Introduction To Airline Information System 4880 Mench

Introducing Airline Information System
Agenda
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Evolution of Airline Industry Classifying Airlines and Introducing IATA Airline Industry Value Chain Introducing Airline system Components Challenges facing Airline Industry IT trends in Airline Industry Developing IT Roadmap for Airline Most Urgent IT Improvements IDC Recommendations Using IT to Improve Operations:- Visiting few Airline Operations IT Enabled Airline Success Story Before we say Thank You
Evolution of Airline Industry

We have evolved from this
Contd..
And this
Contd..
To this
Contd..
And Some Stats to think !!

28% of all online purchases are travel related Travel & Tourism market:
1999: $2.1 trillion 2010: $3.9 trillion
(Source: Satellite Accounting Research)
Online Travel Booking

1999: $6 billion 2002: $30 billion
(Source: PhoCusWright)
Contd..
And Some More Stats to think !!

US majors internet sales Carrier Alaska Airlines % Flown Booked Online 36%
America West Airlines

US Airways Delta Air Lines Continental Airlines Northwest Airlines
33%
24% 24% 22% 22%
United Airlines
American Airlines
22%
20%
Types of Airlines( US Classification)

Acc. To US Federal Government Airlines categorized into
Major
A major airline is defined as an airline that generates more than $1-billion in revenue annually. There were 12 major airlines as of 2000
National
Scheduled airlines with annual operating revenues between $100-million and $1-billion. Examples of national airlines include Aloha, Atlas Air, Airtran, Emery Worldwide, Evergreen, Hawaiian and Midwest Express.
Regional
Airlines service particular regions of the United States, filling the niche markets that the major and national airlines may overlook
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.
Medium regional - These airlines operate on a smaller scale, with operating revenues of under $20-million, and often use only small aircraft.
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.
Contd..
Prominent Organizations
In Airline Industry
IATA
International Air Traffic Association between 1919 and WWII International Air Transport Association since 1945
IATA* has two functions
Trade Association (technical, legal, financial, traffic services and most agency matters); Tariff Coordination (passenger fares and cargo rates, agents' commissions).
*IATA only controls International flights
Introducing SITA, OAG and ATPCO.

SITA
Societe Internationale des communications aeronautiques (SITA) handles shared communication means, including network and devices
OAG
Official Airline Guide Published by the homonymous company contains the airline schedule information, so for every flight essentially:
The departure and destination airports, The departure and arrival times, The flight number.
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.
ATPCO
Airline Tariff Publishing Company (ATPCO) is a fare distributing company
Introducing GDS
GDS:- Global Distribution System, 4 Major GDS System architectures are largely based on a mainframe TPF (Transaction Processing Facility) Sabre Created by
American Airlines
Amadeus Created by
Air France Iberia Lufthansa SAS
Galileo
Created by
Aer Lingus Air Canada Alitalia British Airways KLM Swissair TAP US Airways
WORLDSPAN
Created by
Delta Northwest Trans World Airlines
Airline Industry Value Chain

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

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

System to book ticket on airline. Should at least provide for
Central Reservation System
1. 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. 2. E Ticketing:-e-Ticketing replaces a conventional paper ticket with an
electronic ticket. All booking and ticket details are stored in the airlines
computer system. Passenger is issued e-ticket receipt for security and immigration purposes. 3. Booking through ATM and Kiosk
4. Integration with Major Global Distributions

5. Integration with call center for telephonic booking

Remember 80/20 rule. 20% customer give 80% revenue.
CRM System
The CRM system should provide

1. Prediction into customer buying behavior 2. Identify frequently flying and high profile flyers 3. Integrate to DW/BI system
4. Forecast demand
5. Identify customers for marketing campaign based on customer profile and past data 6. Provide for customer feedback through various touch points ( SMS,
PDA, Survey):- Involve Customer
The crux is to identify behavior of customer/ prospect for better retention and service

Pricing And Revenue Management System
The use of Real-Time Dynamic Pricing Engine positions airlines

to 1. Adapt inventory controls to the very dynamic market conditions including influx of low-fare competition, alternate pricing models, and
distribution channel differences.

