Introduction to Airline Information System

1. Introducing Airline Information System By Siddhartha Tripathi Wednesday, May 27, 2009

2. Agenda <ul><li>Evolution of Airline Industry </li></ul><ul><li>Classifying Airlines and Introducing IATA </li></ul><ul><li>Airline Industry Value Chain </li></ul><ul><li>Introducing Airline system Components </li></ul><ul><li>Challenges facing Airline Industry </li></ul><ul><li>IT trends in Airline Industry </li></ul><ul><li>Developing IT Roadmap for Airline </li></ul><ul><li>Most Urgent IT Improvements IDC Recommendations </li></ul><ul><li>Using IT to Improve Operations:- Visiting few Airline Operations </li></ul><ul><li>IT Enabled Airline Success Story </li></ul><ul><li>Before we say “Thank You” </li></ul>

3. Evolution of Airline Industry <ul><li>We have evolved from this … </li></ul>Contd..

4. And this Contd..

5. To this Contd..

6. And Some Stats to think !! <ul><li>28% of all online purchases are travel related </li></ul><ul><li>Travel & Tourism market: </li></ul><ul><ul><li>1999: $2.1 trillion </li></ul></ul><ul><ul><li>2010: $3.9 trillion </li></ul></ul><ul><ul><ul><li>( Source : Satellite Accounting Research) </li></ul></ul></ul><ul><li>Online Travel Booking </li></ul><ul><ul><li>1999: $6 billion </li></ul></ul><ul><ul><li>2002: $30 billion </li></ul></ul><ul><ul><ul><li>( Source: PhoCusWright) </li></ul></ul></ul>Contd..

7. US majors – internet sales And Some More Stats to think !! 20% American Airlines 22% United Airlines 22% Northwest Airlines 22% Continental Airlines 24% Delta Air Lines 24% US Airways 33% America West Airlines 36% Alaska Airlines % Flown Booked Online Carrier

8. Types of Airlines( US Classification) <ul><li>Acc. To US Federal Government Airlines categorized into </li></ul><ul><ul><li>Major </li></ul></ul><ul><ul><ul><li>A major airline is defined as an airline that generates more than $1-billion in revenue annually. </li></ul></ul></ul><ul><ul><ul><li>There were 12 major airlines as of 2000 </li></ul></ul></ul><ul><ul><li>National </li></ul></ul><ul><ul><ul><li>Scheduled airlines with annual operating revenues between $100-million and $1-billion. </li></ul></ul></ul><ul><ul><ul><li>Examples of national airlines include Aloha, Atlas Air, Airtran, Emery Worldwide, Evergreen, Hawaiian and Midwest Express. </li></ul></ul></ul><ul><ul><li>Regional </li></ul></ul><ul><ul><ul><li>Airlines service particular regions of the United States, filling the niche markets that the major and national airlines may overlook </li></ul></ul></ul><ul><ul><ul><ul><li>Large regional - These are scheduled carriers with $20-million to $100-million in annual revenue. They operate aircraft that can accommodate more than 60 passengers. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Medium regional - These airlines operate on a smaller scale, with operating revenues of under $20-million, and often use only small aircraft. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Small regional - These airlines don't have a set revenue definition, but are usually referred to as "commuter airlines." They use small aircraft with less than 61 seats. </li></ul></ul></ul></ul>Contd..

9. Prominent Organizations In Airline Industry <ul><li>IATA </li></ul><ul><ul><li>International Air Traffic Association between 1919 and WWII </li></ul></ul><ul><ul><li>International Air Transport Association since 1945 </li></ul></ul><ul><ul><ul><li>IATA* has two functions </li></ul></ul></ul><ul><ul><ul><ul><li>Trade Association (technical, legal, financial, traffic services and most agency matters); </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Tariff Coordination (passenger fares and cargo rates, agents' commissions). </li></ul></ul></ul></ul>*IATA only controls International flights

