15 fo

Sell everywhere, deliver everywhere

Panelist views: Ancillary trend Airline view: Air France / KLM

How to create a business model to reach a “ win – win” for customer

y

o o c ea e a bus ess ode o eac a o cus o eand airlines?

Consultant view: Ideaworks – LEK - CAPA Consultant view: Ideaworks LEK - CAPA Where the industry is going: is it a cycle? How much revenue can airlines generate as ancillaries?

System provider / GDS view : Amadeus How are you enabling airline ancillary growth?

Panelist debate:

Is the customer happy about this trend or is it the only way

What does the customer value? Is the customer happy about this trend or is it the only way

forward to achieve a sustainable profitability for airlines?

Does the customer really see any difference between airline models today?

How have ancillary strategies evolved and what is the next industry trend to will benefits customer? y