2.
It allows integrated controls for selling over e-commerce channels along with traditional distribution channels and provides the infrastructure for customer-centric revenue optimization
3. 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.

Finance System
System to provide the easy/configurable view of how airline is performing. The system should at the minimum provide for
Automating extracting data from revenue accounting and other sources Allow upload of manual data such as budget and target Should integrate with Forecasting and Procurement system Provide KPI as Load factor By period , sector, route, origin and destination By market-By point of sale/agent wise, product
Allow user to create reports on demand Should integrate with DW, Audit controls

Sales and Marketing System
System to Manage sales and marketing. The system should at the minimum provide for
Managing sales record and integration with Financial and revenue system Alerts based on defined competitors events Daily KPI monitoring Campaign management Target and actual achieved reporting by Reason Route, flight, slot and carrier type Configurable parameter
Alerts integrated with CRM system

Business Processing System
The use of System to define new business scenario and processes including
1. New fares in response to campaign .

2. Security and baggage handling process 3. Baggage tracking 4. Procurement policy
IT
Material
5. Easy to use reporting and data analysis 6. Defining new distribution channel
7. Check In process
8. Catering and dining forecasting process The Crux is to use system to define process and track and improve the business process

Maintenance And Engineering System
System to Cover aircraft maintenance and engineering operation 1. To ensures real-time, total control of the maintenance environment 2. To optimizes daily operations and complement managerial decisions, resulting in significant cost savings and improvement in overall performance. 3. Should integrate with with flight operation systems and different finance and human resource management applications.

HR Management System
System to manage Most Important Resource ( Employee) Managing employee lifecycle in organization including Recruitment requisition, Interview and reference check
Employee Induction and training

Leave Management Performance Management Security Checks
Retention and Motivation scheme

Productivity Improvement

Flight Operation System
System to manage Flight daily operations from a compact interface and report operational results 1. Movement Management
2. Graph of Schedule with status

3. Aircraft Availability 4. Produce Delay Report 5. Handle Incoming SITA, GDS message
6. Update Schedule

Air Cargo System
System to provide Tracking and Managing Cargo. The system should at the minimum provide for Use of RFID tags to determine cargo location in Bay area Tracking Cargo till it reaches its end destination Suggesting bay area for cargo depending on other cargo in line Pricing based on weight/ Location and type Reporting capability and integration with procurement system

Crew Management System
System to schedule crew staff. The system should at the minimum provide for Scheduling of cabin crew Compliance to labor laws
Crew teaming alert ( to alert if 2 people on same flight/ team has tendency to fight) Crew hour logging
The crux is to have a motivated and energized crew either on Board/ Front Desk or ground operations

Airport Management System
System to make sure that compliance and integration with Airport scheduling
system, security measures, circulars, are taken care of.

1. Should integrate with airport scheduling system 2. Should integrate with airport security system, for checking passenger 3. Departure control system integration
Challenges facing Airline Industry

Key Challenges & Trends
Key Goals
Maximize assets' utilization
Growing Demand
Innovation
Limited Capacity
Rising Costs
Multi-modal Distribution` Market Liberalization
Achieve demanddriven supply chain efficiencies and real-time visibility

Attain sense & respond' capabilities to improve customer experience

1. 2. 3. 4. 5. Attaining Sustained profitability Managing Customer demand of various touch point Turning inflexible operative chains into responsive and adaptive service networks Enabling new business models for long-term business transformation Smooth real-time synchronization of information both internally and across the value network
not only to allow faster deployment of new strategic customer-facing services, 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, where multiple supply networks must be automatically managed and synchronized in real-time.
6.
Economic and competitive pressure

Yields / fares are falling Costs not falling proportionately (esp. fuel) Emergence of low cost carrier and distribution model GDSs continue to increase charges Increased competition from LCCs and reinvigorated airlines
7. 8.
IT costs associated with legacy hosting / reservation architecture are high Current systems do not provide modern interfaces that customers demand and employees expect
Inflexible systems hard to maintain / improve Transaction oriented systems do not easily support product-based or customer-centric views Systems were not built to meet current user demands web sites, screen scrapers and more
9. Legacy systems do not exploit low-cost, scaleable technology or modern web-based economics 10. Need for Accurate real-time business performance management capabilities 11. Need for Fully automated, paper-less, and process-oriented collaborative workflows
that conform to the regulatory environment.

