IN FOCUS - 2010 AN ANNUAL REVIEW OF STAR ALLIANCE … · contents A Snapshot of Star Alliance...

IN FOCUS - 2010

AN ANNUAL REVIEWOF STAR ALLIANCEPRODUCTS AND BENEFITS

THE WAY THE EARTH CONNECTS

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A snapshot of Star Alliance members: 27 member airlines

Total revenue ($US) $150.7 billion* Airports served 1,160Annual passengers 603.8 million Fleet 4,029Daily departures More than 21,000 Lounges More than 970Number of Employees 403,000 Countries served 181

Star alliance Fleet number oF major hubmember carrierS Size employeeS airportS

Adria Airways (JP) Ljubljana

Aegean Airlines (A3) Athens

Air Canada (AC) Toronto, Montreal, Vancouver, Calgary

Air China (CA) Beijing, Chengdu, Shanghai

Air New Zealand (NZ) Auckland, Los Angeles, Hong Kong

ANA (NH) Tokyo, Haneda, Osaka

Asiana Airlines (OZ) Seoul Incheon

Austrian (OS) Vienna

Blue1 (KF) Helsinki

bmi (BD) London Heathrow

Brussels Airlines (SN) Brussels

Continental (CO) Newark, Houston, Cleveland, Guam

Croatia Airlines (OU) Zagreb

EGYPTAIR (MS) Cairo

LOT Polish Airlines (LO) Warsaw

Lufthansa (LH) Frankfurt, Munich

Scandinavian Airlines (SK) Copenhagen, Oslo, Stockholm

Singapore Airlines (SQ) Singapore Changi

South African Airways (SA) Johannesburg

Spanair (JK) Madrid, Barcelona

SWISS (LX) Zurich, Geneva, Basel

TAM (JJ) São Paulo, Rio de Janeiro, Brasilia

TAP Portugal (TP) Lisbon, Porto

Thai Airways Intl (TG) Bangkok, Chiang Mai, Phuket, Hat Yai

Turkish Airlines (TK) Istanbul, Ankara

United (UA) Chicago, Denver, San Francisco,

Los Angeles, Washington D.C.

US Airways (US) Charlotte, Philadelphia, Washington D.C., Phoenix

Air India (AI) Mumbai, Delhi, Kolkata, Chennai

Avianca-TACA (AV-TA) Bogota, San Salvador, San Jose,

Guatemala City, Lima

Copa Airlines (CM) Panama City

Ethiopian Airlines (ET) Addis Ababa

Soon to join

* all figures as of October, 2010

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30

325

276

100

221

74

84

12

62

51

607

13

69

57

424

172

107

51

45

85

147

71

88

145

360

339

146

150

60

41

686

2,400

22,900

23,734

10,500

32,578

8,163

6,000

400

3,715

3,000

40,728

1,146

6,800

3,500

39,500

14,438

13,392

8,000

3,036

7,418

26,300

6,980

26,897

13,288

46,600

31,000

33,000

12,000

4,772

5,555

3

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contentsA Snapshot of Star Alliance Members 3

The Year in Photos 4

A Message from CEO Jaan Albrecht 6

Consolidation in the Airline Industry 8

The Impact of the Ash Cloud 10

A Look at Biosphere Connections 12

Emissions Trading in the Alliance 14

New Carriers to join the Alliance 18

Star Alliance’s Fare Products 20

Innovation Key to Developing New Products 21

The Alliance’s Specially Painted Planes 22

Alliance Livery as popular as ever 24

Customer Feedback Produces Better Service 26

Auditing with Star Alliance standards 27

Star Alliance Upgrade Awards 28

Corporate Plus, Conventions Plus, Meetings Plus 29

Mobile Portal Development 30

A Look at Star Alliance Sourcing 31

Through-Checkin and Baggage Products 32

Move under one Roof 38

Lounge Improvements 42

A Focus on IT 44

Employee Projects and Training 46

2D Barcode breakthrough honoured 48

Facts & Figures 50

5

A MESSAGE FROM THE CEO

Star Alliance strengthens and grows as industry returns to profit

The year 2010 marked a return to profit-

ability for the airline industry after tough times,

but will, above all, go down in history as the

year when modern-day air travel discovered

a new vulnerability, as the ash that spewed

from an Icelandic volcano temporarily brought

air travel across Europe and beyond almost to

a standstill for a few days in April.

For Star Alliance, it was a year of further

controlled growth, in which we met customer

needs by successfully plugging a number of

gaps in our world-wide network, and a year

when we proved just how valuable the

Alliance partnership can be in the face of such

unprecedented disruption to operations.

Our member carriers represent about a

third of the global airline industry, making us a

good barometer for the industry as a whole.

As economies world-wide began to rebound

at the start of this year, our member carriers

too reported business was starting to pick up.

Then the ash cloud hit. Carriers and

customers alike discovered that alliances

can bring an element of stability in these

extenuating circumstances. The airlines were

powerless to prevent the disruption, but the

information-sharing systems that support the

Alliance concept of seamless travel meant we

were frequently able to rebook customers on

to another member carrier’s aircraft to get

them more speedily on their way.

In the mid-1990s, before Star Alliance’s birth

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as the first global airline alliance, such a high

level of cooperation among such a large group

of carriers would have been unthinkable. Yet

for today’s global travellers, the concept of

seamless travel as provided by Star Alliance is

something they not only desire, but demand.

Customer feedback reinforces repeatedly how

essential close inter-carrier cooperation is if

the industry is to provide a competitive and

satisfactory travel experience to its clients.

In previous years, we have spoken of ‘white

spots’ in our global coverage. These are parts

of the world in which we are looking for airlines

and routes that will complement the existing

network and therefore benefit our customers.

Last year, we welcomed Aegean into the

family, which gives us enviable coverage in

Greece. TAM in Brazil went a long way to filling

the void that existed for us in South America.

But our passengers want a still wider Alliance

network. We announced in November that

the Avianca-TACA group and Copa will be

joining the Alliance to collectively cover

Central America. In Africa, Ethiopian has signed

up for membership, which will broaden the

network currently provided by EGYPTAIR and

South African Airways. It is clear from all of this

activity that airlines are drawn to a large,

diverse network that can provide growth in

good times and a safe haven when events

conspire against us.

Another area that binds us together as an

airline group is innovation. Star Alliance

continues to be the leader when it comes

to developing new products and services for

customers. After 13 years, we have found

that there is still a great deal that can be done

to enhance the travel experience for

customers. This year we took the step of

harnessing the creativity of our members’

employees, calling on these 400,000 bright,

creative people to help us pinpoint and

develop the next wave of advances. We

established an innovation team to tap into

that wellspring and I’m very pleased with

what has come out of that exercise so far.

I am convinced that processes in our

industry can be further simplified and systems

can be made less complex. The goal is to

keep travel safe and affordable and to make

it even easier and more convenient than it is

today.

Innovative thinking will expand on the

groundwork laid in the first 13 years, and it’s

exciting to speculate as to how the industry

will look in another five or ten years.

I am confident that we, as Star Alliance, will

continue to play a major part in shaping our

industry in 2011 and beyond.

STAR ALLIANCE CEO, JAAN ALBRECHT

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CONSOLIDATION

After two disastrous years, the airline industry

is set to record a US$8.9 billion net profit,

followed by a forecast $5.3 billion profit in 2011,

according to estimates released by the Interna-

tional Air Transport Association (IATA) in the fall.

While bluer skies are forecast, it remains clear the

industry must find ways to reduce costs, find

sustainable revenue streams and improve

efficiency. While cutting costs internally can go

so far, looking outside to create new synergies

through business relationships with other groups

or airlines is becoming more attractive.

These relationships, which can range from

basic codeshare agreements to more complex

consolidation exercises, mean a stronger,

financially healthier industry. By extension, a

stronger industry means more stability, which

leads to better service for customers.

“We are in an abnormal industry. Few other in-

dustries are so heavily regulated on the one side

and on the other receive ongoing government

and taxpayer support,” said Horst Findeisen, Vice

President, Business Development. “For decades,

governments owned the airlines. They were

called ‘flag carriers’ and became icons of their

countries. Their freedom to act was constrained,

but they were protected. They couldn’t fail. This

is now changing. We are seeing poor performers

disappear and along with them, their protected

flag carrier status.”

Due to foreign ownership regulations in almost

all countries, consolidation is usually restricted to

domestic airlines and rarely crosses borders.

The global trend towards liberalisation in the

aviation arena is changing that. As foreign

ownership limits and traffic rights restrictions are

being lifted, airlines can pursue strategies that

were unthinkable before. Within Star Alliance,

Austrian, bmi, Brussels Airlines and SWISS are

now part of the Lufthansa group. And the new

United, which includes Continental — effectively

creating the world’s largest airline — was finalised

in October. Within oneworld British Airways and

Iberia – British and Spanish carriers — are

consolidating across borders. And in SkyTeam,

Air France and KLM as well as Delta and

Northwest have consolidated their operations.

“What you’ll notice with all of these is that

consolidation is occurring within alliances,” said

Findeisen. “There’s good reason for this.

Because carriers are within certain alliances, they

are already aligned on many fronts — frequent

Consolidation changes face of airline industry

What you’ l l not ice with al l of

these is that consol idat ion is

occurr ing within al l iances. With

a l ignment already so close, consol ida-

t ion is much easier than merging with a

carr ier outside of your al l iance.”

HORST FINDEISEN, VP, BUSINESS DEVELOPMENT

“

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flyer programmes, lounge access, codesharing,

computer infrastructure and many other areas.

With alignment already so close, consolidation is

much easier than merging with a carrier outside

of your alliance.”

One of the values of belonging to an alliance,

said Findeisen, is this opportunity to create a much

closer business and working relationship.

“Consolidation within alliances doesn’t hurt the

alliance structure. Customer expectations towards

the alliance remain the same and so do our

minimum service requirements. If Star Alliance

shrinks from 27 to 26 members because two have

agreed to merge, the merged airline can be

stronger and financially healthier, and as a result,

makes the whole of the alliance stronger,”

said Findeisen.