10. Introducing SITA, OAG and ATPCO. <ul><li>SITA </li></ul><ul><ul><li>Societe Internationale des communications aeronautiques (SITA) handles shared communication means, including network and devices </li></ul></ul><ul><li>OAG </li></ul><ul><ul><li>Official Airline Guide </li></ul></ul><ul><ul><li>Published by the homonymous company </li></ul></ul><ul><ul><li>contains the airline schedule information, so for every flight essentially: </li></ul></ul><ul><ul><ul><li>The departure and destination airports, </li></ul></ul></ul><ul><ul><ul><li>The departure and arrival times, </li></ul></ul></ul><ul><ul><ul><li>The flight number. </li></ul></ul></ul><ul><ul><li>OAG maintains an airline schedules database, which holds flight details for 1000 airlines and more than 3000 airports and is updated around ten times a second. </li></ul></ul><ul><li>ATPCO </li></ul><ul><ul><li>Airline Tariff Publishing Company ( ATPCO ) is a fare distributing company </li></ul></ul>

11. Introducing GDS <ul><li>GDS:- Global Distribution System, 4 Major GDS </li></ul><ul><li>System architectures are largely based on a mainframe TPF (Transaction Processing Facility) </li></ul><ul><ul><li>Sabre </li></ul></ul><ul><ul><ul><li>Created by </li></ul></ul></ul><ul><ul><ul><ul><li>American Airlines </li></ul></ul></ul></ul><ul><ul><li>Amadeus </li></ul></ul><ul><ul><ul><li>Created by </li></ul></ul></ul><ul><ul><ul><ul><li>Air France </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Iberia </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Lufthansa </li></ul></ul></ul></ul><ul><ul><ul><ul><li>SAS </li></ul></ul></ul></ul><ul><ul><li>Galileo </li></ul></ul><ul><ul><ul><li>Created by </li></ul></ul></ul><ul><ul><ul><ul><li>Aer Lingus </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Air Canada </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Alitalia </li></ul></ul></ul></ul><ul><ul><ul><ul><li>British Airways </li></ul></ul></ul></ul><ul><ul><ul><ul><li>KLM </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Swissair </li></ul></ul></ul></ul><ul><ul><ul><ul><li>TAP </li></ul></ul></ul></ul><ul><ul><ul><ul><li>US Airways </li></ul></ul></ul></ul><ul><ul><li>WORLDSPAN </li></ul></ul><ul><ul><ul><li>Created by </li></ul></ul></ul><ul><ul><ul><ul><li>Delta </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Northwest </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Trans World Airlines </li></ul></ul></ul></ul>

12. Airline Industry Value Chain INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTICS MARKETING AND SALES SERVICE PROCUREMENT TECHNOLOGY DEVELOPMENT HUMAN RESOURCE MANAGEMENT FIRM INFRASTRUCTURE from C ompetitive Advantage: Creating and Sustaining Superior Performance , copyright 1985 by Michael E. Porter. -Financial Policy - Accounting - Regulatory Compliance - Legal - Community Affairs Pilot Training Safety Training Agent Training In-flight Training Baggage Tracking System <ul><li>Promotion </li></ul><ul><li>Advertising </li></ul><ul><li>Advantage </li></ul><ul><li>Program </li></ul><ul><li>Travel Agent </li></ul><ul><li>Programs </li></ul><ul><li>Group Sales </li></ul><ul><li>Ticket Counter </li></ul><ul><li>Operations </li></ul><ul><li>Gate Operations </li></ul><ul><li>Aircraft </li></ul><ul><li>Operations </li></ul><ul><li>On-board Service </li></ul><ul><li>Baggage Handling </li></ul><ul><li>Ticket Offices </li></ul><ul><li>Route Selection </li></ul><ul><li>Passenger Service </li></ul><ul><li>System </li></ul><ul><li>Yield Management </li></ul><ul><li>System (Pricing) </li></ul><ul><li>Fuel </li></ul><ul><li>Flight Scheduling </li></ul><ul><li>Crew Scheduling </li></ul><ul><li>Facilities Planning </li></ul><ul><li>Aircraft Acquisition </li></ul>Information Technology Communications Product Development Market Research <ul><li>Lost Baggage Service </li></ul><ul><li>Complaint Follow-up </li></ul><ul><li>Baggage System </li></ul><ul><li>Flight </li></ul><ul><li>Connections </li></ul><ul><li>Rental Car and </li></ul><ul><li>Hotel Reservation </li></ul><ul><li>System </li></ul>Computer Reservation System, In-flight System Flight Scheduling System, Yield Management System Baggage Handling Training Flight, route and yield analyst training We Need Process and Efficient System, To derive value from Value Chain

