The Internet is not lazy Airlines used to benefit from manual search habits –Itineraries typically...

Work Hard. Fly Right. SM

Revenue Management from an eCommerce Point-of-View

Bill BrungerVP, Dist Plng and RDS

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The Internet is not lazyAirlines used to benefit from manual search habitsItineraries typically chosen from the top two lines on the availability screenRelative difficulty arraying schedule options by priceOdd end-to-end itineraries required manual searchThe Inefficiency Surplus was substantial

Think About the ComparisonGRAPHIC: Green screen availability display vs. Internet sort

Robotic Programs Further Improve the EfficiencySecondary search algorithms further exaggerate the issue Increased availability requests

The Internet Finds Unintended ItinerariesGRAPHIC: Orbitz screen with end-to-end connecting itinerary

The Inefficiency Surplus was Substantial We did a small, statistically insignificant study which gave an optimal answerAcross 50 varied itineraries, the Online Travel Agencies returned a fare on average 21% below that from the top 2 lines of GDSWe estimate that 17+ points were from enhanced search capabilities Extreme case, but directionally valid

Internet Sites Exaggerate Anomalies and ConfusionsComprehensive searchesTips to find alternativesEditing-by-omission cant happenBut whatever editing is done is more transparentCustomers keep checking until departure

AND the Internet Can Be Taught Bad Tricks Internet engines can (and sometimes do) string together local availability when O&D seats are unavailableOne impetus is search efficiency: It is easier to do a comprehensive search based on local (I.e. AVS) availability and make a guess about O&D availability

Peter B.: Bad Tricks Are Costly Most US cxs will pass 25% penetration soon50% reduction in O&D control efficiencyInternet sites (incl. the carriers) that dont cheat will be uncompetitive

Chart2

0.0010.0011997

0.00750.0061998

0.0180.0160.001

0.03120.0280.0079

0.04930.04410.0099

0.06310.05020.0239

0.07670.080.01

0.0950.090.0115

0.130.10.0126

0.1550.110.0137

Online Revenues as a % of Total

Continental.com

Standard OLTA's

Opaque Agencies

2001

Comparison of Onshore Distribution CostsTOTAL ITEM EXPENSE BASIS

Full Year 2001

(000's)Agency ChannelsDirect Channels

Includes Virgin spoke, Express and CMI12345678910111213

Book RES/ Ticket AGY%Book AGY/ Ticket AGY%Major On-Line Agencies%Orbitz%Priceline%Hotwire%Direct Connect%Corporate eService%Co.com%OAL%CTO%ATO%RES%Total%

ONSHORE FLOWN REVENUE$279,4184.11%$4,344,11563.88%$299,9324.41%$37,4990.55%$29,7500.44%$7,6930.11%0.00.00%0.00.00%$335,1204.93%$105,6661.55%$119,3151.75%$258,1703.80%$983,59214.46%$6,800,271100.00%

(%'s associated with revenues represent penetration rates)

EXPENSES

Base Commissions$7,9232.84%$147,0123.38%$11,2833.76%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%$2,7132.57%0.00.00%0.00.00%0.00.00%$168,9302.48%

Upfront Override Commissions$1,8250.65%$28,5890.66%0.00.00%$1,7274.61%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$32,1410.47%

Backend Override Commissions$4,3921.57%$66,4761.53%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$70,8681.04%

Commissions: Subtotal$14,1405.06%$242,0775.57%$11,2833.76%$1,7274.61%0.00.00%0.00.00%0.0--0.00.00%$2,7132.57%0.00.00%0.00.00%0.00.00%$271,9394.00%V15.55

CRS Fees: Subtotal$6,0932.18%$145,7673.36%$16,1985.40%$1,7104.56%$1,5835.32%0.00.00%0.0-0.0-$3,2200.96%0.00.00%$2600.22%$5010.19%$2,7480.28%$178,0812.62%V10.18

RES Agent Commissions$4120.15%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%$1870.16%$3570.14%$7,6750.78%$8,6300.13%V

Reservations Processing Ctr. (TBM) & ESD$1370.05%$1,5260.04%$2200.07%$300.08%$290.10%$80.11%0.0-0.0-$2,1260.63%0.00.00%$1040.09%$1980.08%$2,4600.25%$6,8370.10%V

Expenses attributable to RES booking and ticketing$6,2062.22%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%$1,9661.65%$4,8471.88%$36,4663.71%$49,4850.73%V

Res Costs directly allocated to Agencies$1,2250.44%$13,7950.32%$2,0510.68%$3210.86%$2800.94%$690.90%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$17,7420.26%V

PNR Modification, Cancels, Recons & Seat Sel$4450.16%$4,9900.11%$7350.25%$1110.30%$990.33%$250.33%0.0-0.0-0.00.00%$1980.19%$1,9631.65%$3,7651.46%$20,6842.10%$33,0160.49%F

RES: Flifo, Baggage, Reward calls, other$2,7310.98%$30,5460.70%$4,4721.49%$6591.76%$5962.00%$1552.02%0.0-0.0-$4,0431.21%$1,2071.14%$1,2351.03%$2,3660.92%$13,0201.32%$61,0280.90%F

RES Expenses: Subtotal$11,1553.99%$50,8571.17%$7,4782.49%$1,1212.99%$1,0033.37%$2583.35%0.0-0.0-$6,1701.84%$1,4051.33%$5,4554.57%$11,5334.47%$80,3048.16%$176,7382.60%10.10

Sales Overhead$1,6160.58%$25,8210.59%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$27,4380.40%F

Revenue Programs Overhead$960.03%$1,5320.04%$1070.04%$150.04%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,7500.03%F

Revenue Analysis Overhead0.00.00%0.00.00%0.00.00%0.00.00%$880.30%$240.31%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1120.00%F

Incremental Distribution Planning Overhead:0.00%0.00%0.00%0.00%0.00%0.00%--0.00%0.00%0.00%0.00%0.00%

CRS Administration Overhead$220.01%$3440.01%$240.01%$30.01%0.00.00%0.00.00%0.0-0.0-$270.01%0.00.00%0.00.00%0.00.00%0.00.00%$4200.01%F

Website Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-$8910.27%0.00.00%0.00.00%0.00.00%0.00.00%$8910.01%F

On-Line Agency Administration Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%F

Total CTO Expenses0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-$9290.28%0.00.00%$3,9793.33%$5380.21%$2,9690.30%$8,4150.12%V/F

Ticketing Fees: Microsoft:0.00%0.00%0.00%0.00%0.00%0.00%--0.00%0.00%0.00%0.00%0.00%0.00%

Variable cost (Transaction fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-$4,8951.46%0.00.00%0.00.00%0.00.00%0.00.00%$4,8950.07%V

Fixed cost (License & Monthly Host fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-$1830.05%0.00.00%0.00.00%0.00.00%0.00.00%$1830.00%F

Ticketing Fees: TRX0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-$2,9670.89%0.00.00%0.00.00%0.00.00%0.00.00%$2,9670.04%V

ATO Rent and Payroll dedicated to ticket sales0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%0.00.00%$11,2534.36%0.00.00%$11,2530.17%V/F

Bad Debt Expense$2930.10%$4,3800.10%$2920.10%$170.04%$280.09%$100.13%0.0-0.0-$2750.08%$880.08%$990.08%$2130.08%$8090.08%$6,5030.10%V

Credit Card Discount Fees$5,5501.99%$86,3761.99%$7,3982.47%$8912.37%0.00.00%0.00.00%0.0-0.0-$7,8512.34%$2,0991.99%$2,3741.99%$5,1341.99%$23,0142.34%$140,6882.07%V8.04

AOL Acquisition Fee$430.02%$6920.02%$490.02%$70.02%$50.02%$10.02%0.0-0.0-$3,3240.99%$170.02%$190.02%$410.02%$1590.02%$4,3580.06%F

Other Res&Sales$7990.29%$13,7760.32%$9300.31%$1230.33%$950.32%$120.16%0.0-0.0-2750.08%$600.06%$870.07%$1460.06%$5620.06%$16,8650.25%F

Revenue Accounting Costs$1,5360.55%10,8210.25%$6240.21%$830.22%$650.22%$160.21%0.0-0.0-$2080.06%$5520.52%$1770.15%$4190.16%$5990.06%$15,0990.22%V

Depreciation$230.01%$7430.02%$260.01%$40.01%0.00.00%0.00.00%0.0-0.0-0.00.00%0.00.00%$4550.38%0.00.00%0.00.00%$1,2500.02%F

Expenses allocated across all channels by revenue:

Advertising and publicity, excl. Advertising Credit$3,2031.15%$50,8051.17%$3,5261.18%$4851.29%$3531.19%$851.10%0.0-0.0-$3,9661.18%$1,2331.17%$1,3971.17%$3,0271.17%$11,5611.18%$79,6401.17%F

Advertising Credit$(2,683)-0.96%$(42,156)-0.97%$(3,002)-1.00%$(456)-1.22%$(311)-1.05%$(73)-0.95%0.0-0.0-$(3,392)-1.01%$(1,021)-0.97%$(1,179)-0.99%$(2,511)-0.97%$(9,761)-0.99%$(66,544)-0.98%F

OnePass Service Center Costs$2680.10%$4,2690.10%$2980.10%$430.11%$300.10%$70.09%0.0-0.0-$3360.10%$1030.10%$1180.10%$2550.10%$9750.10%$6,7010.10%F

Distribution Planning Exp. not previously allocated$1590.06%$2,5660.06%$1790.06%$260.07%$180.06%$40.05%0.0-0.0-$2020.06%$620.06%$710.06%$1530.06%$5860.06%4,0260.06%F

Overhead & Other Expenses: Subtotal$10,9263.91%$159,9693.68%$10,4503.48%$1,2413.31%3711.25%861.12%0.0-0.0-$22,9366.84%$3,1933.02%$7,5966.37%$18,6697.23%$31,4743.20%$266,9113.92%15.2617.32