Where is consolidation going? Will we see

more mega-mergers? “Undoubtedly. The

consolidation wave is evident in North America,

Europe and lately in Latin America, but hasn’t

occurred yet in Asia. But it will,” forecasts

Findeisen. “Look at the recent merger of China

Eastern and Shanghai Airlines as one example.

Mergers will likely remain confined to geographic

areas and not cross the oceans, but in theory, there

is no reason why they shouldn’t become global.

The auto industry is just one example where

ownership has crossed oceans and become truly

global. The same could — and maybe should —

occur in our industry. The concept of a proud, but

notoriously money-losing flag carrier is disappear-

ing. Taxpayers no longer want to subsidise their

airline icons, which frees the emotional attachments

governments may feel toward these airlines.”

Findeisen foresees a time when normal

market forces apply to the airline industry.

“And that means poor performers will

disappear, smaller ‘boutique’ carriers

serving niche markets will thrive and medium

and strong performers will merge across

national boundaries. It’s an ongoing process

but one the industry certainly needs if it is to

continue to serve customers’ requirements.”

9

ASH CLOUD IMPACT

“In the middle of the Atlantic, at the crossroads

of European weather systems, the youngest

country on earth recently reminded the world

how, through a combination of a volcanic

eruption and enormous quantities of glacial

ice, the forces of nature can produce huge ash

clouds, impacting on nations far away, even

disrupting for a while the travel plans of millions

on different continents,” Ólafur Ragnar Grímsson,

President of Iceland, noted philosophically — and

diplomatically — at the opening of the Atlantic

Conference on Eyjafjallajökull and Aviation some

months ago.

Eyjafjallajökull. Most of us can barely pronounce

the name of the Icelandic volcano yet all of us will

remember its activity and subsequent disruptions

to global air travel and business. The “island-

mountain glacier” (in Icelandic, Eyjafjallajökull)

started spewing ash on Wednesday, April 14,

2010 and while its eruption was relatively small,

its impact was amplified by the presence of the

glacier that fuelled ash production, coincident

with prevailing winds that pushed the cloud to

mainland Europe and the density of commercial

flight operations on the continent.

As the ash cloud arrived, Europe’s regulators

and governments gradually shut down airspace.

Norway and the U.K. (Scotland) were the first

countries to take measures, and by midnight,

Sweden and Finland had also begun to regulate

parts of their airspace. Some 8,000 flights to/

from/in Europe, representing about one-third of

scheduled flights, were cancelled on Thursday.

Traffic across Europe declined over the

following days with cancellations reaching their

peak of 80% on April 18. On that day there were

just 5,204 flights crisscrossing Europe’s skies,

compared to 24,965 on the same day the week

before — a staggering drop of 20,000 flights

affecting 1.2 million passengers. Some 20

countries had closed or partially closed their

airspaces, stretching as far as Romania and

Ukraine in the east and Spain and Portugal in the

south, and 313 airports were closed for all

landings and take-offs. Ironically, airspace and

airports in Iceland remained largely unaffected

and stayed open during most of the crisis.

Air traffic resumed to near-normal levels on

April 22 with more than 27,000 flights to and/

or from European airports although some flight

schedules remained backlogged into the

following week.

It is widely accepted that the ash plume caused

an interruption in global air traffic to an extent not

Eruption disruption: The ash cloud’s impact on aviationB Y C A T H Y B U Y C K

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seen since 9/11 (Sept. 11, 2001) and the largest

breakdown in European civil aviation since World

War II. “This volcano has crippled the aviation

sector, firstly in Europe and is now having

worldwide implications. The scale of the

economic impact [on aviation] is now greater

than 9/11 when U.S. airspace was closed for

three days,” Giovanni Bisignani, CEO and

Director-General of the International Air Transport

Association (IATA) said in the midst of the crisis.

European Commission Vice President

responsible for Transport Siim Kallas stated that

“the air transport sector in the EU has never

previously faced a situation of such magnitude.”

One simply has to look at the numbers to

understand the magnitude of the crisis:

• more than 100,000 flights cancelled across

Europe during the first week;

• an estimated 7 million air passengers were

affected - 6 million European passengers and

more than 1 million travellers outside Europe;

• global aviation losses - US$2.6 billion and the

effect on global GDP caused by the first week’s

disruption approximately $4.7 billion, according

to a study by Oxford Economics.

The report on the Economic Impact of Air Travel

Restrictions, which was commissioned by Airbus,

highlights the vital role of air transport and

corroborates a statement by Peter Harbison,

founder of the Sydney-based Centre for Asia

Pacific Aviation that the “ash cloud has provided

an unplanned social and costly economic

experiment, with airlines again at the epicentre.

All those who believe that aircraft are toxic to the

environment have had a sneak preview of what

the world would be like if, indeed, people and

goods did not fly.”

In Kenya, for example, the estimated losses for

local producers of flowers, fruit and vegetables

were US$3 million a day and thousands of

workers were temporarily laid off.

Latin American flower producers also lost around

$3 million, and car production at BMW and Nissan

plants in Germany, USA and Japan were

temporarily suspended due to shortages of

air-freighted components.

Given the high proportion of cancelled flights in

Europe, the costs to the aviation industry within

Europe was the highest of all regions, followed by

the Americas, Middle East & Africa, and Asia. The

ash plume cost the aviation industry in Asia $216

million compared to $1.4 billion in Europe.

All airlines in Europe were affected, although

some more than others depending on their

location. Brussels Airlines for instance cancelled

about 80% of its weekly flight schedule during

the crisis and the consequent loss in revenue

and costs relating to the EU passenger rights

regulation had a negative bottom line impact of

€10 million. SAS Group said the ash cloud had

an estimated negative earnings impact of

SEK650-700 million while Turkish Airlines

reported losses of €6.5 million.

Ten months later, Eyjafjallajökull is still

unpronounceable, its activity has died down

and most of the heated discussions over

governments’ reactions to the problem and the

liability for the air space closures have eased.

The question, nonetheless, remains: is Europe

better prepared for another ash plume crisis?

Cathy Buyck is a journalist specialising in

the aviation industry. She is Senior Editor and Europe

Bureau Chief of Air Transport World.

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Star Alliance’s Biosphere Connections will

become the focus of the Alliance’s branding

campaign in spring 2011.

A film crew from National Geographic shot in

five locations around the world to highlight the

work being done by the three Biosphere

Connections partners - UNESCO — Man and

the Biosphere (MAB), IUCN and Ramsar

Convention on Wetlands.

The five sites are the Amani Butterfly Project

in East Usumbara, Tanzania; the Abrolhos

Archipelago

in Brazil;

Yellowstone

National Park

in the U.S.;

the Hagia

Sofia UNESCO

heritage site

in Istanbul and

Chilika Lagoon

in India.

The Direc-

tor General of

UNESCO, Irina

Bokova is the

chosen

advocate for the

campaign.

BIOSPHERE CONNECTIONS

Branding campaign focuses on Biosphere Connections

What is Biosphere Connections?

Biosphere Connections was announced at

the Alliance’s 10th anniversary celebrations in

Copenhagen in May, 2007. It is a partnership

agreement between the Alliance and three

international organisations promoting

environmental sustainability:

• UNESCO Man & Biosphere Programme (MAB)

• International Union for Conservation

of Nature (IUCN)

• Convention on Wetlands (Ramsar, Iran, 1971)

The objective of the initiative is to contribute to

the promotion and conservation of biodiversity,

and the sustainable use of natural resources in

all the countries and regions that Star Alliance

member airlines operate, by connecting the

networks offered by the partner organisations.

Since 2007, more than 160 environmental workers

have been assisted by the Biosphere Connec-

tions programme to travel to conferences to share

their knowledge and learn new ways to help the

environment.

Star Alliance shares the long-term goals of the

partner organisations - to seek conservation of

biodiversity and natural resources in biosphere

reserves, world heritage sites, wetlands and the

sustainable development of human communities

and the ecosystems they depend on. The Alliance

supports these internationally recognised

organisations, and carriers’ efforts to improve

environmental management, demonstrate

commitment to the long-term health and

well-being of society and the planet.

Less than two years after the Alliance was

founded in 1997, the then member carriers signed

an Environmental Commitment Statement outlining

six principles that would “challenge us to reduce

our impact on the environment and maintain a

healthy balance between progress and

environmental sustainability.”

DIRECTOR GENERAL OF UNESCO, IRINA BOKOVA

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THE FIVE BIOSPHERE SITES

THE AmAnI nATuRE RESERVE is a tropical forest in Tanzania. With a population of 120,000, human impact on the forest is threatening many of the plant and animal species. The Tanzania Forest Conservation Group starts projects that protects species and educates the local people. The Amani Butterfly Project is dedicated to raising butterflies for exhibitions around the world.

THE ABROlHOS ARCHIPElAgO, off the northeastern coast of Brazil, is home to the largest population of humpback whales in the world. The archipelago is a UNESCO:MAB reserve and a Ramsar site. Conservation International (CI) is working to create a sustainable marine reserve in the area. Industrial fishing methods have threatened the region, but CI works with local people to preserve species such as snapper and grouper for their own benefit. CI works with the Humpback Institute to monitor the whale population.

YEllOWSTOnE nATIOnAl PARk covers parts of Wyoming, Montana and Idaho. It was established in 1872 as the world’s first national park and is home to grizzly bears, wolves, bison and elk. The National Geographic team focused on the gray wolf population, which was reintroduced to Yellowstone in 1995 after an absence of nearly 70 years.

HAgIA SOPHIA, a former mosque (now a museum) in Istanbul, Turkey, is a World Heritage Site. It opened in 360 AD and is famous for its massive dome. It is considered the epitome of Byzan-tine architecture. It was the largest cathedral in the world for almost 1,000 years.

CHIlIkA lAkE — administered by Ramsar - is a lagoon on India’s east coast. It is India’s largest brackish lagoon and home to the endangered irrawaddy dolphin. It is also home to more than one million birds and many animals on the IUCN list of endangered or vulnerable species. The Chilika Develop-ment Authority has worked on a number of conservation projects to protect bird species, control fishing and dolphin tourism activities and to help the local people through education, skills training and offering alternative sources of income.

