Sabre Airline Solutions Advises AACO and Six Arab Carriers on the Creation of a Pan-Arab Airlines Alliance, ``Arabesk''; Consult
01 June 2005 - 10:00PM
Business Wire
Sabre Airline Solutions and the Arab Air Carriers Organization
(AACO), in close coordination with six Arab airlines, are studying
the creation of a new ground-breaking alliance. Egypt Air, Gulf
Air, Middle East Airlines, Oman Air, Royal Jordanian Airlines and
Saudi Arabian Airlines are participating in the study to create
"Arabesk," the first airline alliance that coordinates the
schedules of six close competitors. The goal of creating this
pan-Arab alliance is to provide financial benefits that the
carriers could not achieve individually. According to Nejib
Ben-Khedher, senior vice president of the consulting group at Sabre
Airline Solutions, "There has always been a collective wisdom that
close competitors in a region cannot cooperate effectively because
they compete for the same passengers. Arabesk challenges this
perception by ensuring that the cooperation occurs on schedules,
while allowing free and open competition on pricing between the
members for the pool of passengers. We expect this to actively
stimulate the growth of traffic in the region and improve the
market share of each of the members." These benefits are being
achieved by providing better separation of services, reducing the
duplication of capacity, linking networks and destinations,
generating market demand through improved customer connectivity and
maximizing capacity through route sharing and rationalization. The
combined network of the six carriers totals over 5,000 departures
each week reaching from North America to the Far East, giving vast
potential to the alliance. "AACO is very pleased to work with Sabre
Airline Solutions in establishing this model that improves the
linkages between the networks of six of our key members," said
Abdul Wahab Teffaha, Secretary General of the AACO. "Arabesk is an
innovative initiative which will strengthen the competitiveness of
our members as a whole and provide better connectivity for
travelers throughout the world and within the region. While many of
the airlines involved in this alliance were competing with each
other, larger, more powerful airlines and alliances were being
established and set to grow. "With the creation of Arabesk, these
airlines intend to cooperate and compete directly with larger
carriers/alliances with a combined network, while still competing
with each other for passengers based on a competitive pricing
policy. Passengers will therefore be attracted to Arabesk because
of its network coverage and the competitive prices. This is a truly
smart solution to a real problem that has eluded resolution by the
industry," Teffaha further noted. Arabesk is being created on a
strong analysis base. Sabre Airline Solutions is using its AirFlite
suite of advanced network analysis tools, including Schedule
Manager, Profit Manager and Fleet Manager in order to optimize the
schedules of the six participating carriers. In addition, Sabre
Airline Solutions is using its unique data sources, including its
Global Demand Dataset ("GDD") to ensure that the forecasted
benefits are achieved. "Our tools are being used in an innovative
manner to create one 'virtual schedule' that combines the networks
of the participating carriers. By optimizing this schedule, the
most profitable network for all of the carriers can be determined,"
says Ben-Khedher. "AACO is dedicated to bring benefits to its
members," Teffaha continued. "In the past, these benefits have
focused on cost reductions and creating supplementary revenues.
With the creation of Arabesk, AACO is helping its members to grow
market share and stimulate revenues. We trust that this will
benefit the participating carriers and their passengers." "This is
also a great opportunity to leverage our relationship with AACO to
create increased synergies within the region, added Ben-Khedher.
"Unlike global alliances where major players drive the strategy,
Arabesk will treat each participating carrier as equal and the
whole as if it were one 'virtual airline.' The common brand has the
ability to improve the profitability of each member by increasing
revenues while reducing costs. AACO is key to the success of
Arabesk, because this industry body will help resolve disagreements
while ensuring that all participants have an equal voice in the
alliance". "Arabesk is ultimately about successful growth and
profitability for our members," said Teffaha. "Therefore, we
welcome additional participants who add value to the alliance. With
the help of Sabre Airline Solutions, we are hoping to forge
something truly unique and ground-breaking for the industry." The
establishment of the Middle Eastern virtual alliance further
expands Sabre Airline Solutions' presence in the region following
recent contract announcements with Gulf Air, Egypt Air and Oman
Air. About Sabre Airline Solutions Sabre Airline Solutions, a Sabre
Holdings company, is the world's largest provider of software
products; reservations, departure control systems and other
passenger management systems; and consulting services that help
airlines simplify operations and lower costs. Sabre Airline
Solutions' proven leadership is demonstrated by the growing number
of airlines that leverage the technology and services: More than
200 airlines worldwide use Sabre Airline Solutions' broad portfolio
of smart solutions for decision-support tools to increase revenues
and improve operations. More than 500 contracts worldwide were
signed in 2004 for Sabre Airline Solutions' leading technology
solutions. More than 100 airlines worldwide rely on Sabre Airline
Solutions for passenger management solutions, with eight new
carriers choosing SabreSonic, the first new generation reservations
system offered in the market, in 2004 and six carrier renewals. In
addition, more than 100 clients worldwide have turned to the Sabre
Airline Solutions consulting group for strategic, commercial and
operational consulting. Sabre Holdings Corporation (NYSE:TSG) is a
world leader in travel commerce, retailing travel products and
providing distribution and technology solutions for the travel
industry. More information about Sabre Holdings is available at
http://www.sabre-holdings.com. About Arab Air Carriers Organization
The Arab Air Carriers Organization (AACO) is an important
association in the growth regions of the Middle East and North
Africa. Alongside traditional activities, it is helping member
airlines to achieve considerable savings in their daily operations
through joint projects. AACO's mission is to Promote Cooperation
amongst Arab Airlines and to Serve their Common Interests through
Service Excellence. As the association of airlines based in Arab
League member states, AACO represents 23 airlines in the Middle
East and North Africa regions. The Beirut-based organization,
established in 1965, aims to promote the highest safety standards,
to provide a framework for a better economic environment for
airline operations, to promote high standards of consumer driven
services, to provide high quality and cost effective framework for
human resources development, to invest in the synergy of
interaction between members through establishment of joint projects
AACO has developed a strategy based on five pillars: cost
reduction, strengthening marketing, network strategy, aviation
regulations and services More information about the Arab Air
Carriers Organization is available at http://www.aaco.org. Sabre
Airline Solutions, the Sabre Airline Solutions logo, AirFlite and
SabreSonic are trademarks and/or service marks of an affiliate of
Sabre Holdings Corporation. All other trademarks, service marks,
and trade names are the property of their respective owners.
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