Future Trends in Airline Pricing, Yield. March 13, 2013

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1 Future Trends in Airline Pricing, Yield Management, &AncillaryFees March 13, 2013

2

3 THE OPPORTUNITY IS NOW FOR CORPORATE TRAVEL MANAGEMENT

4 BUT FIRST: YOU HAVE TO KNOCK DOWN BARRIERS! but it won t hurt much!

5 BEING A COMMODITY IN TRAVEL IS NOT GOOD

6 LOOK WHERE WE STARTED IT S TIME FOR A CHANGE A2 AE AO AWBA BV C7 CJ CV DJ E0 EA EMF4 FV GA BL A2 A3 A4 AE AF AH AO AP AP AW AX AY BA BB BC BV BW BX C7 C8 C8 CJ CK CL CV CW CX DJ DK DL E0 E1 E2 EA EC ED* EM EN EO F4 F5 F6 FV FW FX GA GB GB BL BM BM A5 A6 AH AI AQ AQ AZ B2 BD BE BX BY C9 CA * CM CN CY CZ DM DO E2 E3 EE EF EP EQ F7 F9 FY FY GC GD BN BN A7 A8 A9 AJ AK AK AQ AR AS B3 B4 B4 BF BF BG BZ BZ C0 CB* CC CD CO CP CQ D3 D4 D5 DP DQ DR E4 E5 E6 EG EH EH ER ES ET FA FB FC FZ G0 G1 GE GF GG BN BO BP A9 AA AB AK AL AL AS AT AU B4 B5 B6 BG BH BI C0 C3 C4 CD CE CF CQ CR CS D5 D6 D7 DR DT DU E6 E7 E7 EH EI EJ ET EU EV FC FD FE G1 G2 G3 GG GG GG BP BQ BR AB AC AD AL AM AN AU AV AW B6 B8 B9 BI BJ BK C4 C5 C6 CF CG CH CS CT CU D7 D7 D8 DU DV DV E7 E8 E9 EJ EK EL EV EV EW FE FF FG G3 G3 G4 GG GH GI BR BS BT

7 GETS TURNED INTO THIS A COMPETITIVE ADVANTAGE Confidential Copyright Farelogix 2013

8 TIME TO MOVE AWAY FROM COMMODITIZATION

9 TO A WORLD OF DIFFERENTIATION FOR YOU!

10 WHERE WE ARE AND WHERE WE ARE GOING The Problem Anonymous Selling Model: Airline doesn t know who the traveler is until after the sale is made; airline is prevented from delivering its value proposition and competing for a customer s business. Airline Host System (Availability) The Solution Personalized Selling Model: Airline knows who the traveler is and dynamically creates a relevant offer in order to truly compete for the customer. Airline Distribution Gateway (HostSystem System, FFDatabase Database, CRM, etc.) OAG (Schedule) GDS ATPCo (Fares) GDS (Or 3rd party) Travel Agency Online Travel Agency Travel Agency Online Travel Agency

11 UNIQUE CUSTOMERS, UNIQUE TRIPS MAKE OPTIONS AND CHOICES ESSENTIAL Content delivery may change but the travel management process remains unchanged

12 AND THIS IS IATA SNDC VISION Internet standard allows third party distributors to present full range of airline product choices to consumers Consumer asks airlines either directly or through an agent Airlines respond either directly, via agent, or other travel shopping portal Agents or third parties develop applications to help consumers compare and contrast complete airline offers Airlines can develop offers to meet individual customer needs Consumers can customize their own bundles. It s not rocket science, so why all the fuss? IATA Content Published w/ Permission 2013

13 WHAT DOES NDC MEAN FOR CORPORATE TRAVEL? Improved opportunity to meet traveler needs (and even some of the wants) Negotiate the travel experience not just the price Increased capability to leverage your asset (traveler base)

14 TRUE MYTH

15 Did You Know? Bundled Fares = optional services included with a base fare Unbundled Fares = a la carte. Both can be negotiated!

16 Want Vs. Need

17 TRUE MYTH

18 Unique Touch Points

19 Knowing Your Asset Do you have up to date, accurate information regarding the frequent traveler status of your employees on a supplier by supplier basis? What s it worth?

20 CTAB = Corporate Traveler Asset Base CTAB = Corporate Travelers + FF Program Are you leveraging your asset? +

21 WHAT S IN YOUR BUNDLE?

22 CORPORATE FARES

23 A LA CARTE SHOPPING

24 SEATS

25 SEATS

26 THIS ALL LOOKS GOOD, BUT HOW CAN WE GET THERE?

27 GATEWAY VIDEO

28 OH, THE PLACES THE GATEWAY CAN TAKE YOU Yield Management: A Win, Win

29 LFBU Video/Screenshots

30 OH, THE PLACES THE GATEWAY CAN TAKE YOU Do you skip the corporate tool and go straight htto a mobile app?

31 And when you EMD = are done Electronic Miscellaneous Merchandising Document EMD = purchase record and tracking document for each product/service purchased

32 Isn t there an easier way to get this data? EMD Merchandising Electronic Miscellaneous Document All data at time of transaction Supports both stand alone (tripindependent) and associated (consumed upon travel) purchases EMD s + POS integration = real time data capture

33

34 EMD IMAGE

35 OH, THE PLACES YOU WILL GO New degrees of pricing and reporting transparency Improved offers that tie directly to your travelers trip experience, needs, and wants Slf Self service recovery when you need it!

36 THANK YOU Jim DAVIDSON President & CEO

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