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EMISSIONS

Alliance eases the way to manage emissions compliance

New European Union regulations that place

an ever tighter cap on aviation industry CO2

emissions have led Star Alliance to seek ways

for member carriers to use shared services

and exchange best practices, to make it easier

to comply with the changed rules.

The European Union Emissions Trading

Scheme (EU ETS) is the largest carbon

trading scheme in the world and the only

mandatory one. It comprises a cap-and-trade

system whereby the EU sets a ceiling on

overall aviation industry emissions and then

allocates a “free” annual emissions allowance

to each carrier serving EU airports.

Beginning in 2012, the cap for the airline

industry will be set at 97% of average EU CO2

emissions recorded between 2004 and 2006.

By 2013, the cap will drop to 95%.

Reducing fuel burn to cut costs has long

been an aim in aviation, but where other

industries can opt for different fuel sources

to reduce emissions, there is no alternative

to jet fuel.

“Airlines are aware of their role as carbon

emitters, but airlines are responsible for only

2% of all emissions such as carbon dioxide,

which is less than that caused by other

methods of transportation,” said Andreas

Naujoks, Regional Director, Star Alliance, who is

leading the Alliance’s ETS-related initiatives.

Under the EU scheme, airlines measure their

emissions each year, have the fuel burn verified

by a third party, and then submit a matching

number of allowances to the relevant authority.

If an airline exceeds its allocation it must buy

allowances from companies, in any industry,

that have a surplus. A link to the Kyoto Protocol

means allowances from carbon reduction

projects in developing countries are also valid.

To help carriers meet the reporting

requirements, Star Alliance has negotiated

agreements with two global firms for

verification of emissions, which will ensure

member carriers adopt a common approach

and also offer them a discount compared with

the individual carrier service fee. In 2010, the

auditors verified transport volume for all

operations, which is a critical benchmark for

later allocation of free allowances per carrier.

Star Alliance supports measures that offer

genuine incentives for individual airlines to cut

emissions, unlike government-imposed ecology

taxes, Naujoks said.

“We certainly support the concept of emission

reduction, but let’s not get into double taxation,

such as having an eco-tax and ETS,” he said.

TAM CONDUCTED THE FIRST TEST FLIGHT IN LATIN AMERICA USING BIOFUEL.

14

“ETS is an efficient tool that economically

allocates resources to carbon reduction. The

scheme recognises the efforts of carriers to

cut emissions, whereas taxation affects all

airlines regardless.”

One problem is that the EU scheme

only covers around one-third of world air

traffic and gives airlines that avoid EU airports

a competitive cost advantage, as they are

not affected.

“As a global industry, we need a global

approach as recommended by IATA.

Worldwide basic emission goals make sense

for an industry that operates beyond national

boundaries,” Naujoks said.

15

Air Canada has worked with Zerofootprint, a non-profit organisation, since

2007. Passengers can calculate the estimated emissions for their trips and

purchase carbon offsets that benefit three Canadian projects. Since 2007,

Air Canada customers have spent CAD$263,042 and offset 16,414 tonnes

of CO2. Air Canada is also following EU ETS guidelines for monitoring and

reporting of aviation activity data.

Austrian is taking part in EU ETS and monitoring its emissions and

tonne kilometers. Starting in 2012, Austrian will buy and submit

certificates for emissions.

Brussels Airlines offers a carbon offset programme

through CO2logic. The donations are used to develop green

projects in Africa and other countries the airline flies to. It is

currently supporting a woodstove project in Uganda. The stoves

will require 50% less firewood, resulting in a reduction of three

tonnes of carbon dioxide per stove each year.

Continental has joined the non-profit organisation Sustainable

Travel International (STI) to offer customers an opportunity to

purchase carbon offsets. Customers can invest their offsets in

reforestation, renewable energy and energy conservation.

LOT submitted its EU ETS monitoring plans to the Ministry for

Environment in Poland. PWC Holland was hired to conduct

pre-verification at LOT, to spot any gaps in the company’s reporting

methods. LOT hopes to confirm verification by March.

SAS has offered carbon offset to its customers since 2007. The airline

has a number of corporate agreements and offsets its own corporate

travel. SAS began preparing for EU ETS a couple of years ago and is

well prepared to meet its environmental goal of reducing emissions

by 50% per produced unit by 2020.

Singapore formed a task force in 2009 to develop an MRV sys-

tem to meet the EU ETS requirements. Monitoring of emissions

and tonne kilometer data started in 2010. A pre-verification audit

in October confirmed monitoring processes are compliant.

SWISS customers have been able to offset CO2 emissions

ALL STAR ALLIANCE MEMBERS HAVE INSTITUTED PROGRAMMES TO HELP OFFSET CARBON EMISSIONS PRODUCED BY AIRCRAFT. BELOW ARE A FEW ExAMPLES OF THE MANY INNOVATIVE APPROACHES THE MEMBER AIRLINES ARE TAKING.

Who’s doing what to help reduce emissions

16

generated by their air travel via the myclimate foundation for about three years.

Myclimate invests the funds in SWISS-selected projects. One project in

Karnataka (India) uses agricultural waste or biomass to generate

electricity. The biomass power station replaces its coal-fired

alternative, thereby reducing CO2 emissions and helping to

promote more eco-friendly energy sources.

TAM held a demonstration flight, which used a mix of biofuel from

the Jatropha plant. Studies show a reduction of up to 80% in

carbon emissions.

TAP was the first airline worldwide to launch IATA’s Carbon

Offset Programme on June 5, 2009, marking World

Environment Day. TAP supports the Aquarius Hydroelectric

Project in Brazil. Since 2009, TAP has offset 6,268 tonnes of

carbon emissions. TAP was recognised by UNESCO and by

the International Union of Geological Sciences with the

International Year of Planet Earth “Planet Earth Award 2010”,

in the category of “Most Innovative Sustainable Product”.

THAI is the first Asia-Pacific airline to launch IATA’s Carbon

Offset Programme. The IATA programme allows customers to

purchase tickets and offsets at the same time. THAI is support-

ing two projects: Thailand’s biogas waste heat-based project in

Nakorn Ratchasima and Brazil’s Braco Norte IV small hydro plant.

Turkish Airlines is working with IATA, achieving US$114

million in fuel cost savings, and reducing carbon emissions by

378,000 tonnes.

Future member Air India The National Aviation Company

of India Limited (NACIL), formed to oversee the merger of Air

India and Indian Airlines, has achieved a reduction of 463

million kg in carbon emissions since 2007. NACIL was awarded

the Energy Conservation Award for 2009 by the Bureau for

Energy Efficiency. NACIL has also submitted the ETS required

plans to the EU for the annual emission and tonne kilometer

(TKM) monitoring.

17

CARRIER STRATEGY

Carriers add todepth of Alliance

Late in the year, Star Alliance announced

that Ethiopian Airlines, the Avianca-TACA group

and Copa Airlines (including Copa Airlines

Colombia) of Central America will be joining

the Alliance in 2011 or 2012, depending on the

speed of integration activities.

The announced carriers will follow in the

footsteps of TAM and Aegean, which joined the

Alliance earlier in the year.

“The future addition of these new member

carriers is the result of a strategic process that

is aimed at strengthening Star Alliance as the

leading global airline alliance in the most rapidly

developing markets for aviation,” said Marcus

Puffer, Director, Network & Membership

Development.

The airlines give the Alliance a

stronghold in Eastern and Central

Africa, Central America as well

as Colombia, one of the largest and fastest-

growing aviation markets in Latin America. Star

Alliance’s presence in Peru will significantly

improve, providing access to the southern

regions of the American continent.

“The importance of these airlines not only

rests in those countries. There are large sized

communities from these areas in North and

South America, Europe and Australia that have

family ties to their home countries. They bring

leisure and business traffic to their home

carriers and to the airlines’ codeshare

partners so connecting traffic between the

existing member carriers and all of these

countries will grow,” said Puffer.

In Central America, the new member

carriers will bring two important hubs in Bogota

and Panama, along with a strong presence in

San Salvador, San Jose and Lima. Avianca and

18

TACA, which bring together several smaller Latin

American carriers, agreed to a strategic merger

in October 2009, creating a combined network

focusing on Central American and North

American traffic.

Copa, which includes subsidiary Copa

Colombia, left SkyTeam in October 2009 and

opened membership discussions with Star

Alliance the following month. Copa’s “Hub of the

Americas” in Panama focuses on traffic from

Central America and the Caribbean, southwards.

“These airlines will add significantly to our

depth of service in Central and South America,

complementing the networks of our existing

members. In May, TAM joined the Alliance, which

dramatically improved our network in South

America. The year prior we had just 11% of the

Latin American market, but today, with the

addition of TAM’s network, our share has grown

to over 30%. This will now further improve with

the addition of the Avianca-TACA and Copa

groups,” said Puffer.

Ethiopian will be the Alliance’s third carrier in

Africa, joining EGYPTAIR and South African

Airways. Its geographic location, between

existing hubs in Cairo and Johannesburg will

create a more efficient and cohesive African

network for customers.

AT A CEREMONY IN GREECE JUNE 30, AEGEAN AIRLINES JOINED STAR ALLIANCE

The future addit ion of these new member carr iers is the

result of a strategic process that is a imed at strengthening

Star Al l iance as the leading global a i r l ine a l l iance in the most rapid ly

developing markets for aviat ion.”

MARCUS PUFFER, DIRECTOR, NETWORK & MEMBERSHIP DEVELOPMENT“

19

SHANGHAI, CHINA

BANGKOK, THAILAND

DENPASAR, BALI

AUCKLAND, NEW ZEALAND

LOS ANGELES, USA

New fare products and services

Star Alliance continued to expand its offering of

fare products and services throughout the year

with the introduction of the Brazil Airpass, one

of 14 fare products offered by the Alliance, and

easier ways to plan and book trips online.

The Brazil Airpass was added in July following

the joining of TAM in May. It joins a portfolio of

nine other Airpasses, three Circle Fares and the

popular Round-the-World Fare.