Total Expenses$42,31415.14%$598,66913.78%$45,40915.14%$5,79815.46%$2,9579.94%$3444.47%0.0-0.0-$32,3269.65%$7,3116.92%$13,31111.16%$30,70211.89%$114,52711.64%$893,66813.14%

Avg. Price per round-trip ticket$354.11$496.59$233.86$200.04$174.30$172.32$0.00$0.00$288.77$306.00$336.92$381.19$263.54$388.77

Avg. Cost per round-trip ticket$53.62$68.44$35.41$30.93$17.33$7.71$0.00$0.00$27.85$21.17$37.59$45.33$30.69$51.09

Avg. Contribution Margin per round-trip ticket$300.48$428.15$198.45$169.11$156.98$164.61$0.00$0.00$260.91$284.83$299.33$335.86$232.86$337.68

# of Tickets (000's)7898,7481,28318717145001,1613453546773,73217,492

RANK by Contribution Margin$3$1$8$9$11$10$6$5$4$2$7

(highest to lowest)

Fixed2.41%2.16%2.45%2.72%3.27%3.12%0.00%0.00%2.94%1.76%3.49%6.46%3.84%2.66%

Variable12.74%11.62%12.69%12.74%6.67%1.35%0.00%0.00%6.71%5.16%7.67%5.43%7.80%10.49%

Average cost Per TicketAgency ChannelsDirect Channels



ONSHORE FLOWN REVENUE354.11496.59233.86200.04174.30172.320.00.00%0.00.00%288.77306.00336.92381.19263.54388.77


EXPENSES

Base Commissions10.042.84%16.813.38%8.803.76%0.0-0.0-0.0-0.0-0.0-0.0-7.862.57%0.0-0.0-0.0-9.662.48%

Upfront Override Commissions2.310.65%3.270.66%0.0-9.214.61%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-1.840.47%

Backend Override Commissions5.571.57%7.601.53%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-4.051.04%

Commissions: Subtotal17.925.06%27.675.57%8.803.76%9.214.61%0.0-0.0-0.0--0.0-7.862.57%0.0-0.0-0.0-15.554.00%V0.00

CRS Fees: Subtotal7.722.18%16.663.36%12.635.40%9.124.56%9.275.32%0.0-0.0-0.0-2.770.96%0.0-0.730.22%0.740.19%0.740.28%10.182.62%V0.00

RES Agent Commissions0.520.15%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.530.16%0.530.14%2.060.78%0.490.13%V

Reservations Processing Ctr. (TBM) & ESD0.170.05%0.170.04%0.170.07%0.160.08%0.170.10%0.180.11%0.0-0.0-1.830.63%0.0-0.290.09%0.290.08%0.660.25%0.390.10%V

Expenses attributable to RES booking and ticketing7.862.22%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-5.551.65%7.161.88%9.773.71%2.830.73%V

Res Costs directly allocated to Agencies1.550.44%1.580.32%1.600.68%1.710.86%1.640.94%1.550.90%0.0-0.0-0.0-0.0-0.0-0.0-0.0-1.010.26%V

PNR Modification, Cancels, Recons & Seat Sel0.560.16%0.570.11%0.570.25%0.590.30%0.580.33%0.570.33%0.0-0.0-0.0-0.570.19%5.541.65%5.561.46%5.542.10%1.890.49%F

RES: Flifo, Baggage, Reward calls, other3.460.98%3.490.70%3.491.49%3.511.76%3.492.00%3.472.02%0.0-0.0-3.481.21%3.501.14%3.491.03%3.490.92%3.491.32%3.490.90%F

RES Expenses: Subtotal14.143.99%5.811.17%5.832.49%5.982.99%5.883.37%5.773.35%0.0-0.0-5.321.84%4.071.33%15.404.57%17.034.47%21.528.16%10.102.60%0.00

Sales Overhead2.050.58%2.950.59%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-1.570.40%F

Revenue Programs Overhead0.120.03%0.180.04%0.080.04%0.080.04%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.100.03%F

Revenue Analysis Overhead0.0-0.0-0.0-0.0-0.520.30%0.540.31%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.010.00%F

Incremental Distribution Planning Overhead:0.0-0.0-0.0-0.0-0.0-0.0---0.0-0.0-0.0-0.0-0.0-0.0-

CRS Administration Overhead0.030.01%0.040.01%0.020.01%0.020.01%0.0-0.0-0.0-0.0-0.020.01%0.0-0.0-0.0-0.0-0.020.01%F

Website Overhead0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.770.27%0.0-0.0-0.0-0.0-0.050.01%F

On-Line Agency Administration Overhead0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-F

Total CTO Expenses0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.800.28%0.0-11.243.33%0.790.21%0.800.30%0.480.12%V/F

Ticketing Fees: Microsoft:0.0-0.0-0.0-0.0-0.0-0.0---0.0-0.0-0.0-0.0-0.0-0.0-

Variable cost (Transaction fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-4.221.46%0.0-0.0-0.0-0.0-0.280.07%V

Fixed cost (License & Monthly Host fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.160.05%0.0-0.0-0.0-0.0-0.010.00%F

Ticketing Fees: TRX0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-2.560.89%0.0-0.0-0.0-0.0-0.170.04%V

ATO Rent and Payroll dedicated to ticket sales0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-16.624.36%0.0-0.640.17%V/F

Bad Debt Expense0.370.10%0.500.10%0.230.10%0.090.04%0.160.09%0.230.13%0.0-0.0-0.240.08%0.250.08%0.280.08%0.320.08%0.220.08%0.370.10%V

Credit Card Discount Fees7.031.99%9.871.99%5.772.47%4.752.37%0.0-0.0-0.0-0.0-6.772.34%6.081.99%6.701.99%7.581.99%6.172.34%8.042.07%V0.00

AOL Acquisition Fee0.050.02%0.080.02%0.040.02%0.040.02%0.030.02%0.030.02%0.0-0.0-2.860.99%0.050.02%0.050.02%0.060.02%0.040.02%0.250.06%F

Other Res&Sales1.010.29%1.570.32%0.720.31%0.660.33%0.560.32%0.270.16%0.0-0.0-0.240.08%0.170.06%0.240.07%0.220.06%0.150.06%0.960.25%F

Revenue Accounting Costs1.950.55%1.240.25%0.490.21%0.440.22%0.380.22%0.370.21%0.0-0.0-0.180.06%1.600.52%0.500.15%0.620.16%0.160.06%0.860.22%V

Depreciation0.030.01%0.080.02%0.020.01%0.020.01%0.0-0.0-0.0-0.0-0.0-0.0-1.280.38%0.0-0.0-0.070.02%F

Expenses allocated across all channels by revenue:0.0-0.0-0.0-0.0-0.0-0.0---0.0-0.0-0.0-0.0-0.0-0.0-

Advertising and publicity, excl. Advertising Credit4.061.15%5.811.17%2.751.18%2.581.29%2.071.19%1.901.10%0.0-0.0-3.421.18%3.571.17%3.941.17%4.471.17%3.101.18%4.551.17%F

Advertising Credit(3.40)-0.96%(4.82)-0.97%(2.34)-1.00%(2.43)-1.22%(1.82)-1.05%(1.65)-0.95%0.0-0.0-(2.92)-1.01%(2.96)-0.97%(3.33)-0.99%(3.71)-0.97%(2.62)-0.99%(3.80)-0.98%F

OnePass Service Center Costs0.340.10%0.490.10%0.230.10%0.230.11%0.180.10%0.160.09%0.0-0.0-0.290.10%0.300.10%0.330.10%0.380.10%0.260.10%0.380.10%F

Distribution Planning Exp. not previously allocated0.200.06%0.290.06%0.140.06%0.140.07%0.110.06%0.090.05%0.0-0.0-0.170.06%0.180.06%0.200.06%0.230.06%0.160.06%0.230.06%F

Overhead & Other Expenses: Subtotal13.853.91%18.293.68%8.153.48%6.623.31%2.181.25%1.941.12%0.0-0.0-19.766.84%9.253.02%21.456.37%27.577.23%8.433.20%15.263.92%0.000.00

Total Expenses53.6215.14%68.4413.78%35.4115.14%30.9315.46%17.339.94%7.714.47%0.0-0.0-27.859.65%21.176.92%37.5911.16%45.3311.89%30.6911.64%51.0913.14%




# of Tickets (000's)7898,7481,28318717145001,1613453546773,73217,492


(highest to lowest)

Average cost for a $325 TicketAgency ChannelsDirect Channels



ONSHORE FLOWN REVENUE325.00325.00325.00325.00325.00325.00$325$325325.00325.00325.00325.00325.00325.00


EXPENSES

Base Commissions9.222.84%11.003.38%12.233.76%0.00%0.00%0.00%0.0-0.0-0.00%8.342.57%0.00%0.00%0.00%8.072.48%FR

Upfront Override Commissions2.120.65%2.140.66%0.00%7.492.30%0.00%0.00%0.0-0.0-0.00%0.00%0.00%0.00%0.00%1.540.47%V/FR/T

Backend Override Commissions5.111.57%4.971.53%0.00%0.00%0.00%0.00%0.0-0.0-0.00%0.00%0.00%0.00%0.00%3.391.04%VT

Commissions: Subtotal16.455.06%18.115.57%12.233.76%7.492.30%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%8.342.57%0.00.00%0.00.00%0.00.00%13.004.00%

CRS Fees: Subtotal7.722.38%16.665.13%12.633.89%9.122.81%9.272.85%0.00.00%0.00.00%0.00.00%2.770.85%0.00.00%0.730.23%0.740.23%0.740.23%10.183.13%VT

RES Agent Commissions0.520.16%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.530.16%0.530.16%2.060.63%0.490.15%VT

Reservations Processing Ctr. (TBM) & ESD0.170.05%0.170.05%0.170.05%0.160.05%0.170.05%0.180.06%0.00.00%0.00.00%1.830.56%0.00.00%0.290.09%0.290.09%0.660.20%0.390.12%VT