12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. Empowering employees to be more productive Demand for any time access to business application through secured layers How to accelerate competitive advantage and differentiate airline through improved employee, aircraft and alliance leveraging? Compliance with Industry standards Automating customer touch points with transformational technologies, such as e-ticketing and self-service kiosks, remains the focal point for investment. Decreased customer loyality Tracking customer luggage/ cargo by use of RFID Need for same day revenue reporting Integration with ever emerging payment mode and Desired security from Internet fraudulent transaction Merger and acquisition Entering the wireless arena
IT trends in Airline Industry

Some Finding From SITA & Airline Business Survey No. Of Participating airlines:- 100 Region:- Asia Pacific
1. 2. 3. 4. 5. Asia-Pacific airlines spend an average of 2.0% of revenues on telecommunications and IT 50% of airlines have seen their IT budgets increase over 2004 46% of airlines expect their IT budget to increase in 2006 Short-term projects with proven paybacks were rated the highest IT priority by the most airlines 46% 6. 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 7. 36% of airlines have deployed self-service kiosks for check-in 8. 23% of airlines use bar coded boarding passes 9. 86% of airlines sell some tickets online 10. 9.7%, or 1 in ten, of all tickets are sold online. Of these, 70% are sold on the airlines own website 22% of all tickets are fulfilled as e-tickets

Some Finding From SITA & Airline Business Survey No. Of Participating airlines:- 100 Region:- Europe
1. 2. 3. 4. European airlines spend an average of 1.9% of revenueson telecommunications and IT 40% of airlines have seen their IT budgets increase over 2004 29% of airlines expect their IT budget to increase in 2006 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% 5. At least 31% of airlines expect to offer some form of inflight data connectivity by 2007 6. 31% of airlines have deployed self-service kiosks for check-in 7. 17% of airlines currently use bar coded boarding passes 8. 83% of airlines sell some tickets online 9. 24%, or nearly 1 in four, of all tickets are sold online Of these, 85% are sold on the airlines own website 10. 35% of all tickets are fulfilled as e-tickets 11. 20% of airlines plan to offer voice mobile telephony by 2007

Some Finding From SITA & Airline Business Survey No. Of Participating airlines:- 100 Region:- North America
1. 2. North American airlines spend an average of 1.4% of revenues on telecommunications and IT 63%, or more than 3 in every five, of all tickets are sold online. Of these, 55% are sold on the airlines 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% At least 11% of airlines expect to offer some form of inflight data connectivity by 2007 11% of airlines plan to offer voice mobile telephony by 2007 56% of airlines have deployed self-service kiosks for check-in 67% of airlines currently use bar coded boarding passes 85% of airlines sell some tickets online 67% of airlines expect their IT budget to increase in 2006 56% of airlines have seen their IT budgets increase over 2004
3. 4. 5. 6. 7. 8. 9.
Business Transformation to Support Innovation

Top Business Initiatives in the CEO Agenda Airlines, Railways, Public Transport
1. 2. 3. 4. 5. 6. Customer Service enhancement Supply chain efficiency improvement IT organization responsiveness and efficiency improvement Regulatory Compliance Efficient Sourcing & Procurement Mobile Workforce
(Ranked in order of Importance)
Continuous Demand-Driven Innovation
Growing demand, limited capacity & profit pressure are requiring new dynamic & responsive IT systems
Source: IDC European Vertical Market LOB Survey, October 2006 N. of respondents: 18