Star Alliance is the first aviation alliance to

sell multiple fare products on the Internet. In

addition to Airpasses, the Round-the-World Fare

and Circle Fares can be booked and purchased

on www.staralliance.com. Bookings can be made

anywhere in the world, with tickets automatically

issued electronically. The booking engine is

currently available in English and Japanese, with

other languages to be added later.

“In today’s world, selling through the Internet

is an essential distribution channel,” said

Christopher Korenke, Vice President

Commercial. “Our alliance fare products

offer a unique way of exploring the vast number

of destinations served by our member airlines;

however the complexity of these multi-airline

fares does not allow for easy automation,

hence it is even more satisfying that with the

Circle Fares, we now have multiple products

available for online booking and ticketing.”

The three Circle Fares: Circle Asia, Circle North

Asia and Circle Pacific are designed to facilitate

travel between destinations across the Pacific

Rim using various Star Alliance member carriers.

The online booking option for Circle Fares

follows the introduction of Book & Fly over a

year ago. Book & Fly allows customers to plan,

book and purchase Round-the-World tickets on

www.staralliance.com. Additionally, an online fare

calculator provides a fast way for customers to

determine routings and prices.

Since the first discount product was introduced

in 2003, revenue has grown each year to the

point that collectively almost US$400 million

goes to the member carriers each year.

The most popular is the Round-the-World Fare.

That programme has generated a 24% increase

in revenue, year-over-year, and accounts for

more than US$340 million in additional revenue

to the carriers. Most Round-the-World Fares are

sold in Australia, the U.S. and Japan.

FARE PRODUCTS & SERVICES

20

The Star Alliance Brainstorm site, launched in

early 2010, is a way to tap into innovative thinking

within the employee groups of the member

carriers. As the demand for air travel increases, so

does the need for new, innovative approaches that

ease the travel experience for customers.

By year end more than 1,000 employees from all

member airlines had joined the project. Ideas sub-

mitted during the year either expanded on existing

Star Alliance products and services, or have in-

spired new ways of thinking about common issues.

“Brainstorm has been an eye-opening

experience for us,” said Jeremy Drury, Director,

Alliance Innovation Services. “We learned that there

is an enthusiastic, innovative and creative group of

employees within our member airlines and at Star

Alliance headquarters in Frankfurt who are

looking to be heard and willing to go the extra mile

to support our global alliance. Most importantly we

found a new way to challenge and develop ideas

— through the involvement of the more than 1,000

employees using the Brainstorm website.”

During the year, Drury and his team chose one

user who had “gone the extra mile” to receive a

special award at the annual CEO board meeting

held in December in Queenstown, New Zealand.

John Powell, a Strategic Analyst in the International

Revenue Management department at Continental

submitted five ideas for products and services that

could generate revenue or cost savings for member

carriers. Three of his ideas caught the attention of

other innovators in the Brainstorm community,

making them among the top ideas on the site.

“Once my ideas were selected for sponsorship,

Star Alliance HQ took an ‘all hands on deck’

approach to keeping progress steady and organ-

ised as we worked to

build a solid business

case for presentation

to the membership,”

said Powell.

Two of his ideas

have found executive

sponsorship within

Star Alliance and are

being carried forward

for further review

and possible

implementation.

“Using the resources

of the innovation

community makes

Brainstorm different

and far more produc-

tive than a simple

‘suggestion box’. The community helps develop

the ideas and works together to get them noticed,”

added Drury. “Having an idea is just the beginning.

It’s what we do with it that counts. Innovation is

about transforming good ideas into products,

services, business processes or organisational

changes that create new value for Star Alliance.”

Innovation group taps employee creativity to develop new products

BRAINSTORMING

“ Innovat ion is about transforming good ideas into

products, services, business processes or organisat ional

changes that create new value for Star Al l iance.”

JEREMY DRURY, DIRECTOR, ALLIANCE INNOVATION SERVICES

JOHN POWELL, RECIPIENT OF STAR ALLIANCE CEO AWARD

21

PAINTED PLANES

The attraction ofpainted planesGone are the days when aircraft were painted in drab colours, or with minimal paint in order to enhance their function. Today, many airlines choose to use part of their fleet as marketing tools to promote an airline’s brand, or as part of a sponsor’s marketing campaign, or a little of both. These aircraft are favourites with the travelling public. Gathered here is a sample of the many colourful aircraft within the Alliance.

1 - Air China’s peony motif is painted on six of their aircraft2 - One of five aircraft Adria has painted as flying billboards3 - One of the aircraft Continental uses for promotional purposes4 - US Airways aircraft promotes the Philadelphia Eagles5 - TAP aircraft painted to promote Expo ‘98 6 - LOT’s Golden Aircraft7 - South African Airways’ Ndizani aircraft8 - Air China’s plane to promote the annual flower fair9 - SWISS’s plane to promote its new route to San Francisco10 - Austrian aircraft painted to mark the millennium11 - Air China’s phoenix plane symbolizes happiness and good luck12 - ANA’s Pokemon jet13 - Air Canada painted this aircraft to promote the 2010 Vancouver Olympics14 - Air China aircraft pays homage to Hubei province15 - Four Air China planes promote their First and Business Class cabins16 - US Airways’ Arizona Cardinals promotional aircraft17 - Turkish Airlines’ aircraft to promote FC Barcelona

5

7

9

1312

15 16

22

1

2

3 4

6

8

10 11

14

17

23

CORPORATE AIRCRAFT LIVERY

Star Alliance liveryas popular as ever

When the Alliance launched in 1997, each

member airline committed to painting at least one

aircraft in its international jet fleet with a special

Star Alliance livery. Five years later, the latest

design was made official and by 2003 members

agreed to have at least 3% of their international

jets painted in this design.

From the beginning, the Star Alliance brand

has been a strong component of building the

association between Star Alliance and the

member carriers’ corporate identity — an effort

that continues to pay off.

Carrier feedback, especially from new members,

remains positive. These aircraft are often used as

a branding cornerstone of an airline’s launch

ceremonies when joining the Alliance.

Furthermore, the logo provides cost-efficient

international flying billboards and is easy to

apply when an aircraft undergoes its regular

maintenance or when a new aircraft is delivered.

Eighty-three aircraft in member fleets are

painted in Alliance livery.

• 717 – 1• 737 – 10 • 747 – 2• 757 – 4 • 767 – 9 • 777 – 9• 787 – 1

• A319 – 6 • A320 – 8 • A321 – 1 • A330 – 9• A340 – 3 • ARJ – 2• CRJ SERIES - 4

• E145 – 1• E170 – 3• F100 – 1 • MD SERIES – 8 • SF340 – 1

TYPES OF AIRCRAFT PAINTED IN STAR ALLIANCE LIVERY

24

STAR ALLIANCE LIVERIED AIRCRAFT

AIRLINE NUMBER OF AIRCRAFT TYPE AIRCRAFT ADRIA 1 1 CRJAEGEAN 1 1 A320AIR CANADA 2 1 767, 1 A330AIR CHINA 2 2 A330 (1 787 TO BE DELIVERED)AIR NEW ZEALAND 1 1 A320ANA 5 3 777, 1 767, 1 737 ASIANA 2 1 737, 1 767AUSTRIAN 4 1 F100, 3 767BLUE1 1 1 717BMI 3 1 A330, 1 A320, 1 E145BRUSSELS 1 1 A319CONTINENTAL 7 1 757, 2 737, 3 777, 1 767 CROATIA 1 1 A319EGYPTAIR 3 1 A330, 1 777, 1 737LOT 3 1 767, 1 737, 1 E170LUFTHANSA 4 3 CRJ, 1 A340SAS 5 3 MD82, 1 A330, 1 737SINGAPORE 2 1 747, 1 777SOUTH AFRICA 2 1 737, 1 A340SPANAIR 8 3 MD87, 3 A320, 2 MD83SWISS 2 2 ARJTAM 2 1 A320, 1 A330TAP 2 1 A320, 1 A330THAI 2 1 747, 1 A330TURKISH 3 1 A340, 2 737UNITED 3 1 767, 1 777, 1 747US AIRWAYS 10 4 A319, 2 E170, 1 SF340, 3 757

25

CUSTOMER SURVEYS

Continuous surveys conducted with

customers who travel frequently with Star

Alliance have become an essential tool in

refining and improving customer service, both

for the individual carriers and with respect to

Alliance-wide customer promises.

The Star Alliance Online Customer Satisfaction

Survey targets members of airline frequent flyer

programmes for whom the airlines have

appropriate contact data. An e-mail refers to

a specific flight the customer made in the last

week and asks them to comment on their

service experience on that flight.

“We have to draw on frequent flyer

programme members as we do not have

access to contact data for all passengers,”

said Alex Fuchs, Manager, Compliance

and Market Research. “But we poll

customers at every status

level — base, silver and gold —

and in every cabin class.”

Around 30,000 customers

typically respond each quarter,

a return rate of 10-30%,

varying by airline, a fairly typical

return rate for surveys of this

type. In some cases the e-mails

are sent out by the individual

airlines, in other cases by Star

Alliance.

The survey covers the

end-to-end flight experience —

on the ground, in the air and on

the ground again at the other

end — and as such provides

valuable feedback for airlines in

terms of ground handling as well as

inflight service. The questions are under

constant review: unclear phrasing may

be modified to improve feedback quality and

additional modules can be added for specific

problem areas.

If a passenger reports problems on a flight

with respect to his frequent flyer benefits, for

example, he or she will be presented with a

separate module that gathers more

information on those issues, Fuchs said.

The survey is primarily multiple

choice but does offer opportunities

to make additional comments in a

free text field.

Customer surveys help refine customer service

26

Joining Star Alliance is a

major step for an airline —

one that receives worldwide

attention. But in many ways,

joining is the beginning of

the journey, not the end. The

Alliance has a wide variety of

quality standards in place to

ensure the requirements to

join are maintained.

The basis of compliance

is what the Alliance calls

Assets and Components,

a catalogue of required

standards for members.