Expenses attributable to RES booking and ticketing7.862.42%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%5.551.71%7.162.20%9.773.01%2.830.87%VT

Res Costs directly allocated to Agencies1.550.48%1.580.49%1.600.49%1.710.53%1.640.50%1.550.48%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%1.010.31%VT

PNR Modification, Cancels, Recons & Seat Sel0.560.17%0.570.18%0.570.18%0.590.18%0.580.18%0.570.17%0.00.00%0.00.00%0.00.00%0.570.18%5.541.71%5.561.71%5.541.71%1.890.58%FT

RES: Flifo, Baggage, Reward calls, other3.461.06%3.491.07%3.491.07%3.511.08%3.491.07%3.471.07%0.00.00%0.00.00%3.481.07%3.501.08%3.491.07%3.491.07%3.491.07%3.491.07%FT

RES Expenses: Subtotal14.144.35%5.811.79%5.831.79%5.981.84%5.881.81%5.771.78%0.00.00%0.00.00%5.321.64%4.071.25%15.404.74%17.035.24%21.526.62%10.103.11%

Sales Overhead2.050.63%2.950.91%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%1.570.48%FT

Revenue Programs Overhead0.120.04%0.180.05%0.080.03%0.080.03%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.100.03%FT

Revenue Analysis Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.520.16%0.540.16%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.010.00%FT

Incremental Distribution Planning Overhead:0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%T

CRS Administration Overhead0.030.01%0.040.01%0.020.01%0.020.01%0.00.00%0.00.00%0.00.00%0.00.00%0.020.01%0.00.00%0.00.00%0.00.00%0.00.00%0.020.01%FT

Website Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.770.24%0.00.00%0.00.00%0.00.00%0.00.00%0.050.02%FT

On-Line Agency Administration Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%FT

Total CTO Expenses0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.800.25%0.00.00%11.243.46%0.790.24%0.800.24%0.480.15%V/FT

Ticketing Fees: Microsoft:0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%

Variable cost (Transaction fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%4.221.30%0.00.00%0.00.00%0.00.00%0.00.00%0.280.09%VT

Fixed cost (License & Monthly Host fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.160.05%0.00.00%0.00.00%0.00.00%0.00.00%0.010.00%FT

Ticketing Fees: TRX0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%2.560.79%0.00.00%0.00.00%0.00.00%0.00.00%0.170.05%VT

ATO Rent and Payroll dedicated to ticket sales0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%16.625.11%0.00.00%0.640.20%V/FT

Bad Debt Expense0.340.10%0.330.10%0.320.10%0.140.04%0.310.09%0.430.13%0.0-0.0-0.270.08%0.270.08%0.270.08%0.270.08%0.270.08%0.310.10%VR

Credit Card Discount Fees6.461.99%6.461.99%8.022.47%7.722.37%0.00%0.00%0.0-0.0-7.612.34%6.461.99%6.471.99%6.461.99%7.602.34%6.722.07%VR

AOL Acquisition Fee0.050.02%0.080.02%0.040.01%0.040.01%0.030.01%0.030.01%0.00.00%0.00.00%2.860.88%0.050.01%0.050.02%0.060.02%0.040.01%0.250.08%FT

Other Res&Sales1.010.31%1.570.48%0.720.22%0.660.20%0.560.17%0.270.08%0.00.00%0.00.00%0.240.07%0.170.05%0.240.08%0.220.07%0.150.05%0.960.30%FT

Revenue Accounting Costs1.950.60%1.240.38%0.490.15%0.440.14%0.380.12%0.370.11%0.00.00%0.00.00%0.180.06%1.600.49%0.500.15%0.620.19%0.160.05%0.860.27%VT

Depreciation0.030.01%0.080.03%0.020.01%0.020.01%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%1.280.40%0.00.00%0.00.00%0.070.02%FT

Expenses allocated across all channels by revenue:0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%

Advertising and publicity, excl. Advertising Credit3.731.15%3.801.17%3.821.18%4.201.29%3.851.19%3.591.10%0.0-0.0-3.851.18%3.791.17%3.811.17%3.811.17%3.821.18%3.811.17%FR

Advertising Credit(3.12)-0.96%(3.15)-0.97%(3.25)-1.00%(3.95)-1.22%(3.40)-1.05%(3.10)-0.95%0.0-0.0-(3.29)-1.01%(3.14)-0.97%(3.21)-0.99%(3.16)-0.97%(3.23)-0.99%(3.18)-0.98%FR

OnePass Service Center Costs0.310.10%0.320.10%0.320.10%0.370.11%0.330.10%0.300.09%0.0-0.0-0.330.10%0.320.10%0.320.10%0.320.10%0.320.10%0.320.10%FR

Distribution Planning Exp. not previously allocated0.200.06%0.290.09%0.140.04%0.140.04%0.110.03%0.090.03%0.00.00%0.00.00%0.170.05%0.180.06%0.200.06%0.230.07%0.160.05%0.230.07%FT

Overhead & Other Expenses: Subtotal13.164.05%14.194.37%10.733.30%9.883.04%2.680.83%2.500.77%0.00.00%0.00.00%20.746.38%9.702.98%21.176.51%26.238.07%10.103.11%13.694.21%

Total Expenses51.4615.83%54.7816.85%41.4212.74%32.479.99%17.835.49%8.282.55%0.00.00%0.00.00%28.838.87%22.116.80%37.3111.48%44.0013.54%32.359.95%46.9714.45%

Fixed8.442.60%10.233.15%5.981.84%5.681.75%6.071.87%5.751.77%0.00.00%0.00.00%8.592.64%5.441.67%11.733.61%24.477.53%10.303.17%10.143.12%

Variable43.0213.24%44.5513.71%35.4510.91%26.798.24%11.773.62%2.530.78%0.00.00%0.00.00%20.246.23%16.675.13%25.587.87%19.536.01%22.056.78%36.8411.33%

ATO F9,486,36883.9%

ATO V1,819,25216.1%

CTO F

CTO V

2000


Full Year 2000




ONSHORE FLOWN REVENUE$401,3745.39%$4,953,71466.52%$208,3582.80%0.00.00%$58,8150.79%0.00.00%0.00.00%0.00.00%$232,4953.12%$127,1641.71%$123,1221.65%$316,2174.25%$1,025,87013.78%$7,447,128100.00%


EXPENSES

Base Commissions$11,5052.87%$209,0954.22%$7,3653.53%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$3,4072.68%0.00.00%0.00.00%0.00.00%$231,3723.11%

Upfront Override Commissions$2,7100.68%$33,0600.67%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$35,7710.48%

Backend Override Commissions$8,6512.16%$106,8812.16%$1800.09%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$115,7121.55%

Commissions: Subtotal$22,8675.70%$349,0367.05%$7,5453.62%0.00.00%0.00.00%0.00.00%0.00.00%0.00%0.00.00%$3,4072.68%0.00.00%0.00.00%0.00.00%$382,8555.14%V

CRS Fees: Subtotal$8,8832.21%$137,4112.77%$7,4063.55%0.00.00%$1,4102.40%0.00.00%0.00.00%0.00.00%$1,3990.60%0.00.00%$2870.23%$6670.21%$3,1000.30%$160,5632.16%V

RES Agent Commissions$5430.14%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1750.14%$4060.13%$6,9710.68%$8,0950.11%V

Reservations Processing Ctr. (TBM) & ESD$1850.05%$1,6090.03%$1230.06%0.00.00%$500.08%0.00.00%0.00.00%0.00.00%$1170.05%0.00.00%$900.07%$2100.07%$2,0820.20%$4,4660.06%V

Expenses attributable to RES booking and ticketing$7,4261.85%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,6651.35%$4,9661.57%$31,8443.10%$45,9010.62%V

Res Costs directly allocated to Agencies$1,4360.36%$12,6560.26%$9820.47%0.00.00%$3940.67%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$15,4680.21%V

PNR Modification, Cancels, Recons & Seat Sel$4900.12%$4,2710.09%$3290.16%0.00.00%$1310.22%0.00.00%0.00.00%0.00.00%0.00.00%$1700.13%$1,5191.23%$3,5331.12%$16,5121.61%$26,9550.36%F

RES: Flifo, Baggage, Reward calls, other$3,6610.91%$32,1640.65%$2,4851.19%0.00.00%$1,0011.70%0.00.00%0.00.00%0.00.00%$2,3701.02%$1,2861.01%$1,1700.95%$2,7160.86%$12,7391.24%$59,5910.80%F

RES Expenses: Subtotal$13,7413.42%$50,6991.02%$3,9191.88%0.00.00%$1,5762.68%0.00.00%0.00.00%0.00.00%$2,4881.07%$1,4561.15%$4,6193.75%$11,8303.74%$70,1486.84%$160,4772.15%

Sales Overhead$2,0020.50%$24,8330.50%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$26,8350.36%F

Revenue Programs Overhead$1280.03%$1,5340.03%$640.03%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,7250.02%F

Revenue Analysis Overhead0.00.00%0.00.00%0.00.00%0.00.00%$1870.32%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1870.00%F

Incremental Distribution Planning Overhead:0.00%0.00%0.00%0.00%0.00%0.00%

CRS Administration Overhead$250.01%$3160.01%$130.01%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$150.01%0.00.00%0.00.00%0.00.00%0.00.00%$3700.00%F

Website Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$5830.25%0.00.00%0.00.00%0.00.00%0.00.00%$5830.01%F

On-Line Agency Administration Overhead0.00.00%0.00.00%$600.03%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$600.00%F

Total CTO Expenses0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$5640.24%0.00.00%$3,5152.85%$6530.21%$3,0550.30%$7,7870.10%V/F

Ticketing Fees: Microsoft:0.00%0.00%0.00%0.00%0.00%0.00%

Variable cost (Transaction fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$7,3943.18%0.00.00%0.00.00%0.00.00%0.00.00%$7,3940.10%V