13. Airline system Components Pricing And Revenue Management System Maintenance And Engineering System Flight Operation System Finance System Crew Management System Central Reservation System Airport Management System Air Cargo System Business Processing System Sales and Marketing System HR Management System CRM System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity

14. Airline system Components Central Reservation System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to book ticket on airline. Should at least provide for </li></ul><ul><li>Internet booking:- Internet Booking System enables passengers, travel agents and corporate customers to search for flights and fares, and book airline seats on the internet. </li></ul><ul><li>E Ticketing:-e-Ticketing replaces a conventional paper ticket with an electronic ticket. All booking and ticket details are stored in the airline’s computer system. Passenger is issued e-ticket receipt for security and immigration purposes. </li></ul><ul><li>Booking through ATM and Kiosk </li></ul><ul><li>Integration with Major Global Distribution’s </li></ul><ul><li>Integration with call center for telephonic booking </li></ul>

15. Airline system Components CRM System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>Remember 80/20 rule. 20% customer give 80% revenue. </li></ul><ul><li>The CRM system should provide </li></ul><ul><li>Prediction into customer buying behavior </li></ul><ul><li>Identify frequently flying and high profile flyers </li></ul><ul><li>Integrate to DW/BI system </li></ul><ul><li>Forecast demand </li></ul><ul><li>Identify customers for marketing campaign based on customer profile and past data </li></ul><ul><li>Provide for customer feedback through various touch points ( SMS, PDA, Survey):- Involve Customer </li></ul><ul><li>The crux is to identify behavior of customer/ prospect for better retention and service </li></ul>

16. Airline system Components Pricing And Revenue Management System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>The use of Real-Time Dynamic Pricing Engine positions airlines </li></ul><ul><li>to </li></ul><ul><li>Adapt inventory controls to the very dynamic market conditions including influx of low-fare competition, alternate pricing models, and distribution channel differences. </li></ul><ul><li>It allows integrated controls for selling over e-commerce channels along with traditional distribution channels and provides the infrastructure for customer-centric revenue optimization </li></ul><ul><li>Revenue Management System Revenue Management System (RMS) enhances airline revenues by optimizing traffic and yield mix with the help of past data, current trends, and demand forecast for different flights, segments and fares. </li></ul>

17. Airline system Components Finance System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to provide the easy/configurable view of how airline is performing. The system should at the minimum provide for </li></ul><ul><ul><li>Automating extracting data from revenue accounting and other sources </li></ul></ul><ul><ul><li>Allow upload of manual data such as budget and target </li></ul></ul><ul><ul><li>Should integrate with Forecasting and Procurement system </li></ul></ul><ul><ul><li>Provide KPI as </li></ul></ul><ul><ul><ul><li>Load factor </li></ul></ul></ul><ul><ul><ul><li>By period , sector, route, origin and destination </li></ul></ul></ul><ul><ul><ul><li>By market-By point of sale/agent wise, product </li></ul></ul></ul><ul><ul><li>Allow user to create reports on demand </li></ul></ul><ul><ul><li>Should integrate with DW, Audit controls </li></ul></ul>

18. Airline system Components Sales and Marketing System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to Manage sales and marketing. The system should at the minimum provide for </li></ul><ul><ul><li>Managing sales record and integration with Financial and revenue system </li></ul></ul><ul><ul><li>Alerts based on defined competitors events </li></ul></ul><ul><ul><li>Daily KPI monitoring </li></ul></ul><ul><ul><li>Campaign management </li></ul></ul><ul><ul><li>Target and actual achieved reporting by </li></ul></ul><ul><ul><ul><li>Reason </li></ul></ul></ul><ul><ul><ul><li>Route, flight, slot and carrier type </li></ul></ul></ul><ul><ul><ul><li>Configurable parameter </li></ul></ul></ul><ul><ul><li>Alerts integrated with CRM system </li></ul></ul>

19. Airline system Components Business Processing System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>The use of System to define new business scenario and processes including </li></ul><ul><li>New fares in response to campaign . </li></ul><ul><li>Security and baggage handling process </li></ul><ul><li>Baggage tracking </li></ul><ul><li>Procurement policy </li></ul><ul><ul><li>IT </li></ul></ul><ul><ul><li>Material </li></ul></ul><ul><li>Easy to use reporting and data analysis </li></ul><ul><li>Defining new distribution channel </li></ul><ul><li>Check In process </li></ul><ul><li>Catering and dining forecasting process </li></ul><ul><li>The Crux is to use system to define process and track and improve the business process </li></ul>