It contains, among other

things, rules and require-

ments for safety and crisis

management, harmonisation

of frequent flyer benefits with

existing members, fitting in

the IT infrastructure and quality management for

Star Alliance products and services as well as

maintaining a consistent brand application.

For example, Star Alliance makes a

commitment to priority customers to deliver

their bags to the baggage belts first. Checkin

times for premium customers should be faster

than for economy customers, and business class

customers should be told they can board when

they want. “Star Alliance has developed

certain standards every airline has agreed to

abide by,” said Alex Fuchs, Manager, Compliance

and Market Research. “These areas need

constant assessment and improvement.

Customer feedback from online surveys is just

one part of that process.”

Auditing of each carrier at regular intervals

ensures that the members are implementing

the components the way they were intended,

Fuchs said. “We have an ambitious schedule that

ensures that every airline in the Alliance is

audited once every two years. That means in

2010 we carried out 14 audits and the same

will apply in 2011.”

Audits are done by a team of Star Alliance

employees and airline employees, who are

trained to conduct audits. The training ensures

there is a consistent way to monitor the airlines

during the audits, which produces better

quality results. Carrier audits are announced

three months in advance, and an audit team

selected at that time.

If issues are found, the relevant airline is given

six months to resolve the problems and the

results are reviewed at the end of the year by the

member carrier CEOs.

Auditing ensures compliance with Star Alliance standards

27

Upgrade Awardsexpands

With Star Alliance Upgrade Awards, customers

can redeem miles from their frequent flyer

programme accounts to upgrade by one

class, either from economy to business or

from business to first class.

Star Alliance Upgrade Awards is a unique

concept that benefits the carriers and their

frequent flyer members. The entire process is

automated so the upgrade is confirmed in

seconds. Plus it is electronic so there is no

need to issue a paper certificate or re-issue the

original ticket. A customer can sign onto the

airline’s website or use an airline’s call centre,

request the upgrade and be assured that all is in

order within a minute.

While most airlines allow upgrades on their own

flights, there was a limited ability to upgrade on

other carriers except through agreements

between individual airlines. In 2005, that became

possible with Upgrade Awards.

In surveys, international travellers consistently

rank upgrade awards as one of the frequent flyer

benefits they want most. In fact, it’s one of the

factors that customers say attracts them to Star

Alliance. It also means millions of dollars worth

of points or miles can be used in more creative

ways. This results in a significant financial benefit

because the FFP member’s home airline

transfers real dollars to the operating carrier to

pay for the upgrade, so there is a direct financial

benefit to the airlines.

The benefits aren’t slanted towards one or two

particular airlines. Upgrades occur between all

participating airlines. The product launched in 2005

with five carriers. Since then, it has expanded to

include more than 70% of Alliance carriers.

CUSTOMER BENEFITS

28

CORPORATE PLUS

Suite of business products gains in popularity

Corporate Plus, Conventions Plus and Meetings Plus are a

trio of products that help travel managers, meeting and event

organisers get the most from their travel budgets.

Meetings Plus, the latest addition, allows member airlines

to offer a single meeting agreement to corporate customers

for hosted travel (travel is paid by the corporation) and

non-hosted travel (travel is paid by the attendee) to their inter-

national meetings, which includes a discount on published fares.

In the case of Meetings Plus, the corporation uses a mandated

travel agency for booking attendees, whether hosted or not.

“Meetings Plus closes a gap between the Corporate Plus

offering for multinational corporations for employee travel and

Conventions Plus, which is dedicated to conventions

organised by associations by offering a tailor-made product for

those corporations planning international meetings for a

smaller number of attendees that are not covered by a

corporate deal,” said Roswitha Clement, Manager, Conven-

tions & Meetings. “Corporate Plus is a year-round, cost-saving

solution for multinational corporations, and Conventions Plus is

designed for association meetings, sports and cultural events.”

Star Alliance is the only alliance that has a complete suite of

sales products for corporations and meeting planners. “Often,

planners using more than one airline had to make separate

travel agreements for each leg of the trip. It was cumbersome

to say the least. Our products allow planners to use an assigned

travel agency to book flights and issue tickets, which saves

companies time and money, plus we can offer substantial

discounts when booking on member airlines.”

The products are proving to be popular. More than 100 global,

blue chip corporations are benefiting from Corporate Plus

contracts, generating more than €2 billion in revenue. The

Conventions Plus product has been used for travel to more

than 150 global conventions.

mEETIngS PluS• For company event planners or travel managers of corporations;• Attendees to come from at least three countries. Minimum 50 attendees required;• Requires three carriers to participate;• A travel agency assigned to issue the tickets;• Designed for company travellers, franchisees and dealers attending product launches, press conferences, sales meetings.

CORPORATE PluS• For travel and procurement managers of multinational corporations;• A contract can either have one point of sale or multiple points of sale worldwide;• One single agreement tailored to specific needs of a corporation. Replaces multiple individual airline agreements;• Corporations receive one report with simplified performance tracking;• Requires three carriers to participate;• For corporate employee business travel.

COnVEnTIOnS PluS• For conference organisers of association meetings, trade shows, sports and cultural events;• Attendees come from three countries and two continents. Minimum 500 delegates;• Star Alliance to become the Official Airline Agreement for convention/event;• Organiser support;• Offer includes discounts on published fares for delegates and one companion.

Comparing the products

29

MOBILE TECHNOLOGY

Mobile Portal expands services

Most airlines now view the use of the

mobile channel as a necessary element of

their business that allows them to reach their

customers at every possible point in the travel

chain, regardless of time and place.

As more travellers embrace the use of the

Internet via the mobile, many of the travel

services offered by airlines via personal computer

are expected by passengers to be accessible

while on the go.

With the increased demand from airlines to

pursue their own mobile web sites, Star Alliance

recognised an opportunity to work with its

member airlines to create a concept for a

common platform that could be used to provide

content and services required for every mobile

offering, while generating cost-savings

opportunities through joint airline participation.

The Common IT Mobile Platform (CIMP), offers

participating Alliance carriers a full mobile chan-

nel, on a single platform using shared technology,

common data sources and messaging services.

CIMP offers popular travel services such

as real-time flight status, flight schedule

information, lounge locations, destination

information, city weather, and currency

conversion. For each of these services, each

participating airline is provided with the content

from a central source, thereby eliminating the

need for separate sourcing of the data. A

subsequent phase of the project produced

passenger-specific services such as flight itinerary

details, frequent flyer account status and

notification of flight delays and schedule changes.

CIMP expanded services in 2010 to include

mobile checkin, seat map and seat

selection, and issuance of a 2D bar-

code boarding pass accessible from

a mobile device. The platform is being

used by three carriers — EGYPTAIR,

South African Airways and TAP.

30

Star Alliance’s Strategic Sourcing team is

making headway in cutting costs for the

member carriers through joint sourcing of

products and services.

The Sourcing group is looking at areas where

airlines spend significant amounts from their bud-

gets such as ground handling services, aircraft

parts, luggage and cargo containers, crew hotels,

inflight entertainment, catering and IT services.

Strategic sourcing is typically thought of as bulk

buying, but that aspect makes up only about one-

third of the potential ways intelligent joint sourcing

can benefit the

Alliance. By align-

ing specifications

and managing

supply, sourc-

ing goes beyond

simply bulk

buying and into

how the vendors

and the carriers

can strategically work together to reduce costs.

In 2009, the Alliance signed agreements with

several Chinese vendors to supply onboard

products such as blankets and trolleys at

favourable rates for the member airlines.

The trolley programme, for instance, will save

participating airlines about US$65,000 per year, or

about 10%. In addition, these airlines are expected

to save about $300,000 per year by burning less

fuel because of the lighter-weight material used to

manufacture the trolleys.

Also of importance is the common base

economy seat programme, which will significantly

reduce the cost of seat ownership by using

innovative materials and design elements and

provide a pre-certified catalogue of seat

features to meet each carrier’s requirements.

The joint purchasing of fuel is another area that

saves airlines money. More than $25 million in

savings were achieved through contracts signed

in 2010 in major stations such as Paris, London,

Hong Kong and Moscow.

Joint sourcing benefits member carriers

STRATEGIC SOURCING

31

CHECKIN PROCESSING

Through-checkin scrutinised to improve customer experience

Through-checkin for both passengers and bags

is an area that the Alliance will continue to focus

on improving, ensuring that the network offers

the best possible seamless travel experience.

Ideally, a customer travelling on two or more

Star Alliance carriers in a single journey should

always be able to get all their boarding cards

when they first check in and have their bags

checked through to their final destination at

the same time. But processes can get in the

way. This year, Star Alliance has been analysing

such cases with an aim of meeting the target of

seamless travel every time. A

through-checkin failure

cost analysis has been

created to better

understand the im-

plications that such

a failure has on pas-

sengers, as well as

to identify the costs

incurred for the car-

riers as a result.

“We put a task

force in place last

year to help us

understand why

through-checkin

does not always

work,” said Anita

Elste, Manager,

Products &

Services. “It’s one

of the conditions of

membership in the

Alliance that carriers

must be able to offer

through-checkin to

all of the other mem-

ber carriers, and

while all of them can,

there are issues with

processes that create delivery roadblocks, which

the task force has identified.”

Web checkin emerged as one area where

processes need improving as it is currently too

easy for a customer to check in online on only

part of their itinerary, which then makes it difficult

for checkin staff at the airport to follow the

standard through-checkin process.

“A customer will sometimes check in on an

airline website only for the second or third leg

of a flight. When the passenger arrives at the

departure airport to check in for the first seg-

ment, the through-checkin

request fails, since the

passenger is already

checked in on the

later segment via

the Web,” Elste said.

“We are determin-

ing what the best

Alliance solution is

and then will make

recommendations

that should elimi-

nate some of these

inconsistencies.”

The Alliance has

created a General

Business and Tech-

nical Requirements

document to help

when problems

arise. “It’s basically

a standard for Star

Alliance through-

checkin imple-

mentation,” said

Elste. “With this we

hope to achieve

more consistency

in implementations

across the Alliance.”

32

More carriers set to offer Automated Document Check

Star Alliance’s Automated Document Check

(ADC) will soon be available at three more

airlines: Air Canada, Air China and Asiana. ADC

was introduced at Singapore Airlines, followed

by ANA, THAI and United.