Fixed cost (License & Monthly Host fee)0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$4000.17%0.00.00%0.00.00%0.00.00%0.00.00%$4000.01%F

Ticketing Fees: TRX0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$7,0213.02%0.00.00%0.00.00%0.00.00%0.00.00%$7,0210.09%V

ATO Rent and Payroll dedicated to ticket sales0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$11,1733.53%0.00.00%$11,1730.15%V/F

Bad Debt Expense$2910.07%$3,8660.08%$1720.08%0.00.00%$470.08%0.00.00%0.00.00%0.00.00%$3360.14%$1720.14%$1670.14%$4300.14%$1,4220.14%$6,9030.09%V

Credit Card Discount Fees$7,8031.94%$96,3351.94%$5,1392.47%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$5,3322.29%$2,4731.94%$2,3941.94%$6,1491.94%$23,4932.29%$149,1202.00%V

AOL Acquisition Fee$760.02%$9310.02%$390.02%0.00.00%$110.02%0.00.00%0.00.00%0.00.00%$1,4440.62%$240.02%$230.02%$590.02%$1930.02%$2,8000.04%F

Other Res&Sales$1,2340.31%$16,0300.32%$5450.26%0.00.00%$1370.23%0.00.00%0.00.00%0.00.00%1260.05%$480.04%$790.06%$1140.04%$3750.04%$18,6880.25%F

Revenue Accounting Costs$2,2860.57%13,7770.28%$5780.28%0.00.00%$1240.21%0.00.00%0.00.00%0.00.00%$1790.08%$7070.56%$3890.32%$9640.30%$7830.08%$19,7870.27%V

Depreciation$140.00%$4600.01%$190.01%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$2820.23%0.00.00%0.00.00%$7750.01%F

Expenses allocated across all channels by revenue:0.00%0.00%

Advertising and publicity, excl. Advertising Credit$4,7771.19%$58,1051.17%$2,4191.16%0.00.00%$6851.16%0.00.00%0.00.00%0.00.00%$2,6941.16%$1,4791.16%$1,4401.17%$3,7091.17%$11,9911.17%$87,3001.17%F

Advertising Credit$(2,264)-0.56%$(27,841)-0.56%$(1,161)-0.56%0.00.00%$(330)-0.56%0.00.00%0.00.00%0.00.00%$(1,294)-0.56%$(713)-0.56%$(691)-0.56%$(1,776)-0.56%$(5,748)-0.56%$(41,819)-0.56%F

OnePass Service Center Costs$3340.08%$4,1650.08%$1780.09%0.00.00%$480.08%0.00.00%0.00.00%0.00.00%$1990.09%$1070.08%$1030.08%$2660.08%$8660.08%$6,2660.08%F

Distribution Planning Exp. not previously allocated$1700.04%$2,1450.04%$910.04%0.00.00%$260.04%0.00.00%0.00.00%0.00.00%$1010.04%$560.04%$540.04%$1370.04%$4450.04%3,2250.04%F

Overhead & Other Expenses: Subtotal$16,8774.20%$194,6573.93%$8,1563.91%0.00.00%9361.59%0.00.00%0.00.00%0.00.00%$25,09310.79%$4,3543.42%$7,7546.30%$21,8786.92%$36,8743.59%$316,5804.25%

Total Expenses$62,36815.54%$731,80314.77%$27,02612.97%0.0-$3,9226.67%0.0-0.00.00%0.00.00%$28,98012.46%$9,2187.25%$12,66110.28%$34,37610.87%$110,12210.73%$1,020,47413.70%




# of Tickets (000's)1,1399,94976503080007303973628403,93718,428

RANK by Contribution Margin$4$1$7$10$9$10$10$10$6$5$3$2$8

(highest to lowest)

Fixed2.65%2.36%2.44%0.00%3.23%0.00%0.00%0.00%2.85%1.93%3.23%5.73%3.64%2.73%

Variable12.89%12.41%10.53%0.00%3.44%0.00%0.00%0.00%9.61%5.32%7.05%5.14%7.09%10.97%

1Q01


1st QTR 2001




ONSHORE FLOWN REVENUE$80,1084.31%$1,248,52867.15%$69,8893.76%0.00.00%$4,2370.23%$1,2480.07%0.00.00%0.00.00%$76,0434.09%$29,6291.59%$29,4291.58%$73,4683.95%$246,76113.27%$1,859,340100.00%


EXPENSES

Base Commissions$2,2462.80%$43,7833.51%$2,3253.33%0.0-0.0-0.0-0.0-0.0-0.0-$1,4224.80%0.0-0.0-0.0-$49,7762.68%

Upfront Override Commissions$4780.60%$7,4490.60%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$7,9270.43%

Backend Override Commissions$1,4891.86%$23,2061.86%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$24,6951.33%

Commissions: Subtotal$4,2135.26%$74,4385.96%$2,3253.33%0.0-0.0-0.0-0.0--0.0-1,4224.80%0.0-0.0-0.0-$82,3984.43%

CRS Fees: Subtotal$2,0682.58%$43,2963.47%$3,3234.75%0.0-$1182.78%0.0-0.0-0.0-8231.08%0.0-$740.25%$1560.21%$7750.31%$50,6332.72%

RES Agent Commissions$1100.14%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$430.14%$900.12%$2,0210.82%$2,2630.12%

Reservations Processing Ctr. (TBM) & ESD$410.05%$4580.04%$500.07%0.0-$30.07%$10.09%0.0-0.0-$2840.37%0.0-$260.09%$550.07%$5990.24%$1,5170.08%

Expenses attributable to RES booking and ticketing$1,9182.39%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$5201.77%$1,4141.92%$9,6093.89%$13,4610.72%

Res Costs directly allocated to Agencies$3530.44%$3,9120.31%$4240.61%0.0-$250.60%$100.81%0.0-0.0-0.0-0.0-0.0-0.0-0.0-$4,7240.25%

PNR Modification, Cancels, Recons & Seat Sel$1300.16%$1,4430.12%$1560.22%0.0-$90.22%$40.30%0.0-0.0-0.0-$530.18%$5281.79%$1,1151.52%$5,5422.25%$8,9810.48%

RES: Flifo, Baggage, Reward calls, other$8231.03%$9,1210.73%$9881.41%0.0-$591.39%$231.88%0.0-0.0-$9081.19%$3381.14%$3191.08%$6740.92%$3,3491.36%$16,6010.89%

RES Expenses: Subtotal$3,3754.21%$14,9351.20%$1,6172.31%0.0-$962.27%$383.08%0.0-0.0-$1,1921.57%$3911.32%$1,4364.88%$3,3484.56%$21,1208.56%$47,5472.56%

Sales Overhead$4110.51%$6,4100.51%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$6,8210.37%

Revenue Programs Overhead$260.03%$4080.03%$230.03%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$4570.02%

Revenue Analysis Overhead0.0-0.0-0.0-0.0-$230.55%$70.55%0.0-0.0-0.0-0.0-0.0-0.0-0.0-$300.00%

Incremental Distribution Planning Overhead:--------------

CRS Administration Overhead$60.01%$880.01%$50.01%0.0-0.0-0.0-0.0-0.0-$50.01%0.0-0.0-0.0-0.0-$1040.01%

Website Overhead0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2340.31%0.0-0.0-0.0-0.0-$2340.01%

On-Line Agency Administration Overhead0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-

Total CTO Expenses0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2000.26%0.0-$1,0073.42%$1490.20%$7400.30%$2,0960.11%

Ticketing Fees: Microsoft:--------------

Variable cost (Transaction fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2,9293.85%0.0-0.0-0.0-0.0-$2,9290.16%

Fixed cost (License & Monthly Host fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$1100.14%0.0-0.0-0.0-0.0-$1100.01%

Ticketing Fees: TRX0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2,6593.50%0.0-0.0-0.0-0.0-$2,6590.14%

ATO Rent and Payroll dedicated to ticket sales0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2,5583.48%0.0-$2,5580.14%

Bad Debt Expense$840.10%$1,3040.10%$730.10%0.0-$40.10%$10.10%0.0-0.0-$690.09%$270.09%$270.09%$660.09%$2230.09%$1,8780.10%

Credit Card Discount Fees$1,5761.97%$24,5611.97%$1,7242.47%0.0-0.0-0.0-0.0-0.0-$1,7682.33%$5831.97%$5791.97%$1,4451.97%$5,7382.33%$37,9742.04%

AOL Acquisition Fee$110.01%$1650.01%$90.01%0.0-$10.01%$00.01%0.0-0.0-$7470.98%$40.01%$40.01%$100.01%$330.01%$9830.05%

Other Res&Sales$2320.29%$3,8580.31%$1920.28%0.0-$100.23%$20.17%0.0-0.0-$560.07%$150.05%$190.07%$370.05%$1240.05%$4,5450.24%

Revenue Accounting Costs$4130.52%2,7720.22%$1550.22%0.0-$100.24%$30.24%0.0-0.0-$490.06%$1410.47%$400.13%$1370.19%$1350.05%$3,8540.21%

Depreciation$50.01%$1630.01%$70.01%0.0-0.0-0.0-0.0-0.0-0.0-0.0-$1000.34%0.0-0.0-$2750.01%

Expenses allocated across all channels by revenue:--------------

Advertising and publicity, excl. Advertising Credit$9731.22%$15,1711.22%$8491.22%0.0-$511.22%$151.22%0.0-0.0-$9241.22%$3601.22%$3581.22%$8931.22%$2,9981.22%$22,5921.22%

Advertising Credit$(539)-0.67%$(8,402)-0.67%$(470)-0.67%0.0-$(29)-0.67%$(8)-0.67%0.0-0.0-$(512)-0.67%$(199)-0.67%$(198)-0.67%$(494)-0.67%$(1,661)-0.67%$(12,512)-0.67%