20. Airline system Components Maintenance And Engineering System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to Cover aircraft maintenance and engineering operation </li></ul><ul><li>To ensures real-time, total control of the maintenance environment </li></ul><ul><li>To optimizes daily operations and complement managerial decisions, resulting in significant cost savings and improvement in overall performance. </li></ul><ul><li>Should integrate with with flight operation systems and different finance and human resource management applications. </li></ul>

21. Airline system Components HR Management System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to manage Most Important Resource ( Employee) </li></ul><ul><li>Managing employee lifecycle in organization including </li></ul><ul><ul><li>Recruitment requisition, Interview and reference check </li></ul></ul><ul><ul><li>Employee Induction and training </li></ul></ul><ul><ul><li>Leave Management </li></ul></ul><ul><ul><li>Performance Management </li></ul></ul><ul><ul><li>Security Checks </li></ul></ul><ul><ul><li>Retention and Motivation scheme </li></ul></ul><ul><ul><li>Productivity Improvement </li></ul></ul>

22. Airline system Components Flight Operation System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to manage Flight daily operations from a compact interface and report operational results </li></ul><ul><li>Movement Management </li></ul><ul><li>Graph of Schedule with status </li></ul><ul><li>Aircraft Availability </li></ul><ul><li>Produce Delay Report </li></ul><ul><li>Handle Incoming SITA, GDS message </li></ul><ul><li>Update Schedule </li></ul>

23. Airline system Components Air Cargo System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to provide Tracking and Managing Cargo. The system should at the minimum provide for </li></ul><ul><ul><li>Use of RFID tags to determine cargo location in Bay area </li></ul></ul><ul><ul><li>Tracking Cargo till it reaches it’s end destination </li></ul></ul><ul><ul><li>Suggesting bay area for cargo depending on other cargo in line </li></ul></ul><ul><ul><li>Pricing based on weight/ Location and type </li></ul></ul><ul><ul><li>Reporting capability and integration with procurement system </li></ul></ul>

24. Airline system Components Crew Management System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to schedule crew staff. The system should at the minimum provide for </li></ul><ul><ul><li>Scheduling of cabin crew </li></ul></ul><ul><ul><li>Compliance to labor laws </li></ul></ul><ul><ul><li>Crew teaming alert ( to alert if 2 people on same flight/ team has tendency to fight) </li></ul></ul><ul><ul><li>Crew hour logging </li></ul></ul><ul><li>The crux is to have a motivated and energized crew either on Board/ Front Desk or ground operations </li></ul>

25. Airline system Components Airport Management System Compliance and Network Security Inventory and Content Distribution Agile Business Process and Demand Mgmt. Emergency Response & Business Continuity <ul><li>System to make sure that compliance and integration with Airport scheduling system, security measures, circulars, are taken care of. </li></ul><ul><li>Should integrate with airport scheduling system </li></ul><ul><li>Should integrate with airport security system, for checking passenger </li></ul><ul><li>Departure control system integration </li></ul>

26. Challenges facing Airline Industry Key Challenges & Trends Growing Demand Limited Capacity Compliance Safety Innovation Market Liberalization Multi-modal Distribution` Rising Costs Maximize assets' utilization Key Goals Achieve demand-driven supply chain efficiencies and real-time visibility Attain ‘sense & respond' capabilities to improve customer experience