Summary
The writing on wall is clear. More and more companies are planning to spend on IT in areas of
1. 2. 3. 4. 5. 6. 7. 8. 9. IP enabling Outsourcing for advantage E-ticketing Airlines are Looking to Outsource and adopt/ develop Migration of legacy customer centric RFID solutions best of breed solution VOIP Call Center Data and Voice connectivity Infrastructure upgrade
Developing IT Roadmap for Airline
Study Of Airline IT System
Understanding Long Term Plan

Evaluating IT readiness
Launching Basic FFP/CLP
Pain Point Prioritization & Application Launch Schedule
Deciding IT Infrastructure
Airline Website Launch Launching Basic Intranet Portal Building Framework For Internal Portal
Integrated Backend System`

Inventory Application Revenue Management Application
Customer Focused Application

Transitioning Website Into Shopping Portal
Introducing Online FFP/CLP
Cargo Management System
Airline maintenance System
Integrated Back End System
Central Database
Dynamic Packaging
Web Check in, SMS check in Application Introducing E-ticketing/ Web Booking
Other Back end Application
Crew/ Aircraft Scheduling Application
Introducing Wireless Network System
Data Warehouse &BI
Demand Forecasting System
Alert Systems
CRM System
Central Database
Integrated Back End System
Wireless Network (Wi-Fi)
Planning IT system for Empowered AirlineCenter Internet Network Mobile Network Front Office/Cal
Robust Delivery Network
ROI-IT Empowered Enterprise

Time Period 0-1 Year Benefit
1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Reduced Distribution cost Increased distribution channel Do you Know? Delta Airlines uses special RFID Increased customer delight technologies to monitor the performance of aircraft engines to Improved top-line compare latest data with historical data to anticipate potential problems. Better informed employee Maintenance costs have been Reduced Employee Administration cost half. reduced by Profile based application access through Portal Move toward ticket less travel Faster sales closure, lesser load on call center Use of RFIP for better cargo tracking Revenue Management system, improves identifies yield improvement areas. More Profitability Better scheduling and lesser flight delays Improved customer retention Reduced time in booking and size of queue Flight schedule change sent to customer:- happy customer Revenue through shopping at Airline Portal Better fare management and Dynamic packaging of inventory
1-3 year
ROI-IT Empowered Enterprise

Time Period 3+ Year Benefit
1. 2. 3. 4. 5. 6. Event driven responsive organization with focus on customer Integrated and loosely coupled system for business agility Customer retention and partition Improved customer buying behavior forecasting Mobile work force, improved productivity Airline portal starts to suggest customer on flight and promotion based on his/her past behavior Web 2.0, greater involvement and social networking, more clout to airline Ticket less airline Improvement exception management in Airline Operation and supply chain, through alert systems Stabilized, yet flexible IT environment for growth
7.
8. 9. 10.
Overall, company will witness improved Top line, growth and customer satisfaction, with each successful IT initiative.
Most Urgent IT Improvements IDC Recommendations

Remove Legacy Silos-based platforms
Improve Networks
Improve Mobile Workers Efficiencies
Advanced Demand Mgmt.
Improve Security & Safety
SOA
IP, Optical
Wireless Networks
Advanced Planning, Scheduling
IT Security, Sensor Networks, Surveillance
Airline Networks Need to Rely on Advanced Communication Networks

Wireless Devices
Wireless Network backbone Internet Back-end Sensor Networks RFID Biometrics Explosive detection Etc
Key Goals:
1. Real-time monitoring of mobile assets and cargo 2. Increased operational accuracy 3. Higher transport efficiencies 4. VoIP, IP-based video surveillance to improve safety while reducing communication costs 5. Enabling flexible deployments of new workforce applications and customer services
Optimized Mobile Workforce efficiencies are instrumental to enhance mobile assets utilization & improve the customer service
Using IT to Improve Operations

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

Dynamic management: Intelligent queuing
Passenger information is available to airline (amount of luggage, nationality, number of children, visa status etc separate passenger into fast/medium/slow based on their demand service rate
queue Fast Queue Slow Queue
Server (check inCounter)
Medium
Server (check incounter)
Slow
Before Using Intelligent System to Bifurcate Passenger
After Using Intelligent System
JetBlue: A Success Story

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

Maintenance information system

Flight planning software

JetBlue: A Success Story (Cont.)