OnePass Service Center Costs$790.10%$1,2300.10%$690.10%0.0-$40.10%$10.10%0.0-0.0-$750.10%$290.10%$290.10%$720.10%$2430.10%$1,8310.10%

Distribution Planning Exp. not previously allocated$500.06%$7760.06%$430.06%0.0-$30.06%$10.06%0.0-0.0-$470.06%$180.06%$180.06%$460.06%$1530.06%1,1560.06%

Overhead & Other Expenses: Subtotal$3,3274.15%$48,5043.88%$2,6793.83%0.0-781.84%221.78%0.0-0.0-$9,36112.31%$9773.30%$1,9826.73%$4,9186.69%$8,7263.54%$80,5754.33%

Total Expenses$12,98316.21%$181,17214.51%$9,94514.23%0.0-$2926.89%$614.86%0.0-0.0-$11,37714.96%$2,7909.42%$3,49111.86%$8,42211.46%$30,62012.41%$261,15314.05%




# of Tickets (000's)2232,47726801660024692871839104,508

RANK by Contribution Margin$3$1$9$11$7$10$11$11$6$5$4$2$8

(highest to lowest)

2Q01


2nd QTR 2001




ONSHORE FLOWN REVENUE$107,0905.42%$1,267,64864.11%$85,5834.33%$6580.03%$7,6300.39%$3,5040.18%0.00.00%0.00.00%$90,3374.57%$30,3891.54%$34,5051.75%$72,0473.64%$277,90714.05%$1,977,298100.00%


EXPENSES

Base Commissions$2,9452.75%$44,0803.48%$3,2123.75%0.0-0.0-0.0-0.0-0.0-0.0-$3211.06%0.0-0.0-0.0-$50,5572.56%

Upfront Override Commissions$6960.65%$8,2400.65%0.0-$233.50%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$8,9590.45%

Backend Override Commissions$1,8141.69%$21,4691.69%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$23,2831.18%

Commissions: Subtotal$5,4555.09%$73,7895.82%$3,2123.75%$233.50%0.0-0.0-0.0--0.0-3211.06%0.0-0.0-0.0-$82,7994.19%

CRS Fees: Subtotal$1,8491.73%$40,6843.21%$4,0624.75%$294.42%$2403.14%0.0-0.0-0.0-8970.99%0.0-$670.19%$1220.17%$6710.24%$48,6202.46%


Reservations Processing Ctr. (TBM) & ESD$490.05%$4350.03%$560.07%$00.05%$50.07%$30.09%0.0-0.0-$4930.55%0.0-$290.08%$530.07%$6440.23%$1,7680.09%


Res Costs directly allocated to Agencies$4050.38%$3,5900.28%$4630.54%$30.43%$450.59%$260.75%0.0-0.0-0.0-0.0-0.0-0.0-0.0-$4,5310.23%

PNR Modification, Cancels, Recons & Seat Sel$1520.14%$1,3480.11%$1740.20%$10.16%$170.22%$100.28%0.0-0.0-0.0-$490.16%$5451.58%$9921.38%$5,4691.97%$8,7580.44%

RES: Flifo, Baggage, Reward calls, other$9380.88%$8,3250.66%$1,0741.26%$60.99%$1041.37%$611.74%0.0-0.0-$1,0151.12%$3051.00%$3390.98%$6170.86%$3,4031.22%$16,1880.82%

RES Expenses: Subtotal$3,7773.53%$13,6981.08%$1,7682.07%$111.62%$1722.25%$1002.86%0.0-0.0-$1,5091.67%$3541.17%$1,4954.33%$2,9934.15%$20,9567.54%$46,8322.37%

Sales Overhead$5590.52%$6,6230.52%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$7,1820.36%

Revenue Programs Overhead$320.03%$3770.03%$250.03%$00.03%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$4340.02%



CRS Administration Overhead$80.01%$920.01%$60.01%$00.01%0.0-0.0-0.0-0.0-$70.01%0.0-0.0-0.0-0.0-$1130.01%





Variable cost (Transaction fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$1,9662.18%0.0-0.0-0.0-0.0-$1,9660.10%

Fixed cost (License & Monthly Host fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$730.08%0.0-0.0-0.0-0.0-$730.00%

Ticketing Fees: TRX0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$3070.34%0.0-0.0-0.0-0.0-$3070.02%


Bad Debt Expense$1410.13%$1,6710.13%$1130.13%$10.13%$100.13%$50.13%0.0-0.0-$490.05%$170.05%$190.05%$390.05%$1520.05%$2,2150.11%

Credit Card Discount Fees$2,1211.98%$25,1021.98%$2,1112.47%$152.33%0.0-0.0-0.0-0.0-$2,1002.33%$6021.98%$6831.98%$1,4271.98%$6,4622.33%$40,6222.05%

AOL Acquisition Fee$150.01%$1800.01%$120.01%$00.01%$10.01%$00.01%0.0-0.0-$8570.95%$40.01%$50.01%$100.01%$400.01%$1,1250.06%

Other Res&Sales$2870.27%$3,7740.30%$2120.25%$20.24%$160.22%$50.15%0.0-0.0-$520.06%$120.04%$200.06%$270.04%$1060.04%$4,5130.23%

Revenue Accounting Costs$4580.43%2,3320.18%$1180.14%$10.14%$110.14%$50.14%0.0-0.0-$450.05%$1180.39%$340.10%$850.12%$1300.05%$3,3360.17%

Depreciation$50.00%$1700.01%$60.01%$10.20%0.0-0.0-0.0-0.0-0.0-0.0-$1040.30%0.0-0.0-$2850.01%


Advertising and publicity, excl. Advertising Credit$1,0650.99%$12,6060.99%$8510.99%$70.99%$760.99%$350.99%0.0-0.0-$8980.99%$3020.99%$3430.99%$7160.99%$2,7640.99%$19,6620.99%

Advertising Credit$(1,079)-1.01%$(12,772)-1.01%$(862)-1.01%$(7)-1.01%$(77)-1.01%$(35)-1.01%0.0-0.0-$(910)-1.01%$(306)-1.01%$(348)-1.01%$(726)-1.01%$(2,800)-1.01%$(19,923)-1.01%

OnePass Service Center Costs$880.08%$1,0400.08%$700.08%$10.08%$60.08%$30.08%0.0-0.0-$740.08%$250.08%$280.08%$590.08%$2280.08%$1,6220.08%

Distribution Planning Exp. not previously allocated$470.04%$5620.04%$380.04%$00.04%$30.04%$20.04%0.0-0.0-$400.04%$130.04%$150.04%$320.04%$1230.04%8760.04%

Overhead & Other Expenses: Subtotal$3,7473.50%$41,7543.29%$2,7003.15%$213.20%670.88%280.81%0.0-0.0-$6,0176.66%$7872.59%$1,9115.54%$4,8846.78%$7,9342.85%$69,8513.53%

Total Expenses$14,82813.85%$169,92413.40%$11,74113.72%$8412.74%$4786.27%$1293.67%0.0-0.0-$8,4249.32%$1,4624.81%$3,47310.07%$7,99911.10%$29,56110.64%$248,10312.55%




# of Tickets (000's)2932,5993352331900317951061931,0625,054


(highest to lowest)

3Q01


3rd QTR 2001




ONSHORE FLOWN REVENUE$49,8693.05%$1,024,75762.69%$77,8044.76%$13,0010.80%$9,9430.61%$2,8230.17%0.00.00%0.00.00%$84,9045.19%$28,1071.72%$31,8431.95%$63,8153.90%$247,87115.16%$1,634,737100.00%


EXPENSES


Upfront Override Commissions$3520.71%$7,2400.71%0.0-$5123.94%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$8,1040.50%

Backend Override Commissions$7201.44%$14,7971.44%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$15,5170.95%

Commissions: Subtotal$2,4844.98%$57,3225.59%$3,0523.92%$5123.94%0.0-0.0-0.0--0.0-5381.91%0.0-0.0-0.0-$63,9073.91%

CRS Fees: Subtotal$1,3432.69%$34,6883.38%$4,2985.52%$5664.35%$5535.56%0.0-0.0-0.0-7400.87%0.0-$640.20%$1140.18%$6560.26%$43,0232.63%





PNR Modification, Cancels, Recons & Seat Sel$860.17%$1,2620.12%$2030.26%$400.31%$340.34%$110.41%0.0-0.0-0.0-$530.19%$5181.63%$9251.45%$5,3142.14%$8,4460.52%



Sales Overhead$3460.69%$7,1190.69%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$7,4660.46%









Variable cost (Transaction fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-

Fixed cost (License & Monthly Host fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-

Ticketing Fees: TRX0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-


Bad Debt Expense$740.15%$1,5230.15%$1160.15%$190.15%$150.15%$40.15%0.0-0.0-$960.11%$320.11%$360.11%$720.11%$2800.11%$2,2660.14%

Credit Card Discount Fees$9841.97%$20,2131.97%$1,9192.47%$3002.31%0.0-0.0-0.0-0.0-$1,9612.31%$5541.97%$6281.97%$1,2591.97%$5,7242.31%$33,5422.05%


Other Res&Sales$1650.33%$3,5950.35%$2420.31%$360.28%$310.31%$40.16%0.0-0.0-$890.11%$230.08%$390.12%$520.08%$2010.08%$4,4780.27%


Depreciation$60.01%$1820.02%$60.01%$10.01%0.0-0.0-0.0-0.0-0.0-0.0-$1110.35%0.0-0.0-$3060.02%


Advertising and publicity, excl. Advertising Credit$5881.18%$12,0931.18%$9181.18%$1531.18%$1171.18%$331.18%0.0-0.0-$1,0021.18%$3321.18%$3761.18%$7531.18%$2,9251.18%$19,2911.18%

Advertising Credit$(498)-1.00%$(10,225)-1.00%$(776)-1.00%$(130)-1.00%$(99)-1.00%$(28)-1.00%0.0-0.0-$(847)-1.00%$(280)-1.00%$(318)-1.00%$(637)-1.00%$(2,473)-1.00%$(16,311)-1.00%