27. Challenges facing Airline Industry <ul><li>Attaining Sustained profitability </li></ul><ul><li>Managing Customer demand of various touch point </li></ul><ul><li>Turning inflexible operative chains into responsive and adaptive service networks </li></ul><ul><li>Enabling new business models for long-term business transformation </li></ul><ul><li>Smooth real-time synchronization of information both internally and across the value network </li></ul><ul><ul><li>not only to allow faster deployment of new strategic customer-facing services, </li></ul></ul><ul><ul><li>but also to improve supply chain efficiencies — as a transition is taking place from a sequential supply chain mode of operation to a meshed workflow, </li></ul></ul><ul><ul><li>where multiple supply networks must be automatically managed and synchronized in real-time. </li></ul></ul><ul><li>Economic and competitive pressure </li></ul><ul><ul><li>Yields / fares are falling </li></ul></ul><ul><ul><li>Costs not falling proportionately (esp. fuel) </li></ul></ul><ul><ul><li>Emergence of low cost carrier and distribution model </li></ul></ul><ul><ul><li>GDS’s continue to increase charges </li></ul></ul><ul><ul><li>Increased competition from LCCs and reinvigorated airlines </li></ul></ul><ul><li>IT costs associated with legacy hosting / reservation architecture are high </li></ul><ul><li>Current systems do not provide modern interfaces that customers demand and employees expect </li></ul><ul><ul><li>Inflexible systems – hard to maintain / improve </li></ul></ul><ul><ul><li>Transaction oriented systems do not easily support product-based or customer-centric views </li></ul></ul><ul><ul><li>Systems were not built to meet current user demands – web sites, screen scrapers and more </li></ul></ul><ul><li>Legacy systems do not exploit low-cost, scaleable technology or modern web-based economics </li></ul><ul><li>Need for Accurate real-time business performance management capabilities </li></ul><ul><li>Need for Fully automated, paper-less, and process-oriented collaborative workflows </li></ul><ul><ul><li>that conform to the regulatory environment. </li></ul></ul>

28. Challenges facing Airline Industry <ul><li>Empowering employees to be more productive </li></ul><ul><li>Demand for any time access to business application through secured layers </li></ul><ul><li>How to accelerate competitive advantage and differentiate airline through improved employee, aircraft and alliance leveraging? </li></ul><ul><li>Compliance with Industry standards </li></ul><ul><li>Automating customer touch points with transformational technologies, such as e-ticketing and self-service kiosks, remains the focal point for investment. </li></ul><ul><li>Decreased customer loyality </li></ul><ul><li>Tracking customer luggage/ cargo by use of RFID </li></ul><ul><li>Need for same day revenue reporting </li></ul><ul><li>Integration with ever emerging payment mode and Desired security from Internet fraudulent transaction </li></ul><ul><li>Merger and acquisition </li></ul><ul><li>Entering the wireless arena </li></ul>

29. IT trends in Airline Industry

34. IT trends in Airline Industry <ul><li>Some Finding From SITA & Airline Business Survey </li></ul><ul><li>No. Of Participating airlines:- 100 </li></ul><ul><li>Region:- Asia Pacific </li></ul><ul><li>Asia-Pacific airlines spend an average of 2.0% of revenues on telecommunications and IT </li></ul><ul><li>50% of airlines have seen their IT budgets increase </li></ul><ul><li>over 2004 </li></ul><ul><li>46% of airlines expect their IT budget to increase in 2006 </li></ul><ul><li>Short-term projects with proven paybacks were rated the highest IT priority by the most airlines – 46% </li></ul><ul><li>At least 73% of airlines expect to offer some form of inflight data connectivity by 2007 45% of airlines plan to offer voice mobile telephony by 2007 </li></ul><ul><li>36% of airlines have deployed self-service kiosks for check-in </li></ul><ul><li>23% of airlines use bar coded boarding passes </li></ul><ul><li>86% of airlines sell some tickets online </li></ul><ul><li>9.7%, or 1 in ten, of all tickets are sold online. Of these, 70% are sold on the airline’s own website 22% of all tickets are fulfilled as e-tickets </li></ul>

35. IT trends in Airline Industry <ul><li>Some Finding From SITA & Airline Business Survey </li></ul><ul><li>No. Of Participating airlines:- 100 </li></ul><ul><li>Region:- Europe </li></ul><ul><li>European airlines spend an average of 1.9% of revenueson telecommunications and IT </li></ul><ul><li>40% of airlines have seen their IT budgets increase over 2004 </li></ul><ul><li>29% of airlines expect their IT budget to increase in 2006 </li></ul><ul><li>Short-term projects with proven paybacks were rated the highest IT priority by the most airlines – 54%. Customer service projects were ranked highest by only 20% </li></ul><ul><li>At least 31% of airlines expect to offer some form of inflight data connectivity by 2007 </li></ul><ul><li>31% of airlines have deployed self-service kiosks for check-in </li></ul><ul><li>17% of airlines currently use bar coded boarding passes </li></ul><ul><li>83% of airlines sell some tickets online </li></ul><ul><li>24%, or nearly 1 in four, of all tickets are sold online Of these, 85% are sold on the airline’s own website </li></ul><ul><li>35% of all tickets are fulfilled as e-tickets </li></ul><ul><li>20% of airlines plan to offer voice mobile telephony by 2007 </li></ul>