Massive Automation
In-house software for tracking operational data
Updated on a flight by flight basis Accessible by airlines 2,800 employees Managers are able to respond immediately to problems Report and respond to irregular events Quick response
Wireless devices for employees

Events recorded for future analysis

Easy to update Efficient retrieval
Training records stored electronically

Away from Tradition

Decision to not use the hub and spoke routing method Paperless Cockpits Laptops for Pilots Harnessing IT to maintain a strategic gap
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. Weve made a significant investment in our web sites features and functionality to make it a full-service travel site, said Jim Compton, executive vice presidentmarketing. Seeing this dramatic growth in the sites 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
1. 2. 3. 4. 5. 6. 7. 8. 9.
Innovation in Technology key to sustained profitability for airlines Identifying, improving and Integrating business process using IT can create a true Dynamic Business Platform to fuel the growth of Airlines Airlines will continue to outsource non-critical operation for improve profitability GDS may come under threat from GNE Increasing distribution channel for ticket delivery, improved customer experience, customer involvement is the key to success in Airline Business Bigger Airlines are more at threat because of changing environment, then newly emerged LCCs. Airlines will Use RFID, Wireless network, hand held devices, Intelligent systems to maintain service differentiation and gain customer loyalty. Airlines are in a stage where they are evolving from transaction centric enterprises to customer focused enterprise. Collaborative application, bio-metric sensors and workflow automation tools will continue to gain more acceptance with Airlines.
Thank You!
Questions? Please email me at: siddhartha@bsil.com Siddhartha Tripathi Manager Marketing BSIL www.bsil.com

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Introducing Airline Information System

Evolution of Airline Industry

And Some Stats to think !!

Online Travel Booking

And Some More Stats to think !!

America West Airlines

Types of Airlines( US Classification)

*IATA only controls International flights

Introducing SITA, OAG and ATPCO.

Airline Industry Value Chain

Promotion Advertising Advantage Program Travel Agent Programs Group Sales

Lost Baggage Service Complaint Follow-up

Airline system Components

Air Cargo System

Maintenance And Engineering System

Business Processing System

Sales and Marketing System

Airport Management System

Flight Operation System

Crew Management System

Central Reservation System

Agile Business Process and Demand Mgmt.

Airline system Components

1. Internet booking:- Internet Booking System enables passengers, travel

4. Integration with Major Global Distributions

Agile Business Process and Demand Mgmt.

Airline system Components

The CRM system should provide

PDA, Survey):- Involve Customer

Agile Business Process and Demand Mgmt.

Airline system Components

The use of Real-Time Dynamic Pricing Engine positions airlines

distribution channel differences.

3. Revenue Management System

Agile Business Process and Demand Mgmt.

Airline system Components

Agile Business Process and Demand Mgmt.

Airline system Components

Alerts integrated with CRM system

Agile Business Process and Demand Mgmt.

Airline system Components

1. New fares in response to campaign .

Agile Business Process and Demand Mgmt.

Airline system Components

Agile Business Process and Demand Mgmt.

Airline system Components

Employee Induction and training

Retention and Motivation scheme

Agile Business Process and Demand Mgmt.

Airline system Components

2. Graph of Schedule with status

Agile Business Process and Demand Mgmt.

Airline system Components

Agile Business Process and Demand Mgmt.

Airline system Components

Agile Business Process and Demand Mgmt.

Airline system Components

system, security measures, circulars, are taken care of.

Agile Business Process and Demand Mgmt.

Challenges facing Airline Industry

Multi-modal Distribution` Market Liberalization

Achieve demanddriven supply chain efficiencies and real-time visibility