OnePass Service Center Costs$500.10%$1,0180.10%$770.10%$130.10%$100.10%$30.10%0.0-0.0-$840.10%$280.10%$320.10%$630.10%$2460.10%$1,6240.10%



Total Expenses$8,12216.29%$145,02614.15%$12,23215.72%$1,93114.86%$1,03510.41%$1515.35%0.0-0.0-$6,3427.47%$1,8146.45%$3,57311.22%$7,26411.38%$29,97712.09%$217,46713.30%




# of Tickets (000's)1402,0613316556190029687911639384,248


(highest to lowest)

4Q01


4th QTR 2001




ONSHORE FLOWN REVENUE$42,3503.19%$803,18260.44%$66,6575.02%$23,8401.79%$7,9400.60%$1170.01%0.00.00%0.00.00%$83,8366.31%$17,5411.32%$23,5381.77%$48,8403.68%$211,05215.88%$1,328,895100.00%


EXPENSES


Upfront Override Commissions$2980.70%$5,6600.70%0.0-$1,1925.00%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$7,1500.54%

Backend Override Commissions$3690.87%$7,0040.87%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$7,3730.55%

Commissions: Subtotal$1,9884.70%$36,5294.55%$2,6944.04%$1,1925.00%0.0-0.0-0.0--0.0-4322.46%0.0-0.0-0.0-$42,8353.22%

CRS Fees: Subtotal$8331.97%$27,1003.37%$4,5156.77%$1,1154.68%$6738.48%0.0-0.0-0.0-7590.91%0.0-$550.23%$1090.22%$6460.31%$35,8042.69%



Expenses attributable to RES booking and ticketing$1,0272.42%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$3821.62%$9671.98%$7,8633.73%$10,2380.77%


PNR Modification, Cancels, Recons & Seat Sel$770.18%$9370.12%$2020.30%$700.29%$390.49%$00.24%0.0-0.0-0.0-$420.24%$3721.58%$7331.50%$4,3592.07%$6,8310.51%



Sales Overhead$2990.71%$5,6700.71%0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$5,9680.45%







Total CTO Expenses0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-$2720.32%0.0-$9213.91%$1250.26%$7440.35%$2,0620.16%


Variable cost (Transaction fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-

Fixed cost (License & Monthly Host fee)0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-

Ticketing Fees: TRX0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-0.0-


Bad Debt Expense$(6)-0.01%$(118)-0.01%$(10)-0.01%$(4)-0.01%$(1)-0.01%$(0)-0.01%0.0-0.0-$610.07%$130.07%$170.07%$360.07%$1550.07%$1430.01%

Credit Card Discount Fees$8702.05%$16,5012.05%$1,6442.47%$5752.41%0.0-0.0-0.0-0.0-$2,0222.41%$3602.05%$4842.05%$1,0032.05%$5,0902.41%$28,5492.15%


Other Res&Sales$1150.27%$2,5490.32%$2830.42%$850.36%$380.48%$00.20%0.0-0.0-$770.09%$110.06%$80.03%$310.06%$1320.06%$3,3290.25%


Depreciation$70.02%$2280.03%$70.01%$20.01%0.0-0.0-0.0-0.0-0.0-0.0-$1400.59%0.0-0.0-$3840.03%


Advertising and publicity, excl. Advertising Credit$5771.36%$10,9361.36%$9081.36%$3251.36%$1081.36%$21.36%0.0-0.0-$1,1411.36%$2391.36%$3201.36%$6651.36%$2,8741.36%$18,0941.36%

Advertising Credit$(567)-1.34%$(10,757)-1.34%$(893)-1.34%$(319)-1.34%$(106)-1.34%$(2)-1.34%0.0-0.0-$(1,123)-1.34%$(235)-1.34%$(315)-1.34%$(654)-1.34%$(2,827)-1.34%$(17,798)-1.34%

OnePass Service Center Costs$520.12%$9820.12%$810.12%$290.12%$100.12%$00.12%0.0-0.0-$1020.12%$210.12%$290.12%$600.12%$2580.12%$1,6250.12%



Total Expenses$6,38115.07%$102,54712.77%$11,49117.24%$3,78315.87%$1,15214.51%$43.31%0.0-0.0-$6,1847.38%$1,2457.10%$2,77311.78%$7,01714.37%$24,36911.55%$166,94612.56%




# of Tickets (000's)1321,6113481206600030172701388233,682


(highest to lowest)

ChartInfo2

Chart Data

Total Expense by Channel

RES/AGYAGY/AGYMajor OLAOrbitzPricelineHotwireCo.comOALCTOATORESTOTAL

Fixed Costs2.65%2.41%2.36%2.16%2.44%2.45%0.00%2.72%3.23%3.27%0.00%3.12%2.85%2.94%1.93%1.76%3.23%3.49%5.73%6.46%3.64%3.84%2.73%2.66%2.36%

Variable Costs12.89%12.74%12.41%11.62%10.53%12.69%0.00%12.74%3.44%6.67%0.00%1.35%9.61%6.71%5.32%5.16%7.05%7.67%5.14%5.43%7.09%7.80%10.97%10.49%9.07%

15.54%15.14%14.77%13.78%12.97%15.14%0.00%15.46%6.67%9.94%0.00%4.47%12.46%9.65%7.25%6.92%10.28%11.16%10.87%11.89%10.73%11.64%13.70%13.14%11.43%

ChartInfo

Chart Data

Total Expense by Channel

Book RES/Ticket AGYBook AGY/Ticket AGYMajor On-Line AgenciesOrbitzPricelineHotwireeService OnlineOALCTOATORESTOTAL

FY 200015.54%14.77%12.97%-6.67%-12.46%7.25%10.28%10.87%10.73%13.70%

FY 200115.14%13.78%15.14%15.46%9.94%4.47%9.65%6.92%11.16%11.89%11.64%13.14%

2002 Plan0.00%

Booked RES/Ticketed Agency

Base Comm.Override Comm.CRS FeesRES Exp.Other Exp.

FY 20002.87%2.83%2.21%3.42%4.20%

FY 20012.84%2.22%2.18%3.99%3.91%

Booked Agency/Ticketed Agency

Base Comm.Override Comm.CRS FeesRES Exp.Other Exp.

FY 20004.22%2.82%2.77%1.02%3.93%

FY 20013.38%2.19%3.36%1.17%3.68%

Major Online Agencies

Total Comm.CRS FeesRES Exp.Other Exp.

FY 20003.62%3.55%1.88%3.91%

FY 20013.76%5.40%2.49%3.48%

Orbitz

Total Comm.CRS FeesRES Exp.Other Exp.

FY 20000.00.00%0.00%0.00%

FY 20014.61%4.56%2.99%3.31%

Priceline

CRS FeesRES Exp.Other Exp.

FY 20002.40%2.68%1.59%

FY 20015.32%3.37%1.25%

Hotwire

CRS FeesRES Exp.Other Exp.

FY 20000.00%0.00%0.00%

FY 20010.00%3.35%1.12%

eService Online

CRS FeesMicrosoftTRX FeesOther

FY 20000.60%3.35%3.02%5.49%

FY 20010.96%1.52%0.89%6.28%

OAL

Total Comm.RES Exp.Other Exp.

FY 20002.68%1.15%3.42%

FY 20012.57%1.33%3.02%

CTO

RES Exp.CTO Exp.Other Exp.

FY 20003.75%2.85%3.44%

FY 20014.57%3.33%3.03%

ATO

RES Exp.ATO Exp.Other Exp.

FY 20003.74%3.53%3.39%

FY 20014.47%4.36%2.87%

RES

RES Agent Comm.RPC and ESD Exp.RES Book & TicketPNR Modif, cancels etc.Flifo, Reward, etc.Other Exp.

FY 20000.68%0.20%3.10%1.61%1.24%3.59%

FY 20010.78%0.25%3.71%2.10%1.32%3.20%

All Onshore Channels

Total CommissionsCRS FeesRES Exp.OverheadTRX/MicrosoftCCD FeesOther

FY 20005.14%2.16%2.15%0.44%0.20%2.00%1.61%

FY 20014.00%2.62%2.60%0.51%0.12%2.07%1.23%

2002Plan


4th YTD 2002



Book RES/ Ticket AGY%Book AGY/ Ticket AGY%Major On-Line Agencies%ORBITZ%Opaque Agencies%Direct Connect%Co.com%OAL%CTO%ATO%RES%Total%

ONSHORE FLOWN REVENUE$139,7132.00%$4,051,68258.00%$558,8538.00%$139,7132.00%$69,8571.00%$11,1770.16%$535,8007.67%$118,7561.70%$118,7561.70%$224,2403.21%$1,017,11214.56%$6,985,658100.00%


EXPENSES

Base Commissions$1,1910.85%$33,1640.82%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1590.13%0.00.00%0.00.00%0.00.00%$34,5140.49%

Upfront Override Commissions$8690.62%$25,2050.62%0.00.00%$4,9653.55%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$31,0390.44%

Backend Override Commissions$3,9812.85%$101,3302.50%$13,4532.41%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$118,7641.70%

Commissions: Subtotal$6,0414.32%$159,6993.94%$13,4532.41%$4,9653.55%0.00.00%0.00.00%0.00.00%$1590.13%0.00.00%0.00.00%0.00.00%$184,3172.64%V

CRS Fees: Subtotal$3,8522.76%$138,5603.42%$24,8724.45%$4,6173.30%$2,8044.01%$540.48%$4,4790.84%0.0-$3190.27%$5390.24%$3,4730.34%$183,5682.63%V

RES Agent Commissions$1820.13%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1650.14%$2790.12%$6,9950.69%$7,6210.11%V

Reservations Processing Ctr. (TBM) & ESD$710.05%$1,4340.04%$4280.08%$1360.10%$730.10%$40.04%$5,6231.05%0.00.00%$1070.09%$1800.08%$2,5600.25%$10,6160.15%V