36. IT trends in Airline Industry <ul><li>Some Finding From SITA & Airline Business Survey </li></ul><ul><li>No. Of Participating airlines:- 100 </li></ul><ul><li>Region:- North America </li></ul><ul><li>North American airlines spend an average of 1.4% of revenues on telecommunications and IT </li></ul><ul><li>63%, or more than 3 in every five, of all tickets are sold online. Of these, 55% are sold on the airline’s own website Customer service or marketing advantage projects were rated the highest IT priority by the most airlines – 56%. Short-term projects with proven payback were ranked highest by 44% </li></ul><ul><li>At least 11% of airlines expect to offer some form of inflight data connectivity by 2007 </li></ul><ul><li>11% of airlines plan to offer voice mobile telephony by 2007 </li></ul><ul><li>56% of airlines have deployed self-service kiosks for check-in </li></ul><ul><li>67% of airlines currently use bar coded boarding passes </li></ul><ul><li>85% of airlines sell some tickets online </li></ul><ul><li>67% of airlines expect their IT budget to increase in 2006 </li></ul><ul><li>56% of airlines have seen their IT budgets increase over 2004 </li></ul>

37. Business Transformation to Support Innovation Source: IDC European Vertical Market LOB Survey, October 2006 – N. of respondents: 18 Top Business Initiatives in the CEO Agenda Airlines, Railways, Public Transport (Ranked in order of Importance) <ul><li>Customer Service enhancement </li></ul><ul><li>Supply chain efficiency improvement </li></ul><ul><li>IT organization responsiveness and efficiency improvement </li></ul><ul><li>Regulatory Compliance </li></ul><ul><li>Efficient Sourcing & Procurement </li></ul><ul><li>Mobile Workforce </li></ul><ul><ul><li>Growing demand, limited capacity & profit pressure are requiring new dynamic & responsive IT systems </li></ul></ul>Continuous Demand-Driven Innovation

38. IT trends in Airline Industry <ul><li>Summary </li></ul><ul><li>The writing on wall is clear. More and more companies are planning to spend on IT in areas of </li></ul><ul><li>IP enabling </li></ul><ul><li>Outsourcing for advantage </li></ul><ul><li>E-ticketing </li></ul><ul><li>Migration of legacy </li></ul><ul><li>RFID solutions </li></ul><ul><li>VOIP </li></ul><ul><li>Call Center </li></ul><ul><li>Data and Voice connectivity </li></ul><ul><li>Infrastructure upgrade </li></ul>Airlines are Looking to Outsource and adopt/ develop customer centric best of breed solution

39. Developing IT Roadmap for Airline Airline Website Launch Study Of Airline IT System Evaluating IT readiness Understanding Long Term Plan Building Framework For Internal Portal Deciding IT Infrastructure Launching Basic Intranet Portal Launching Basic FFP/CLP Pain Point Prioritization & Application Launch Schedule Time Frame 0- 1 Year

40. Developing IT Roadmap for Airline Time Frame 1- 3 Year Inventory Application Revenue Management Application Crew/ Aircraft Scheduling Application Other Back end Application Integrated Back End System Cargo Management System Airline maintenance System Central Database Dynamic Packaging Introducing Online FFP/CLP Transitioning Website Into Shopping Portal Web Check in, SMS check in Application Integrated Backend System` Introducing E-ticketing/ Web Booking Customer Focused Application Introducing Wireless Network System

41. Developing IT Roadmap for Airline Planning IT system for Empowered Airline Time Frame 3+ Year Data Warehouse &BI Central Database Demand Forecasting System Alert Systems Integrated Back End System CRM System Wireless Network (Wi-Fi) Internet Network Mobile Network Front Office/Cal Center Robust Delivery Network