The carriers using ADC are finding significant

reductions in fines and associated costs.

“There is a real need to find a way to

automate the decisions involved in determin-

ing what travel documents a passenger needs,”

said Mike Chew, Director, Products & Services.

“Until now, airport agents had to refer to

complicated text, or memorize document

requirements for each country to be sure that

passengers’ documents were valid.”

If an agent errs and allows a passenger to

fly without proper documents, immigration fines

can be levied against the airline, and the

passenger may be refused entry into the country.

This results in inconvenience and cost to both the

passenger and the delivering carrier.

With ADC, the system is integrated

into the checkin process, and

clear “OK”, “NOT OK” or

“OK with Conditions”

decisions are

provided while the

passenger is

being checked in. Travel

warnings and conditions

associated with the rules of

the country are presented in

an easy-to-understand format

that is then accessed by a

carrier’s host system and

individually tailored for

passengers. This is done via a

database containing travel rules

for 150 countries.

At Singapore Airlines, fines have

decreased as much as 94% year-over-

year, and customers using Web checkin no

longer need to stand in line at the airport to have

their travel documents validated by an agent.

“Automated Document Check is another step

towards creating a Seamless Travel Experience

for passengers,” said Chew. “Once the system

checks and confirms documents are in order,

it eliminates the need for passengers to queue

at yet another counter for a manual check. This

helps speed up processes, which benefits both

the passenger and the airline.” It also means

that immigration fines for improper

documentation can be virtually eliminated.

As other airlines implement the product,

transferring from one Star Alliance member

carrier to another will become much faster.

Check in and document checking is done once

rather than at each transfer point. That will

make travelling on an itinerary covering multiple

countries much easier and more efficient.

33

LUGGAGE

Getting a handleon baggage issues

Delivering a missing bag to a passenger costs

an airline about US$90. The International Air

Transport Association has estimated that delayed

baggage costs the industry $1.6 billion each year.

It’s a significant cost issue that justifies investing

energy and resources to fix.

Star Alliance has several projects underway to

reduce mishandled bags at the member carriers.

A Focus on Baggage initiative set out to

monitor baggage mishandling by conducting

detailed monitoring at 20 stations. The aim was

to understand how errors occurred and work to

prevent this in the future.

A second key aim for baggage handling

in 2010 was to ensure that bags checked

in by priority customers — those travel-

ling in business or first class or with Star

Alliance Gold status — are delivered first

on the baggage belts. Focusing on this

aspect of customer service at 27

stations resulted in a marked

improvement during the year.

The Alliance works with its

members to develop solutions to

ensure smooth transfers across

the network and is making

headway in helping its members

ensure consistent performance

in such areas.

34

Common Baggage Service Facilities

Common Baggage Service Facilities

(CBSF), otherwise known as lost and

found offices, are saving carriers as much

as 15% each year, through lower office

and storage costs at airports where the

facilities are in a single location.

Collocation allows joint tendering for

such things as baggage delivery, repairs,

common purchasing of overnight kits,

baggage report folders and the like. The

CBSF project has

also harmonised

procedures, service

standards and interim

payments among

carriers to give

customers a

one-stop service.

There are 22 CBSFs

in the network

including new ones in

Manchester, Delhi and

Haneda (Tokyo). As

well, the Alliance

carried out service

audits at four other

CBSFs to ensure

consistent service

delivery. The CBSF team has started a

campaign called The Year of the

On-Hand (YOTO). The aim of the

campaign is to speed up the baggage re-

covery/tracing process and subsequently

deliver the delayed bag to its owner faster,

which results in better passenger service

and lower cost for the member carriers.

WorldTracer kiosks

The Alliance tested two self-service kiosks

in Copenhagen to help speed the reporting

and tracking of bags that had gone astray.

Normally, a baggage agent at the lost and

found counter works with a passenger to

place information into the WorldTracer

system. Allowing the customer to

enter the information at a kiosk speeds

up the process.

“This was another world first for Star

Alliance,” said Jay Dickson,

Product Manager,

Products & Services. “All of

our Baggage Service

Facilities use SITA’s

WorldTracer software,

but this was the first time

customers could file their

information directly

using a kiosk.”

The kiosk trial is in line

with the International

Air Transport Association’s

(IATA) Fast Travel initiative,

which is intended to give

more choice and control to

passengers while saving

as much as US$1.6 billion

for the industry.

The kiosk project was developed by SITA for

the Alliance to save development costs for the

carriers. Star Alliance has direct input into the

product development. In return, Alliance mem-

bers have first right of refusal and favourable

pricing while the technology partner is free to

sell the technology on the open market.

This was

another world f i rst

for Star Al l iance. Al l of our

Baggage Service Faci l i t ies

use SITA’s WorldTracer

software, but this was the

f i rst t ime customers could

f i le their information

direct ly using a kiosk.”

JAY DICKSON, PRODUCT MANAGER, PRODUCTS

& SERVICES

“

35

Transfer Decision Tool

An important piece of software called

the Transfer Decision Tool is used at

49 airports, including at the those

airports with a Connection Centre.

The tool, developed by the

Alliance in 2002, automates the

typically labour-intensive manual

processes used to monitor inbound

and outbound flights and identifies

connecting passengers and

their bags.

Star Alliance Connections

When the first Star Alliance Connection

Centre (SCC) opened in 2002 in Los Angeles,

the idea was that customers who needed to

get from one airplane to another in a hurry

could rely on SCC personnel to get them and

their bags to their connecting flights.

As a rule, customers and their baggage that

have been flagged as at risk of not making

their connections from one member carrier

to another are identified on the centre’s

computer screens. A late arrival for any

reason may give passengers

and bags less time to make

onward connections.

At some SCCs, staff meet

arriving planes and escort

passengers with tight

connections through airport

formalities to help them

make their flights.

Centres are in place

in Bangkok, Chicago, Char-

lotte, Denver, Frankfurt, Los

Angeles, Munich, Philadel-

phia, Tokyo-Narita, Toronto,

San Francisco, and Wash-

ington. In 2010, all SCCs

combined saved airlines

more than €10.3 million.

36

Common use Baggage Drop

While more people are using kiosks, the

Internet and mobile devices to reduce check in

time, dropping bags off after checkin

remains a bottleneck area at most airports.

Star Alliance has developed the Common

Use Bag Drop (CUBD) concept as a

possible solution.

A trial is underway at Tokyo’s Narita

airport involving ANA, Air Canada and

Asiana, in conjunction with ARINC as the

technology supplier.

“Dropping bags off after checkin is one

of the pain points we want to remove for

customers with the CUBD concept,” said Anita

Elste, Manager, Products & Services. The trial

tests bag drop efficiency by providing a spot

where customers can drop their baggage

after they have completed a Web, mobile or

kiosk checkin on any of the participating

member airlines.

While airlines have their own bag drop

counters, there is no common product in use

with member carriers that accepts bags for

multiple carriers on different Departure Con-

trol Systems (DCS) within the Alliance. Such a

solution would offer carriers the opportunity to

reduce checkin ground costs by sharing com-

mon bag drop facilities. ARINC is managing the

pilot at no cost to the participating carriers.

Interline Baggage Transfer Solution

A second initiative funded by an outside

vendor is the Interline Baggage Transfer

Solution, or IBTS. It’s a Web application that is

used to improve transfer connection

baggage performance at Star Alliance

connection airports by flagging problems

before they happen.

THE APPlICATIOn:

• Tracks connection baggage in real time

using IATA messaging;

• Identifies procedural shortfalls

during the event;

• Warns the operators of impending

mishandlings before they happen;

• Suggests potential solutions that are based

on the situation at hand;

• Offers timeframes required to correct a

specific situation.

IBTS is designed to be airport specific, and

is the first application in the airline industry that

will warn of potential baggage mishandlings

before they occur. The tool also provides

airlines with online statistics about the number

and type of bags that are mishandled, and on

which flights and dates. A pilot ran in June at

London-Heathrow. The vendor, SITA, is

now preparing to offer the product under the

name, Smart Bag.

A survey last year found that more than half of passengers were deterred from using self-service checkin as they felt the need to go to an agent to check their bags negated the convenience gained. As wel l , IATA ( Internat ional Air Transport Associat ion) est imates that the implementat ion of bag drop counters in conjunct ion with kiosk and off-airport check in can improve passenger processing

rates by 250% over tradit ional check in methods.”

ANITA ELSTE, MANAGER, PRODUCTS & SERVICES

“

37

MOVE UNDER ONE ROOF

Collocation concept pays dividends for airlines and customers

With more than 21,000 flights, moving more

than 1.6 million passengers each day, it pays to

be as coordinated as possible on the ground. A

member aircraft takes off every four seconds from

one of more than 1,100 airports around the world.

So when customers simply want to get from point

A to point B in the shortest time possible, they want

to make their connections as quickly as possible.

One way to achieve that is to move airlines closer

together in the same terminal. A major Star Alliance

terminal collocation is referred to as a “Move under

one Roof” (MuoR) project and generally includes

all or most of the Alliance carriers serving a given

airport shifting their operations to a single terminal

or part of a terminal. Smaller-scale projects

where Star Alliance brings a group of selected

carrier services together are simply referred

to as collocations.

Since 2005, MuoR projects have been

completed or are underway at 20 airports, with

smaller collocations at dozens of airports world-

wide that move toward providing a seamless Star

Alliance experience for customers.

In the pre-alliance world connecting from one

flight to another sometimes was an ordeal for

passengers because the gates of different airlines

often were far apart, or in different terminals, and

movement of baggage meant claiming and

re-checking at the transfer city.

“Clearly, the concept of MuoR makes perfect

sense,” said Jose Oller, Director, Airport Develop-

ment. “Sharing facilities such as checkin and

transfer desks, lounges and baggage service

offices makes the alliance travel experience hassle

free and efficient for the airline passenger. MuoR

also optimises expensive airport infrastructure for

carriers and airport terminal operators through

shared alliance usage and common infrastructure.”