Expenses attributable to RES booking and ticketing$3,4302.45%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$2,1841.84%$4,7402.11%$41,8064.11%$52,1600.75%V

Res Costs directly allocated to Agencies$5440.39%$10,9300.27%$3,2610.58%$1,0380.74%$5570.80%$320.28%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$16,3620.23%V

PNR Modification, Cancels, Recons & Seat Sel$2050.15%$4,1260.10%$1,2310.22%$3920.28%$2100.30%$120.11%0.00.00%$2020.17%$2,0871.76%$3,5231.57%$22,7172.23%$34,7050.50%F

RES: Flifo, Baggage, Reward calls, other$1,2790.92%$25,6950.63%$7,6671.37%$2,4411.75%$1,3101.87%$740.67%$6,1611.15%$1,2551.06%$1,1630.98%$1,9640.88%$12,6621.24%$61,6710.88%F

RES Expenses: Subtotal$5,7114.09%$42,1841.04%$12,5872.25%$4,0072.87%$2,1503.08%$1221.09%$11,7852.20%$1,4571.23%$5,7074.81%$10,6864.77%$86,7398.53%$183,1362.62%

Sales Overhead$1,1030.79%$26,9820.67%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$28,0860.40%F

Revenue Programs Overhead$550.04%$1,3420.03%$1540.03%$380.03%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,5890.02%F

Revenue Analysis Overhead0.00.00%0.00.00%0.00.00%0.00.00%$710.10%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$710.00%F

Incremental Distribution Planning Overhead:

CRS Administration Overhead$140.01%$3510.01%$400.01%$100.01%0.00.00%0.00.00%$370.01%0.00.00%0.00.00%0.00.00%0.00.00%$4530.01%F

Website Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,0200.19%0.00.00%0.00.00%0.00.00%0.00.00%$1,0200.01%F

On-Line Agency Administration Overhead0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%F

Total CTO Expenses0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$1,1590.22%0.00.00%$3,9053.29%$4350.19%$2,6050.26%$8,1040.12%V/F

ATO Rent and Payroll dedicated to ticket sales0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%0.00.00%$15,4896.91%0.00.00%$15,4890.22%V/F

Bad Debt Expense$1980.14%$5,7560.14%$7940.14%$1980.14%$990.14%$160.14%$5270.10%$1170.10%$1170.10%$2210.10%$1,0000.10%$9,0430.13%V

Credit Card Discount Fees$2,8152.01%$81,6302.01%$13,7842.47%$3,3122.37%0.00.00%$2652.37%$12,7032.37%$2,3932.01%$2,3932.01%$4,5182.01%$24,1142.37%$147,9262.12%V

AOL Acquisition Fee$270.02%$7880.02%$1090.02%$270.02%$140.02%$20.02%$4,1790.78%$230.02%$230.02%$440.02%$1980.02%$5,4330.08%F

Other Res&Sales$5450.39%$14,2520.35%$1,1540.21%$2470.18%$1320.19%$130.12%1280.02%$70.01%$520.04%$140.01%$590.01%$16,6030.24%F

Revenue Accounting Costs$6990.50%7,7320.19%$9090.16%$2260.16%$1110.16%$450.40%$1790.03%$4340.37%$1480.12%$2510.11%$4580.05%$11,1910.16%V

Depreciation$230.02%$7430.02%$240.00%$60.00%0.00.00%0.00.00%$5000.09%0.00.00%$4550.38%0.00.00%0.00.00%$1,7500.03%F

Expenses allocated across all channels by revenue:

Advertising and publicity, excl. Advertising Credit$1,5041.08%$43,6261.08%$6,0171.08%$1,5041.08%$7521.08%$1201.08%$5,7691.08%$1,2791.08%$1,2791.08%$2,4141.08%$10,9521.08%$75,2171.08%F

Advertising Credit$(1,662)-1.19%$(48,208)-1.19%$(6,649)-1.19%$(1,662)-1.19%$(831)-1.19%$(133)-1.19%$(6,375)-1.19%$(1,413)-1.19%$(1,413)-1.19%$(2,668)-1.19%$(12,102)-1.19%$(83,118)-1.19%F

OnePass Service Center Costs$1020.07%$2,9580.07%$4080.07%$1020.07%$510.07%$80.07%$3910.07%$870.07%$870.07%$1640.07%$7430.07%$5,1010.07%F

Distribution Planning Exp. not previously allocated$660.05%$1,9190.05%$2650.05%$660.05%$330.05%$50.05%$2540.05%$560.05%$560.05%$1060.05%$4820.05%3,3080.05%F

Overhead & Other Expenses: Subtotal$5,4903.93%$139,8713.45%$17,0103.04%$4,0752.92%4320.62%3423.06%$20,4713.82%$2,9832.51%$7,1005.98%$20,9879.36%$28,5072.80%$247,2683.54%

Total Expenses$21,09415.10%$480,31411.85%$67,92112.15%$17,66412.64%$5,3877.71%$5184.63%$36,7346.86%$4,5993.87%$13,12711.05%$32,21214.37%$118,72011.67%$798,28911.43%

Avg. Price per round-trip ticket$367.19$530.00$245.00$192.38$179.28$504.84$292.29$317.97$343.09$383.84$270.00$380.73

Avg. Cost per round-trip ticket$55.44$62.83$29.78$24.32$13.82$23.39$20.04$12.31$37.92$55.14$31.52$43.51

Avg. Contribution Margin per round-trip ticket$311.75$467.17$215.22$168.05$165.45$481.46$272.25$305.66$305.17$328.70$238.48$337.22

# of RT Tickets (000's)3807,6452,281726390221,8333733465843,76718,348


Fixed2.33%1.84%1.86%2.27%2.49%0.92%2.25%1.26%3.19%8.28%3.51%2.36%

Variable12.76%10.01%10.29%10.37%5.22%3.72%4.60%0.00%7.86%6.09%8.16%9.07%

V-F2

2001

Fixed cost per ticket+Variable cost per ticket=Total cost per ticketVariable cost as a % of revenueAvg. Ticket PriceFixed cost per ticket %Variable cost per ticket %

AGENCY CHANNELS:

Book RES/ Ticket AGY$8.44+$43.02=$51.4613.2%$325.002.60%13.24%

Book AGY/ Ticket AGY$10.23+$44.55=$54.7813.7%$325.003.15%13.71%

Major On-Line Agencies$5.98+$35.45=$41.4210.9%$325.001.84%10.91%

Orbitz$5.68+$26.79=$32.478.2%$325.001.75%8.24%

Priceline$6.07+$11.77=$17.833.6%$325.001.87%3.62%

Hotwire$5.75+$2.53=$8.280.8%$325.001.77%0.78%

DIRECT CHANNELS:

Co.com$8.59+$20.24=$28.836.2%$325.002.64%6.23%

OAL$5.44+$16.67=$22.115.1%$325.001.67%5.13%

CTO$11.73+$25.58=$37.317.9%$325.003.61%7.87%

ATO$24.47+$19.53=$44.006.0%$325.007.53%6.01%

RES$10.30+$22.05=$32.356.8%$325.003.17%6.78%

TOTAL ONSHORE$10.14+$36.84=$46.9711.3%$325.003.12%11.33%

Revenue change

Summary of interesting shifts in revenue shares of various channels:

Increasing:FY 2000FY 2001Inc/(Dec) Points

Co.com3.12%4.93%1.81

Major Online Agencies2.80%4.41%1.61

Reservations13.78%14.46%0.69

Orbitz0.00%0.55%0.55

Hotwire0.00%0.11%0.11

CTO1.65%1.75%0.10

Decreasing:FY 2000FY 2001Inc/(Dec) Points

Booked AGY/Ticketed AGY66.52%63.88%(2.64)

Booked RES/Ticketed AGY5.39%4.11%(1.28)

ATO4.25%3.80%(0.45)

Priceline0.79%0.44%(0.35)

Other Airline (OAL)1.71%1.55%(0.15)

Traditional AGY combined71.91%67.99%(3.92)

Total AGY combined75.50%73.50%(2.00)

