1. Shay Mitchell General Manager Galileo Netherlands The Growth of Low-Cost Carriers MARKET CHAOS – WHERE DO WE GO FROM HERE? 23 rd September 2003

2. Chaos Economic recession War SARS

3. Travel Market Changing Low Cost carriers Airline disintermediation Airline Direct Connect Commoditised GDS Profit margins shrinking Online vs. offline

4. Growth of Low Cost Carrier Concept Ever growing list of Low-Cost Carriers in Europe Full-service airlines adopting the LC model All carriers trying to sell more and more directly to the consumer Direct connect considered to be more cost effective, (true or false?)

5. Impact on the Travel Agent –Dramatic! Commission reductions (7% -5%-1%- Zero?) Service fees as a replacement revenue stream How many travel agents will survive? Those who do must embrace technology in order to be more productive Using Customer Relationship Management Finding niche markets

6. Impact on the GDS –Dramatic! Shrinking market due to channel shift New role of travel solution provider Forcing a change in the GDS/Travel Agent/Airline relationship Reducing revenues and lower margins FA arrangements not sustainable in the future

7. GDS Market Shrinking Holland down 18% UK down 12% Germany down 10% Italy up 6% Spain up 17% Source: MIDT data

8. Where does the consumer stand and what are his/her needs in a so called Book Direct Market? Widest choice possible Price guarantee Ease of booking Dynamic packaging Servicing and sales support Can this be provided through a single supplier website?

9. Content – What we provide 35m fares Private Fares now 50%+ 6220 formulae 47.000 travel agency locations 493 Airlines 52.000 hotel properties 292m bookings LY

10. Technology – Direct Connects Multi carrier itineraries & pricing Ground services Integrate bookings Mid & back office hand off Itinerary changes Partner access to bookings Paper ticketing BSP credits for E-tickets BSP hand off functions Private fares Married segments Corporate policy management New preferred airline supplier W H O P A Y S ?

11. Technology – Supplier Direct Connect Unsustainable burden on Web and airline reservation systems Loss of integration Limits consumer choice Economic model is flawed – Hidden costs of going direct Ask the expert - GDS

12. Areas of Focus Content Technology- (Increasing Productivity) New Business Model

13. Content, Content, Content!

14. Low Cost Carriers In Galileo Virgin Express Virgin Blue – Australia Westjet in Canada BMIBaby Kulula -South Africa SkyEurope - Bratislava FreshAer -Ireland Air Majic - UK

15. Galileo –Airline Supplier Initiatives Airline Content Retention in Galileo through; Basic Booking Product – Europe Preferred Rates Programme in USA (Full service airlines –web content) One-to-one discussions and agreements with Airline suppliers in EMEA focusing on web fare distribution at lower cost

16. Content – Low Cost, No Frills Basic Booking Product Low cost GDS booking product Custom Fares Integrated web fares Super PNR?

17. Cendant Divisional Overview HospitalityTravel Distribution Real Estate Financial Services Vehicle Services Travel Divisional Overview

18. Cendants Travel Assets for EMEA/AP Vacation Rental Hotels DistributionCar Rental 38000 Properties 17 EU Countries 4m Consumers 600000 Rooms 6000 Properties 180m Room Nights US, UK, Ireland #1 AP #1 MEA #2 Europe Corporate Tools Preferred Content #1 world-wide Owned in AP Owned in N.America Licence in EMEA

19. Technology -Solutions Is about efficiency and cost reduction Fare Shopper E-Tracker Agency Private Fares Airline Private Fares Custom Fares Corporate Booking Tools Galileo Web Services

20. GDS – New Business Model Maximise the airline content - Full service & Low Cost Carriers Add wide range of new content Deliver new technical solutions to create efficiencies Greater value rather than FA?

21. Alternatives to FA Improved Corporate/Leisure Booking Tools Internal automation for cost take-out TDS not GDS Stronger partnership agreements with customers and suppliers

22. The Galileo Challenge As part of the Cendant Travel Distribution Services Group, Galileo is re-inventing itself, in order to forge clearly defined new partnerships with its travel agency partners and suppliers for a prosperous future. Come Join US