38

Where’s move under one Roof happening?

mumBAI, InDIA: Planning among the 12 current and integrating carriers at BOM will ramp up in 2011 for the opening of the upgraded terminal 2 in 2012. Facilities will include collocated checkin and ticketing, and a Common Baggage Service Facility.

BAngkOk, THAIlAnD: The new Suvarnabhumi Airport is home to 14 current and integrating Star Alliance carriers in Thailand.

SEOul, SOuTH kOREA: A major renovation programme at Incheon created space for Alliance carriers in Terminal 1, Concourse A. The third phase of development will see additional terminal and transportation infrastructure by 2015.

BEIJIng, CHInA: Customers travelling to and from Beijing Capital International Airport are using the new Terminal 3, the largest such facility in the world.

SHAngHAI, CHInA: In Pudong’s new Terminal 2, Air China has its checkin counters in area H while the other Star Alliance members have checkin areas in B, C, D and E. Air China has added routes to replace those formerly served by Shanghai Airlines (which left the Alliance in October) as part of its plan to grow its Shanghai fleet by more than 35% by 2015 and is leading efforts to develop a new Air China lounge to serve the Alliance members at Pudong.

nEW DElHI, InDIA: Star Alliance is the first airline alliance to establish joint passenger amenities and related infrastructure at the newly opened Terminal 3 at Indira Gandhi International Airport. Checkin counters and back offices for member carriers are located together. Austrian, Continental Airlines, Lufthansa and SWISS share a joint ticket desk that is accessible from inside and outside the terminal. Future member Air India is also located in the same area.

TOkYO, JAPAn: Narita Airport Terminal 1 — South Wing in 2006 was a major collocation project in Asia and continues to be a showcase for the advantages of moving together, including the development of Alliance bank schedules and achieving reduced connecting times for customers.

TOkYO, JAPAn: Tokyo International Airport became Tokyo’s second international airport after the opening of the new International Terminal in October. ANA, Air China, Asiana, Singapore and THAI are operating from the new terminal. Star Alliance is the largest alliance at Haneda and the only alliance with collocated checkin and common baggage services.

nAgOYA, JAPAn: Nagoya’s Centrair Airport was the first MuoR project in Asia. Built in 2005, it has the longest continuously operating lounge in Star Alliance design.

39

SãO PAulO, BRAZIl: Initial planning and simulations have been done in support of MuoR at São Paulo-Guarulhos International Airport. Efforts are being made to optimise GRU as a Star Alliance hub to leverage the strength of Brazilian home carrier TAM coinciding with the opening of Terminal 3 in 2014.

lOS AngElES, uSA: A Star Alliance lounge was built in the Tom Bradley International Terminal to look after interna-tional passengers. Construction as part of the expansion programme in support of the LAx Masterplan will provide more opportunities for Alli-ance improvements through 2015.

40

BARCElOnA, SPAIn: A new terminal opened in June, housing Spanair and the 13 other member carriers flying to Barcelona. Star Alliance was the first alliance to move to the new facility.

WARSAW, POlAnD: After Warsaw’s Terminal 2 began hosting international flights, other Alliance carriers joined LOT in Terminal 2.

ATHEnS, gREECE: Now that the EC has ruled against the Aegean/ Olympic merger, collocation activities for the 17 members serving Athens will resume.

BRuSSElS, BElgIum: Carriers have moved together into a dedicated section of the main terminal. Checkin and ticketing counters are together and Alliance branding is in place for easy location by customers, with more development planned for 2011.

BERlIn, gERmAnY: The merging of the three Berlin-area airports (Schönefeld, Tegel and Tempelhof) into one new airport, Berlin Willy Brandt International Airport, opening in 2012 has opened the door to a new MuoR project. Alliance cooperation will be key to ensuring a strong Star Alliance position.

munICH, gERmAnY: In an airport consistently listed among the best in the world for the smoothness of its international transfer experience, Star Alliance members’ checkin counters have been moved together.

lOnDOn, u.k.: 15 of 21 member airlines have moved to Terminal 1 at London’s Heathrow Airport temporarily while Terminal 2 for Star Alliance is built.

PARIS, FRAnCE: Paris is a major market for Star Alliance, with 24 current and integrating members counting Charles de Gaulle Airport a major destination. Checkin desks, ticketing counters and baggage services are collocated in Terminal 1 and development will continue through 2012.

HElSInkI, FInlAnD: All Star Alliance Schengen carriers have moved their operations into T1 offering a common checkin including common self-service kiosks for customers. SAS built a new lounge for Star Alliance customers in the departure area.

CAIRO, EgYPT: A new terminal opened in 2009 to house Star Alliance carriers. Four EGYPTAIR lounges, built in the Star Alliance design, are in the terminal.

VIEnnA, AuSTRIA: Though the construction of the new SKYLINK terminal to house the Star Alliance members was halted mid-way through completion due to cost overruns and the global economic crisis, work resumed in the summer towards an opening in 2012 paving the way for resumption of MuoR activities.

mOSCOW, RuSSIA: The carriers flying into Domodedovo Airport have moved their checkin and ticketing counters into a dedicated area in the main departure hall of the international terminal.

41

LOUNGES

Lounge access benefits get clearer communication

There is no doubt that lounge access is an

important feature for frequent flyers, for

comfort before a long flight, or simply as a quiet

place to get some last minute work done. Re-

search frequently points out that lounges are

second in importance only to earning points

(or miles) for flights as a benefit.

Star Alliance has taken steps to make lounge

access rules clearer for customers. Which lounges

can Gold-level customers access? What about

Silver-level customers?

One of the communication pieces to

customers was an advertisement in in-flight

magazines and other carrier communication

channels to alert Gold-level customers that they

have access to more than 970 lounges

in 181 countries.

An important communication element was

the introduction of the lounge finder on

www.staralliance.com. The tool helps

customers find their way to any of the lounges,

and get at-a-glance information about which

lounges they are entitled to access based on the

Alliance’s global lounge access policy.

“Before the lounge finder tool was created,

customers could find only limited information about

a lounge they were interested in on individual

member carrier websites,” said Mark Rodrigues,

Manager, Lounges. “With our tool, customers

can search by city, airport, airline and even by

terminal. They can find the name and type of

lounge, as well as the location, walking directions,

42

opening hours, details of amenities and services

provided, along with photos and maps. It has prov-

en to be a big help to our premium customers who

count on relaxing in our lounges when they travel.”

Along the way, Star Alliance has used customer

surveys and comment cards to implement

quality and service improvements at the lounges,

as well as how they are managed and operated

with a view to keeping operating costs down

for the airlines.

A major service improvement occurred after

the collocation of 15 Star Alliance carriers in

Terminal 1 at London’s Heathrow Airport.

Customer satisfaction ratings improved across

the board, with overall lounge satisfaction jumping

22 percentage points.

43

“Information Technology activities should be

driven by business needs to ensure resources are

spent pursuing the right objectives,” said Justin

Erbacci, Vice President, IT.

Erbacci said this is not simply about introducing

new technologies, or technology for technology’s

sake. “We should be aligned with the direction our

business and member carriers are moving. It also

is important that IT be involved with business in

product strategy and planning discussions from the

beginning. That way IT can propose technology as

a catalyst for change, identify potential technical

constraints and deployment costs, help reduce the

complexity of solutions, and make architectural and

infrastructural adaptations to ensure IT can support

business strategies.”

The Alliance’s mission is to work together with

the members to help them realise additional value

that they could not achieve on their own. From

an IT perspective, this involves facilitating efficient

messaging across the member carrier IT systems

and supporting processes that provide a more

seamless interline customer experience. Two

good examples of this are StarNet, which allows

different carrier reservation systems to “talk” to

one another, and the Common IT Platform.

(see details on next page).

Erbacci believes that introducing more

technology is not always required. Existing plat-

forms and infrastructures should be used to

deliver additional value. “We have a terrific

opportunity to use the products and infrastructure

we know are working very well for the carriers. It’s

a matter of determining where the airlines

want to go from a business per-

spective and then building

on that foundation.”

Existing Alliance products were developed

based on the business needs of the carriers and

their customers. And Erbacci cautions that IT

needs to continue to work hand-in-hand with the

carriers rather than developing technology the

airlines aren’t ready to use. “Technology is only

as good as it is used by the business to bring

additional value.”

One of the areas where Erbacci would like to

add focus is how Star Alliance carriers can make

the best use of IT investments across the Alliance

through the reuse of technical assets. “The more

we can find ways to overcome technology

obstacles by providing common IT

platforms and services

that are cost

effective and efficient

for the carriers and their

customers, we can

further differentiate

ourselves from our

competitors and

provide the

benefits that

customers and

airlines are

looking for,”

said Erbacci.

IT aligns with carrierbusiness objectives

INFORMATION TECHNOLOGY

44

The Star Alliance Common

IT Platform (CITP), which

provides booking, ticketing

and departure control ser-

vices, has gained a critical

mass within the Alliance, with

15 member airlines now hav-

ing executed agreements to

migrate to CITP, a further three

negotiating

its adoption,

and three

more evalu-

ating the

platform to

see whether

it meets their

needs.

CITP,

provided by

Amadeus,

allows partici-

pating airlines

to share information and serve

Alliance customers better.

With so many airlines now

likely to come on board, Star

Alliance is starting to evaluate

new opportunities for

cooperation provided by the

common platform.

“The focus to date has been

getting the airlines to come on

board CITP,” said Erbacci. “The

next step needs to involve

leveraging CITP to develop

new products and services

that provide a more seamless

interline customer experience

within the Alliance.”

Star Alliance IT in

December completed a

major project to bring most

IT applications under a single

hosting and maintenance

service provider — Tata

Consultancy Services in

London (TCS). Previously

Star Alliance was working

with four service providers,

a less efficient and more

costly solution.

“We set out to improve

services and

achieve a

reduction in

costs of at

least 20% over

five years,”

Justin Erbacci,

Vice President

for IT, said. “In

fact, costs will

fall by 22%.”

The move to

a single provider

will also make it

possible to apply

industry standard

change manage-

ment practices and

realize improved

service levels.

