Sabre Airline Solutions and the Arab Air Carriers Organisation (AACO), in close co-ordination with six Arab airlines, are studying the creation of a new ground-breaking alliance. Egypt Air, Gulf Air, Middle East Airlines, Oman Air, Royal Jordanian Airlines and Saudi Arabian Airlines are participating in the study to create ‘Arabesk’, the first airline alliance that co-ordinates the schedules of six close competitors. The goal of creating this pan-Arab alliance is to provide financial benefits that the carriers could not achieve individually.
According to Nejib Ben-Khedher, senior vice president of the consulting group at Sabre Airline Solutions, “There has always been a collective wisdom that close competitors in a region cannot co-operate effectively because they compete for the same passengers. Arabesk challenges this perception by ensuring that the co-operation occurs on schedules, while allowing free and open competition on pricing between the members for the pool of passengers. We expect this to actively stimulate the growth of traffic in the region and improve the market share of each of the members.”
These benefits are being achieved by providing better separation of services, reducing the duplication of capacity, linking networks and destinations, generating market demand through improved customer connectivity and maximising capacity through route sharing and rationalisation. The combined network of the six carriers totals over 5,000 departures each week reaching from North America to the Far East, giving vast potential to the alliance.
“AACO is very pleased to work with Sabre Airline Solutions in establishing this model that improves the linkages between the networks of six of our key members,” said Abdul Wahab Teffaha, Secretary General of the AACO.
“Arabesk is an innovative initiative which will strengthen the competitiveness of our members as a whole and provide better connectivity for travellers throughout the world and within the region. While many of the airlines involved in this alliance were competing with each other, larger, more powerful airlines and alliances were being established and set to grow.
“With the creation of Arabesk, these airlines intend to co-operate and compete directly with larger carriers/alliances with a combined network, while still competing with each other for passengers based on a competitive pricing policy. Passengers will therefore be attracted to Arabesk because of its network coverage and the competitive prices. This is a truly smart solution to a real problem that has eluded resolution by the industry,” Teffaha further noted.
Arabesk is being created on a strong analysis base. Sabre Airline Solutions is using its AirFlite suite of advanced network analysis tools, including Schedule Manager, Profit Manager and Fleet Manager in order to optimise the schedules of the six participating carriers. In addition, Sabre Airline Solutions is using its unique data sources, including its Global Demand Dataset (‘GDD’) to ensure that the forecasted benefits are achieved.
“Our tools are being used in an innovative manner to create one ‘virtual schedule’ that combines the networks of the participating carriers. By optimising this schedule, the most profitable network for all of the carriers can be determined,” says Ben-Khedher.
“AACO is dedicated to bringing benefits to its members,” Teffaha continued.
“In the past, these benefits have focused on cost reductions and creating supplementary revenues. With the creation of Arabesk, AACO is helping its members to grow market share and stimulate revenues. We trust that this will benefit the participating carriers and their passengers.”
“This is also a great opportunity to leverage our relationship with AACO to create increased synergies within the region”, added Ben-Khedher. “Unlike global alliances where major players drive the strategy, Arabesk will treat each participating carrier as equal and the whole as if it were one ‘virtual airline’.
The common brand has the ability to improve the profitability of each member by increasing revenues while reducing costs. AACO is key to the success of Arabesk, because this industry body will help resolve disagreements while ensuring that all participants have an equal voice in the alliance”.
“Arabesk is ultimately about successful growth and profitability for our members,” said Teffaha.
“Therefore, we welcome additional participants who add value to the alliance. With the help of Sabre Airline Solutions, we are hoping to forge something truly unique and ground-breaking for the industry.”
The establishment of the Middle Eastern virtual alliance further expands Sabre Airline Solutions’ presence in the region following recent contract announcements with Gulf Air, Egypt Air and Oman Air.