Total Exp

Total Exp

0.02652690470.1288587959

0.02405950320.1273780828

0.02364143140.124086707

0.02162178330.1161897972

0.02438407260.1053239933

0.0244832360.1269138438

00

0.02720477130.1274062741

0.03225724280.0344197156

0.03271609490.0666953186

00

0.03123574070.0134966988

0.02854870240.0960992678

0.02940641730.0670537929

0.01932671650.0531585183

0.01759430630.0515929131

0.03231576770.0705156665

0.03490860030.076650522

0.05734095320.0513676667

0.0646268810.05429562

0.03643116030.0709139448

0.0384172360.0780201961

0.02730147720.1097277148

0.0265544970.1048620861

0.02360369370.0906716843

2000 Actual 2001 Actual 2002 Proforma

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

F

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

V

Fixed Costs

Variable Costs

15.6%

15.2%

14.8%

13.8%

13.0%

15.1%

15.5%

6.7%

9.9%

4.5%

12.5%

9.7%

7.3%

7.0%

10.3%

11.2%

10.9%

11.9%

10.7%

11.6%

13.7%

13.1%

11.4%

All channels

0.05140972390.0399894436

0.02156034390.0261872756

0.02154882280.0259898718

0.00442922830.0050934594

0.0019893040.0011830283

0.02002377320.0206885471

0.01606799590.0122849574

FY 2000

FY 2001

BookRESTicketAGY

0.02866489360.0283559183

0.02830749070.0222493369

0.02213030850.0218077243

0.03423548670.0399223028

0.04204752120.0391023036

FY 2000

FY 2001

BookAGYTicketAGY

0.04220970190.0338415463

0.02824970180.0218836687

0.02773894880.0335551167

0.01023454670.0117070148

0.03929523930.036824234

FY 2000

FY 2001

OnlineAgencies

0.03620971870.0376176887

0.03554584880.0540057417

0.01880879260.0249329286

0.03914370580.0348407209

FY 2000

FY 2001

Orbitz

00.0460500429

00.0455910509

00.0298887296

00.0330812218

FY 2000

FY 2001

Priceline

0.02396656040.05321125

0.02679364090.0337181135

0.01591675710.01248205

FY 2000

FY 2001

Hotwire

00

00.0334971679

00.0112352716

FY 2000

FY 2001

Co.com

0.00601908520.0096091933

0.03352215480.0151538193

0.03019797110.0088522158

0.05490875890.0628449818

FY 2000

FY 2001

OAL

0.0267941660.0256722073

0.01145123080.0132944597

0.0342398380.0302205524

FY 2000

FY 2001

CTO

0.03751811290.0457220283

0.02854778140.0333470009

0.03443421160.0303124468

FY 2000

FY 2001

ATO

0.03741221040.0446702536

0.03533186630.0435886441

0.03385398720.0287246784

FY 2000

FY 2001

RES

0.00679489510.0078027719

0.00202952720.0025008718

0.03104099760.0370740992

0.01609605940.0210294865

0.01241769830.0132368653

0.0359444730.0319990355

FY 2000

FY 2001

DP - cost per ticket

Distribution Cost per Ticket

For a Typical $325 Ticket

19951999200020012002 Proforma

Credit Card Fees67777

GDS/CRS Fees7.58.257.751010.25

Commissions2922.2516.2512.758.25

Other24.521.51616.2515

19951999200020012002 Plan

Credit Card Fees67777

GDS/CRS Fees13.515.2514.751717.25

Commissions42.537.53129.7529

Other6759474644

DP - cost per ticket

0000

0000

0000

0000

0000

Distribution Cost per TicketFor a Typical $325 Ticket

Credit Card Fees

GDS/CRS Fees

Commissions

Other

DP-2002 channel

2002Proforma Cost of Distribution

For a Typical $325 Ticket

Trad TAReservationsOLTAOrbitz w/ Direct ConnectCo.comOpaque

Credit Card Fees6.437.918.348.038.090.0

GDS/CRS Fees17.800.9610.213.712.607.63

Commissions12.810.07.826.840.00.0

Other12.7324.787.196.9311.017.03

49.7733.6433.5625.5121.7014.67

DP-2002 channel

6.429647309417.798976968212.8112.7312754442

7.90621595540.9576889717024.7764226821

8.336919889210.20761880627.82341955357.1893722042

8.02616746933.71006182256.83666666676.9336076446

8.09020937922.6000490816011.0069048069

07.631121545507.0339533921

2002 Proforma Cost Of DistributionFor a Typical $325 Ticket

Credit Card Fees

GDS/CRS Fees

Commissions

Other

DP-Online revenues

Online revenues

199719981999200020014Q '012002 Proforma200320042005

Continental.com0.10%0.75%1.80%3.12%4.93%6.31%7.67%9.50%13.00%15.50%

Standard OLTA's0.10%0.60%1.60%2.80%4.41%5.02%8.00%9.00%10.00%11.00%

Opaque Agencies0.10%0.79%0.99%2.39%1.00%1.15%1.26%1.37%

DP-Online revenues

000

000

000

000

000

000

000

000

000

000

Online Revenues as a % of Total

Continental.com

Standard OLTA's

Opaque Agencies

Whats the Problem?Increased availability query volumeOffset with partial pollingFalse Positives on availability Lost O&D system efficiencyNegative customer perceptionType 2: False NegativesLost revenue

Solutions to Display Issues?O&D cache-ingTicket-as-BookedBe Thoughtful

Summary: The Internet is both a curse and an opportunity from the product display and interpretation point of view.

Who is Using the Internet, and Should We Be Surprised?So far, leisure usage is dominant on the Internet. Why?Leisure customers more price sensitive?Less tied to Travel Agents? Demographics?We estimate that leisure usage is between 91% and 96% of internet usageBut What kinds of itineraries should work well.

Trips the Internet Was Born to SellSimple out-and-back tripsKnown out and return parametersSimple, unrestricted fare structureDestination well known to customerNo need for personalized informationPackaged with a simple car and hotelWhat we just described is Business Trip!!!

An Aberration?In Southwest Air competitive markets, CO results are different

Why Not More Business Trips?Internet sites only issue eTickets Business travel is typically ManagedTechnology has not yet fixed:Policy controlRefund, Change and ReissueCorporate deals not reflectedThe Back OfficePerceived disruption penalty But stay tuned

The Internets Lower Costs Are Seductive. But Finitely So

Chart1

0.1901711887

0.1784847051

0.1563232207

0.1038801133

0.0848264463

0.0719283607

0.0642803235

0.0203708087

Distribution Cost For A "Typical" $325 Ticket

Sheet1

Cost of Distribution for a Typical $325 Ticket

1998 Trad Agy19.0%

2000 Trad Agy17.8%

2002 Trad Agy15.6%

2002 OLTA10.4%

2002 Orbitz8.5%

2002 Priceline7.2%

2002 CO.com6.4%

2002 Hotwire2.0%

1998 Trad2000 Trad2002 Trad2002 OLTA2002 Orbitz2002 CO.com2002 Opaque2002 Priceline2002 Hotwire

Variable Expenses

Commissions Ttl$31.04$22.91$13.00$7.80$6.84

GDS Fees$12.04$13.81$17.75$10.90$6.36$2.44$7.19$16.76

Res Fees - TBM$0.03$0.16

Res Fees - Booking & Tktg0.0

Credit Card Fees$6.27$6.31$6.50$8.13$7.80$7.80

Fixed Expenses Allocated Based on Flown Tickets

Other Res than Above$4.23$4.93$5.97$5.52$5.52$6.42$5.51$5.51$5.51

Other Overhead$8.20$9.88$7.59$1.41$1.05$4.23$1.11$1.11$1.11

Sheet2

Sheet3

We Must Learn to Manage For Revenue-Less-Distribution-CostA higher fare through a more expensive channel may result in less net revenue than a lower one through the InternetBut, then again, it may notThe mechanisms are uncertain ..

The Internet Helps Control Dilution, But How Much?Displacement: Making sure that a seat is not sold to a customer now, if a customer who will be willing to pay more is likely to come along laterRM is GOOD at controlling Displacement Dilution: Making sure that a seat is not sold now to a customer who would be willing to pay moreRM is no GOOD at controlling Dilution, but the Internet can help by SEGMENTATION

The Internet Can Only Help If It Aids Segmentation Effectively Internet users are not demographically unique, but different sites can appeal to segments Site TypeCustomer SegmentOpaque SitesPrice-only On Line Trvl AgentsShoppersSpecialty packagersDreamersWholesalersPackaged VacationersAirline SitesLoyalists..

Example: Price-Only Market the Basic Websites Segment Well

Integrated Displays May Blur Segmentation And They Create A Reference Price trap

Display 1

If customer

chooses to

view

opaque

fare, they

would click

the

indicated

button.

This would

trigger a

response

shown on

Page 2.

No where

on this

page will

the opaque

fare be

displayed

Money Saving Alternatives from Web Site

Savings

indicator must

not tie to fare

offered on

Page 2

If customer

chooses to

view

opaque

fare, they

would click

the

indicated

button.

This would

trigger a

response

shown on

Page 2.

No where

on this

page will

the opaque

fare be

displayed

Savings indicator

indicator does not

tie to specific fare

offered on

Display 2

Web Site's best fare finder results

Web Site Money Saving Alternatives

Web Site Air

To Promote Segmentation, CO has only participated if:

Display 1

If customer

chooses to

view

opaque

fare, they

would click

the

indicated

button.

This would

trigger a

response

shown on

Page 2.

No where

on this

page will

the opaque

fare be

displayed

Money Saving Alternatives from Web Site

Savings

indicator must

not tie to fare

offered on

Page 2

If customer

chooses to

view

opaque

fare, they

would click

the

indicated

button.

This would

trigger a

response

shown on

Page 2.

No where

on this

page will

the opaque

fare be

displayed

Savings indicator

indicator does not

tie to specific fare

offered on

Display 2

Web Site's best fare finder results

Web Site Money Saving Alternatives

Web Site Air

Jumps To:

HIGHLY RESTRICTED, BUT OUR VERY BEST FARE

The response page

would be displayed in

the order shown here

where the price bar

would be placed below

the rules and

restrictions

Display 2

HIGHLY RESTRICTED, BUT OUR VERY BEST FARE

The response page

should be displayed in

the order shown here

where the price bar

would be placed below

the rules and

restrictions

Web Site.

May Be Confusing?

The Internet is IndividualizableEffective CRM could eventually help airlines define individualized products at individualized prices based on individualized elasticity calculations

At CO, We Believe That RM Has These Internet Obligations To solve the O&D delivery problemTo educate on Displacement and Dilution, and support products that segment well To stay involved in product designTo reorient itself to think about distribution costsTo monitor and think deeply about the next stages of this powerful and dangerous thing

What shall we talk about?Questions?

Courses that RM Departments Should Teach.Dilution vs. DisplacementThe Role of Market SegmentationReference Pricing and its ImplicationsDetailed Cost Structure and its Impact on Revenue ControlChannel Shift and its Effect on Profit

But that Leads You to Wonder:What is the Top 10 List of Least Popular Revenue Management Courses?

Top 10: Least Favorite RM CoursesOverbooking: the Gate Agents Best Friend 9. Optimization 101: the Art of the Pretty Good Guess 8. Peter Belobaba: The Toddler Years 7. What Happens After EMSRz? 6. Name Change: The History of RM Vendors

Top 10: Least Favorite RM Courses 5. The Revenue Management Topless Hunk Calendar 4. The Filming of the Revenue Management Topless Hunk Calendar 3. Great RM Heroes from the Sales Department 2. Famous Oversale Riots 1. The Comic Genius of Bill Brunger

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