“The project has

brought an overall

improvement to IT

service management.

We now have

end-to-end service level

agreements,” Erbacci said.

StarNet, the central

“translation” application

that allows IT systems at

individual airlines to talk to

each other, is poised for an

expansion programme in

2011 and beyond, making

it easier for airlines to work

together on intra-Alliance

customer-facing services.

StarNet was originally

created so individual airlines

would not need to set up

bilateral links to all the other

airlines in Star Alliance to

exchange information. Its

companion product, Star

Data Network, provides the

infrastructure for messages

to travel to and from airline

IT systems. Two important

applications — RAS (redemp-

tion availability sell) and FLIFO

(for flight information transfer)

— already run on top of the

StarNet application.

In 2011, the focus will be on

the development of new

products and services that can

make use of these existing IT

solutions. A major effort will

involve leveraging StarNet to

improve inter-airline through-

checkin. Other projects under

consideration are the com-

mon message transmission

tools for advanced passenger

information and common web

reward shopping for FFP

mileage/points redemption.

Single hosted IT solution for applications and services

Starnet expansion planned to improve intra-Alliance customer services

Common IT Platform gains critical mass as more airlines join

JUSTIN ERBACCI, VICE PRESIDENT, IT

45

EMPLOYEE RESOURCES

Building awareness puts employees in front row seats

While the Alliance produces a wide range of

products and services, it’s up to the employees of

the member airlines to deliver them. To that end,

the Alliance is involved in extensive communication

and training programmes.

The Alliance’s employee internet —

at www.starallianceemployees.com — is the best

place to find the latest news from Star Alliance,

publications, photos, video, news from the Alliance

and the industry.

Associated with the employee site are a number

of projects that combine to allow employees to

stay connected.

STAR AllIAnCE COnnECTS

Connects is a networking site — at

www.starallianceconnects.com — where

employees can find and get to know other airline

employees around the world.

STARQuIZ

StarQuiz is a fun way to learn about the Alliance.

Employees test their knowledge against

themselves and colleagues from other airlines.

PuBlICATIOnS

The monthly Network publication and poster

downloads are found on the employee site, as is

the latest version of the Reference Guide, which

contains airport maps, lounge access rules and

other important information to help employees

understand Alliance procedures. It’s available as

both HTML and PDF for printing.

Our In Focus magazine is similar to an annual

report, and provides a comprehensive review of

the major activities of the Alliance.

The Products & Services magazine focuses on

the work done by our Products & Services

business unit. Here employees find information

about lounges, airport planning, baggage

projects and the like.

SuPERSTARS PROJECT

Employees are encouraged to promote the

Alliance among their colleagues. The Superstars

group helps spread the word about the Alliance

throughout the workplaces.

46

Every day, employees at the member

airlines deliver products and services

developed by Star Alliance. To help them

understand the importance that these products

play in delivering top-notch customer service,

the Alliance is creating e-learning modules that

airlines can use for their employees.

Three modules were added in 2010 to the

Star Alliance Learning Network,

which provides a visual and

interactive educational

experience for employees.

One module helps

employees understand

how to manage at-risk

connections at airports

using the Alliance’s

Transfer Decision Tool.

The second module

explains the benefits

of selling Alliance

sales products. The

third module helps

employees from new member airlines become

familiar with their new roles. The courses are

designed for new and current employees, and

complement the training programmes already in

place at the airlines.

There are now eight modules in the online

series. All are available to employees through

airline training departments.

Online training helps employees stay informed

47

2D BARCODE

48

Star Alliance was instrumental in creating the 2D

Barcode, which enables much more information to

be stored and greatly expands how the barcode is

used. Because of the pioneering work done by the

2D Barcode working group within the Alliance, this

breakthrough technology is now used widely

throughout the airline industry.

Originally, barcodes carried data in a one-dimen-

sional format. The new two dimensional barcodes

replace lines with patterns of squares, dots and

other geometric patterns, which allows for a wider

range of use and more data. This type of barcode

expands the use to mobile phones and other

hand-held devices, which makes travel easier and

more efficient for customers and saves time and

money for the airlines.

This innovative achievement was recognised by

Star Alliance with the selection of the 2D Barcode

team for this year’s CEO award delivered at the

CEO meeting in New Zealand in December.

The Star Alliance CEO Award recognises the

outstanding and unique contributions of individuals

or teams that have demonstrated active

leadership and excellence in supporting the

Alliance in securing long-term profitability for

member carriers by driving projects and initiatives

that are focused on high-value

international travellers.

2D Barcode breakthrough honoured with Star Alliance CEO Award

THE WInnERS OF THE 2D BARCODE WORkIng gROuP:

Nine carriers were represented in the 2D Barcode working group. Receiving the

award were: Alessandro nocciolo, TAP; Cristina Cardoso, TAP;

Dhunradee Saengruang, THAI; Saengdao kamnerdmee, THAI;

Frank matuszek, United; lynda Oros, United; Hyo kyeong lee,

Asiana; Johan Bygden, SAS; luc Desmarais, Air Canada;

Patrice Ouellette, Air Canada; marcus Juech, Lufthansa;

ulf lengemann, Lufthansa; Sandra Au, Singapore;

Takeshi Iwakiri, ANA; Taku Hashimoto, ANA.

OTHER WInnERS OF THE CEO AWARD InCluDED:

• Robert Sturtz, Vice President Fuel, United Airlines and Thorsten lange,

Director Fuel, Lufthansa for their work in joint fuel purchasing initiatives;

• marilee Purdy, Continental for her work in promoting the Alliance

at the airport level;

• John Powell, Strategic Analyst, International Revenue Management

at Continental received a special award for his work with Star Alliance’s

Innovation team.

49

ALLIANCE FACTS & FIGURES

Alliance Members - 2010

Adria AirwaysAegean AirlinesAir CanadaAir ChinaAir New ZealandANAAsiana AirlinesAustrianBlue 1BmiBrussels AirlinesContinental AirlinesCroatia AirlinesEGYPTAIRLOT Polish AirlinesLufthansaScandinavian AirlinesSingapore AirlinesSouth African AirwaysSpanairSWISSTAMTAP PortugalTHAITurkish AirlinesUnitedUS Airways

FUTURE MEMBERS:Air IndiaAvianca-TACACopa AirlinesEthiopian Airlines

American AirlinesBritish AirwaysCathay PacificFinnairIberiaJALLANMalevMexicanaQantasRoyal JordanianS7 Airlines

FUTURE MEMBERS:Air BerlinKingfisher Airlines

AeroflotAeromexicoAir EuropaAir France – KLMAlitaliaChina SouthernCzech AirlinesDelta Air LinesKenya AirwaysKorean Air LinesTaromVietnam Airlines

FUTURE MEMBERS:Aerolineas ArgentinasChina AirlinesChina EasternGaruda IndonesiaMEASaudi ArabianShanghai

A Five-year Overview

2005

2006

2007

2008

2009

Revenue Passengerkm in billion

858

926

926

1,205

1,189

Passengerscarried in million

401

433

433.4

591.7

579

Revenue billion$ US

113.0

123.4

123.4

170.9

160.0

world share %

27.0%

29.1%

29.3%

26.4%

26.4%

world share %

26.0%

28.1%

28.1%

24.9%

25.1%

world share %

28.0%

29.3%

29.3%

28.2%

28.8%

50

KEY STATISTICS

Available Seat Kilometres 2010

Revenue Passenger Kilometres 2010

Global PassengerShares 2010

Operating RevenueShares 2010

16.0%

16.4%

26.4%

41.2%

OTHERS

in billion:

Star Alliance

1,557

oneworld

948

SkyTeam

969 in billion:

Star Alliance

1,189

oneworld

729

SkyTeam

752

16.2%

16.7%

26.4%

40.7%

OTHERS

13.5%

15.5%

25.1%

45.9%

OTHERS

in million:

Star Alliance

579

oneworld

312

SkyTeam

358 $US billion:

Star Alliance

160

oneworld

88

SkyTeam

100

15.8%

18.0%

28.8%

37.4%

OTHERS

51

NETWORK OVERVIEW Q4 I 2010 – TRAFFIC AREAS

2010-2011 Capacity Shares Within Traffic Areas

north America

Star Alliance 32%oneworld 14%SkyTeam 20%Others 34%

South America


Africa


Europe

Star Alliance 22%oneworld 9%SkyTeam 12%Others 57% Asia


Oceania


middle East


Central America & Caribbean


Countries

181

Airports

1,160

Daily departures

21,084

Daily codeshare flights

23,144

Airports

Daily departures

NorthAmerica

349

10,336

CentralAmerica & Caribbean

49

86

SouthAmerica

102

1,114

Europe

295

5,429

MiddleEast

22

121

Africa

97

647

Asia

223

2,755

Oceania

49

598

Data reflects capacity offered in the year to June 30, 2011

52

ALLIANCE COMPARISONS

Countries Servedby Alliance

Airports Servedby Alliance

Daily Departuresby Alliance

Daily CodeshareFlights by Alliance

200

180

160

140

120

100

80

60

40

20

0

1200

1100

1000

900

800

700

600

500

400

300

200

100

0

25,000

22,500

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

2010

181

138

162

Sta

r A

llia

nc

e

on

ew

orl

d

SkyTe

am

2010

1,160

SkyTe

am

758

on

ew

orl

d

2010

SkyTe

am

8,115

on

ew

orl

d

2010

21,084

11,489

25,000

22,500

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

SkyTe

am

23,144

4,915

Sta

r A

llia

nc

e

Sta

r A

llia

nc

e

Sta

r A

llia

nc

e

853

8,436

53

CREDITS

Responsible

Christian Klick, Vice-President, Corporate Office

Janet Northcote, Director, Internal Communication

Garry Bridgewater, Editor

Art direction and layout

Rachel Niebergal, Peridot Design, Calgary, Canada

Photography

Star Alliance member airlinesStar Alliance staffSimon AughtonTed FahnMelanie BauerFrank Socha

all other photographs, courtesy stockxchnge.com and flickr.com under the creative commons license

54

55

www.staralliance.com www.starallianceemployees.com

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