Sabre Airline Solutions Advises AACO and Six Arab Carriers on the Creation of a Pan-Arab Airlines Alliance, ``Arabesk''; Consulting Group Guides Distinctive Opportunity for Competing Middle Eastern Carriers to Better Leverage Network Synergies.

SOUTHLAKE, Texas -- Sabre Airline Solutions and the Arab Air Carriers Organization (AACO), in close coordination with six Arab airlines, are studying the creation of a new ground-breaking alliance.

Egypt Air, Gulf Air, Middle East Airlines, Oman Air, Royal Jordanian Airlines and Saudi Arabian Airlines are participating in the study to create "Arabesk," the first airline alliance that coordinates the schedules of six close competitors. The goal of creating this pan-Arab alliance is to provide financial benefits that the carriers could not achieve individually.

According to Nejib Ben-Khedher, senior vice president of the consulting group at Sabre Airline Solutions, "There has always been a collective wisdom that close competitors in a region cannot cooperate effectively because they compete for the same passengers. Arabesk challenges this perception by ensuring that the cooperation occurs on schedules, while allowing free and open competition on pricing between the members for the pool of passengers. We expect this to actively stimulate the growth of traffic in the region and improve the market share of each of the members."

These benefits are being achieved by providing better separation of services, reducing the duplication of capacity, linking networks and destinations, generating market demand through improved customer connectivity and maximizing capacity through route sharing and rationalization. The combined network of the six carriers totals over 5,000 departures each week reaching from North America to the Far East, giving vast potential to the alliance.

"AACO is very pleased to work with Sabre Airline Solutions in establishing this model that improves the linkages between the networks of six of our key members," said Abdul Wahab Teffaha, Secretary General of the AACO. "Arabesk is an innovative initiative which will strengthen the competitiveness of our members as a whole and provide better connectivity for travelers throughout the world and within the region. While many of the airlines involved in this alliance were competing with each other, larger, more powerful airlines and alliances were being established and set to grow.

"With the creation of Arabesk, these airlines intend to cooperate and compete directly with larger carriers/alliances with a combined network, while still competing with each other for passengers based on a competitive pricing policy. Passengers will therefore be attracted to Arabesk because of its network coverage and the competitive prices. This is a truly smart solution to a real problem that has eluded resolution by the industry," Teffaha further noted.

Arabesk is being created on a strong analysis base. Sabre Airline Solutions is using its AirFlite suite of advanced network analysis tools, including Schedule Manager, Profit Manager and Fleet Manager in order to optimize the schedules of the six participating carriers. In addition, Sabre Airline Solutions is using its unique data sources, including its Global Demand Dataset ("GDD") to ensure that the forecasted benefits are achieved.

"Our tools are being used in an innovative manner to create one 'virtual schedule' that combines the networks of the participating carriers. By optimizing this schedule, the most profitable network for all of the carriers can be determined," says Ben-Khedher.

"AACO is dedicated to bring benefits to its members," Teffaha continued. "In the past, these benefits have focused on cost reductions and creating supplementary revenues. With the creation of Arabesk, AACO is helping its members to grow market share and stimulate revenues. We trust that this will benefit the participating carriers and their passengers."

"This is also a great opportunity to leverage our relationship with AACO to create increased synergies within the region, added Ben-Khedher. "Unlike global alliances where major players drive the strategy, Arabesk will treat each participating carrier as equal and the whole as if it were one 'virtual airline.' The common brand has the ability to improve the profitability of each member by increasing revenues while reducing costs. AACO is key to the success of Arabesk, because this industry body will help resolve disagreements while ensuring that all participants have an equal voice in the alliance".

"Arabesk is ultimately about successful growth and profitability for our members," said Teffaha. "Therefore, we welcome additional participants who add value to the alliance. With the help of Sabre Airline Solutions, we are hoping to forge something truly unique and ground-breaking for the industry."

The establishment of the Middle Eastern virtual alliance further expands Sabre Airline Solutions' presence in the region following recent contract announcements with Gulf Air, Egypt Air and Oman Air.

About Sabre Airline Solutions

Sabre Airline Solutions, a Sabre Holdings company, is the world's largest provider of software products; reservations, departure control systems and other passenger management systems; and consulting services that help airlines simplify operations and lower costs. Sabre Airline Solutions' proven leadership is demonstrated by the growing number of airlines that leverage the technology and services: More than 200 airlines worldwide use Sabre Airline Solutions' broad portfolio of smart solutions for decision-support tools to increase revenues and improve operations. More than 500 contracts worldwide were signed in 2004 for Sabre Airline Solutions' leading technology solutions. More than 100 airlines worldwide rely on Sabre Airline Solutions for passenger management solutions, with eight new carriers choosing SabreSonic, the first new generation reservations system offered in the market, in 2004 and six carrier renewals. In addition, more than 100 clients worldwide have turned to the Sabre Airline Solutions consulting group for strategic, commercial and operational consulting.

Sabre Holdings Corporation (NYSE:TSG) is a world leader in travel commerce, retailing travel products and providing distribution and technology solutions for the travel industry. More information about Sabre Holdings is available at http://www.sabre-holdings.com.

About Arab Air Carriers Organization

The Arab Air Carriers Organization (AACO) is an important association in the growth regions of the Middle East and North Africa. Alongside traditional activities, it is helping member airlines to achieve considerable savings in their daily operations through joint projects. AACO's mission is to Promote Cooperation amongst Arab Airlines and to Serve their Common Interests through Service Excellence.

As the association of airlines based in Arab League member states, AACO represents 23 airlines in the Middle East and North Africa regions. The Beirut-based organization, established in 1965, aims to promote the highest safety standards, to provide a framework for a better economic environment for airline operations, to promote high standards of consumer driven services, to provide high quality and cost effective framework for human resources development, to invest in the synergy of interaction between members through establishment of joint projects

AACO has developed a strategy based on five pillars: cost reduction, strengthening marketing, network strategy, aviation regulations and services

More information about the Arab Air Carriers Organization is available at http://www.aaco.org.

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