42. ROI-IT Empowered Enterprise Do you Know? Delta Airlines uses special RFID technologies to monitor the performance of aircraft engines to compare latest data with historical data to anticipate potential problems. Maintenance costs have been reduced by half . <ul><li>Move toward ticket less travel </li></ul><ul><li>Faster sales closure, lesser load on call center </li></ul><ul><li>Use of RFIP for better cargo tracking </li></ul><ul><li>Revenue Management system, improves identifies yield improvement areas. More Profitability </li></ul><ul><li>Better scheduling and lesser flight delays </li></ul><ul><li>Improved customer retention </li></ul><ul><li>Reduced time in booking and size of queue </li></ul><ul><li>Flight schedule change sent to customer:- happy customer </li></ul><ul><li>Revenue through shopping at Airline Portal </li></ul><ul><li>Better fare management and Dynamic packaging of inventory </li></ul>1-3 year <ul><li>Reduced Distribution cost </li></ul><ul><li>Increased distribution channel </li></ul><ul><li>Increased customer delight </li></ul><ul><li>Improved top-line </li></ul><ul><li>Better informed employee </li></ul><ul><li>Reduced Employee Administration cost </li></ul><ul><li>Profile based application access through Portal </li></ul>0-1 Year Benefit Time Period

43. ROI-IT Empowered Enterprise <ul><li>Event driven responsive organization with focus on customer </li></ul><ul><li>Integrated and loosely coupled system for business agility </li></ul><ul><li>Customer retention and partition </li></ul><ul><li>Improved customer buying behavior forecasting </li></ul><ul><li>Mobile work force, improved productivity </li></ul><ul><li>Airline portal starts to suggest customer on flight and promotion based on his/her past behavior </li></ul><ul><li>Web 2.0, greater involvement and social networking, more clout to airline </li></ul><ul><li>Ticket less airline </li></ul><ul><li>Improvement exception management in Airline Operation and supply chain, through alert systems </li></ul><ul><li>Stabilized, yet flexible IT environment for growth </li></ul><ul><li>Overall, company will witness improved Top line, growth and customer satisfaction, with each successful IT initiative. </li></ul>3+ Year Benefit Time Period

44. Most Urgent IT Improvements IDC Recommendations Remove Legacy Silos-based platforms Improve Networks Improve Mobile Workers Efficiencies Improve Security & Safety SOA IP, Optical Wireless Networks IT Security, Sensor Networks, Surveillance Advanced Demand Mgmt. Advanced Planning, Scheduling

45. Airline Networks Need to Rely on Advanced Communication Networks <ul><li>Key Goals: </li></ul><ul><ul><li>Real-time monitoring of mobile assets and cargo </li></ul></ul><ul><ul><li>Increased operational accuracy </li></ul></ul><ul><ul><li>Higher transport efficiencies </li></ul></ul><ul><ul><li>VoIP, IP-based video surveillance to improve safety while reducing communication costs </li></ul></ul><ul><ul><li>Enabling flexible deployments of new workforce applications and customer services </li></ul></ul>Optimized Mobile Workforce efficiencies are instrumental to enhance mobile assets utilization & improve the customer service Internet Back-end Wireless Devices Wireless Network backbone <ul><li>Sensor Networks </li></ul><ul><li>RFID </li></ul><ul><li>Biometrics </li></ul><ul><li>Explosive detection </li></ul><ul><li>Etc… </li></ul>

46. <ul><li>Intelligent continuous schedule </li></ul><ul><li>light schedule and resources allocation can be optimized up to hours before actual operation </li></ul>Using IT to Improve Operations Weather forecast Ground-Delay Air-Delay Other Factor Flight schedule Fleet assignment Crew planning Proactively System Can Re-schedule Activities Based on Expected situtaion Flight Delay reduced/ Avoided Happy Customer

47. <ul><li>Dynamic management : Intelligent queuing </li></ul><ul><li>Passenger information is available to airline (amount of luggage, nationality, number of children, visa status etc </li></ul><ul><li>separate passenger into fast/medium/slow based on their demand service rate </li></ul>Using IT to Improve Operations Server (check in- Counter) Fast Medium Slow Server (check in- counter) queue Queue Slow Queue Before Using Intelligent System to Bifurcate Passenger After Using Intelligent System

48. JetBlue: A Success Story <ul><li>Gained competitive advantage where others failed </li></ul><ul><li>Proper technology and management methods </li></ul><ul><li>Reducing costs resulting in reduced pricing </li></ul><ul><li>Improving service </li></ul><ul><li>Massive Automation </li></ul><ul><ul><li>Automation of services with software </li></ul></ul><ul><ul><ul><li>Combination reservation system and accounting system </li></ul></ul></ul><ul><ul><ul><li>Supports customer services and sales tracking </li></ul></ul></ul><ul><ul><li>Electronic tickets </li></ul></ul><ul><ul><ul><li>No paper handling or expense </li></ul></ul></ul><ul><ul><ul><li>Encourages online ticket purchases </li></ul></ul></ul><ul><ul><ul><li>Avoids travel agents </li></ul></ul></ul><ul><ul><ul><li>Significant savings in cost </li></ul></ul></ul><ul><ul><li>Maintenance information system </li></ul></ul><ul><ul><ul><li>Logs all airplane parts and time cycles </li></ul></ul></ul><ul><ul><ul><li>Reduces manual tracking costs </li></ul></ul></ul><ul><ul><li>Flight planning software </li></ul></ul><ul><ul><ul><li>Maximize seats occupied on a flight </li></ul></ul></ul><ul><ul><ul><li>Reduced planning costs </li></ul></ul></ul>

49. <ul><li>Massive Automation </li></ul><ul><ul><li>In-house software for tracking operational data </li></ul></ul><ul><ul><ul><li>Updated on a flight by flight basis </li></ul></ul></ul><ul><ul><ul><li>Accessible by airline’s 2,800 employees </li></ul></ul></ul><ul><ul><ul><li>Managers are able to respond immediately to problems </li></ul></ul></ul><ul><ul><li>Wireless devices for employees </li></ul></ul><ul><ul><ul><li>Report and respond to irregular events </li></ul></ul></ul><ul><ul><ul><li>Quick response </li></ul></ul></ul><ul><ul><ul><li>Events recorded for future analysis </li></ul></ul></ul><ul><ul><li>Training records stored electronically </li></ul></ul><ul><ul><ul><li>Easy to update </li></ul></ul></ul><ul><ul><ul><li>Efficient retrieval </li></ul></ul></ul><ul><ul><li>Away from Tradition </li></ul></ul><ul><ul><ul><li>Decision to not use the hub and spoke routing method </li></ul></ul></ul><ul><ul><ul><li>Paperless Cockpits </li></ul></ul></ul><ul><ul><ul><li>Laptops for Pilots </li></ul></ul></ul><ul><ul><ul><li>Harnessing IT to maintain a strategic gap </li></ul></ul></ul>JetBlue: A Success Story (Cont.)

50. See What E-Distribution can do Continental Airlines' Web Site Generates Record Sales ; Hitting $2 Billion Annual Rate HOUSTON, Aug. 11 -- Continental Airlines today announced that its continental.com web site is generating record sales volume for the airline, recently setting a single-day sales record and achieving record sales volume of $2 billion for the most recent 12-month period, ending July 31. “ We’ve made a significant investment in our web site’s features and functionality to make it a full-service travel site,” said Jim Compton, executive vice president-marketing. “Seeing this dramatic growth in the site’s usage is rewarding because this is such an efficient method for ticket sales.” On one day in July, continental.com racked up $8.5 million in sales , setting an all-time single-day record . This record volume is equal to 34% of the worldwide passenger sales volume that Continental achieves from all sources in an average day. Continental Airlines Press Release, Aug 11 2005

51. <ul><li>Innovation in Technology key to sustained profitability for airlines </li></ul><ul><li>Identifying, improving and Integrating business process using IT can create a true “Dynamic Business Platform” to fuel the growth of Airlines </li></ul><ul><li>Airlines will continue to outsource non-critical operation for improve profitability </li></ul><ul><li>GDS may come under threat from GNE </li></ul><ul><li>Increasing distribution channel for ticket delivery, improved customer experience, customer involvement is the key to success in Airline Business </li></ul><ul><li>Bigger Airlines are more at threat because of changing environment, then newly emerged LCC’s. </li></ul><ul><li>Airlines will Use RFID, Wireless network, hand held devices, Intelligent systems to maintain service differentiation and gain customer loyalty. </li></ul><ul><li>Airlines are in a stage where they are evolving from transaction centric enterprises to customer focused enterprise. </li></ul><ul><li>Collaborative application, bio-metric sensors and workflow automation tools will continue to gain more acceptance with Airlines. </li></ul>Few Thoughts before Inviting Question

52. Thank You! Questions? Please email me at: [email_address] Siddhartha Tripathi Manager Marketing BSIL www.bsil.com