Introduction To Airline Information System 4880

Introducing
Airline Information
System
By
Siddhartha Tripathi
Monday, November 1, 2010
Agenda
1. Evolution of Airline Industry
2. Classifying Airlines and Introducing IATA
3. Airline Industry Value Chain
4. Introducing Airline system Components
5. Challenges facing Airline Industry
6. IT trends in Airline Industry
7. Developing IT Roadmap for Airline
8. Most Urgent IT Improvements IDC Recommendations
9. Using IT to Improve Operations:- Visiting few Airline Operations
10. IT Enabled Airline Success Story
11. 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 % Flown
Booked Online
Alaska Airlines 36%
America West Airlines 33%
US Airways 24%
Delta Air Lines 24%
Continental Airlines 22%
Northwest Airlines 22%
United Airlines 22%
American Airlines 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
-Financial Policy - Accounting -Regulatory Compliance - Legal - Community Affairs
HUMAN Flight, route and

RESOURCE
Pilot Training Baggage Handling Agent In-flight
yield analyst Safety Training Training Training Training
MANAGEMENT
training
Product
TECHNOLOGY
Computer Reservation System, In-flight System Baggage Tracking
Flight Scheduling System, Yield Management System Development
DEVELOPMENT System
Market Research
Information Technology
PROCUREMENT Communications
•Route Selection •Ticket Counter •Baggage System •Promotion •Lost Baggage Service
•Passenger Service Operations •Flight •Advertising •Complaint Follow-up
System •Gate Operations Connections •Advantage
•Yield Management •Aircraft •Rental Car and Program
System (Pricing) Operations Hotel Reservation •Travel Agent
We Need •Fuel •On-board Service System Programs
•Flight Scheduling •Baggage Handling •Group Sales
Process and Efficient
•Crew Scheduling •Ticket Offices
System, •Facilities Planning
To derive value•Aircraft
from Acquisition
Value Chain
INBOUND OPERATIONS OUTBOUND MARKETING SERVICE
LOGISTICS LOGISTICS AND SALES
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
HR Management Air Cargo
Revenue Management CRM
System System
System System
Maintenance
And
Business Processing Sales and Marketing
Engineering Airport Management
System System
System System
Flight Operation
System Finance Central Reservation
Crew Management
System System
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 airline’s
computer system. Passenger is issued e-ticket receipt for security and
immigration purposes.
3. Booking through ATM and Kiosk
4. Integration with Major Global Distribution’s
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 The use of Real-Time Dynamic Pricing Engine positions airlines
Revenue Management
System 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 to provide the easy/configurable view of how airline is performing.

System
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 to Manage sales and marketing. The system should at the minimum
System
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


The use of System to define new business scenario and processes including
Business Processing 1. New fares in response to campaign .
System
2. Security and baggage handling process
3. Baggage tracking
4. Procurement policy
• IT
• Material
1. Easy to use reporting and data analysis
2. Defining new distribution channel
3. Check In process
4. 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 to provide Tracking and Managing Cargo. The system should at the
System
minimum provide for
• Use of RFID tags to determine cargo location in Bay area
• Tracking Cargo till it reaches it’s 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 to schedule crew staff. The system should at the minimum provide
System
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


System to make sure that compliance and integration with Airport scheduling
Airport Management
System
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 Key Goals
& Trends
Maximize assets'
utilization
Achieve demand-
driven supply
Growing Limited
Capacity chain
Demand
Innovation efficiencies and
real-time
Rising Multi-modal visibility
Costs Distribution`
Market
Liberalization Attain ‘sense &
respond'
capabilities to
improve
customer
experience
1. Attaining Sustained profitability
2. Managing Customer demand of various touch point
3. Turning inflexible operative chains into responsive and adaptive service networks
4. Enabling new business models for long-term business transformation
5. 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.
1. Economic and competitive pressure
– Yields / fares are falling
– Costs not falling proportionately (esp. fuel)
– Emergence of low cost carrier and distribution model
– GDS’s continue to increase charges
– Increased competition from LCCs and reinvigorated airlines
1. IT costs associated with legacy hosting / reservation architecture are high
2. 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
1. Legacy systems do not exploit low-cost, scaleable technology or modern web-based economics
2. Need for Accurate real-time business performance management capabilities
3. Need for Fully automated, paper-less, and process-oriented collaborative workflows
– that conform to the regulatory environment.
12. Empowering employees to be more productive
13. Demand for any time access to business application through secured layers
14. How to accelerate competitive advantage and differentiate airline through improved
employee, aircraft and alliance leveraging?
15. Compliance with Industry standards
16. Automating customer touch points with transformational technologies, such as e-ticketing and
self-service kiosks, remains the focal point for investment.
17. Decreased customer loyality
18. Tracking customer luggage/ cargo by use of RFID
19. Need for same day revenue reporting
20. Integration with ever emerging payment mode and Desired security from Internet fraudulent
transaction
21. Merger and acquisition
22. 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. Asia-Pacific airlines spend an average of 2.0% of revenues on telecommunications and IT

2. 50% of airlines have seen their IT budgets increase
3. over 2004
4. 46% of airlines expect their IT budget to increase in 2006
5. 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 airline’s own website 22% of
all tickets are fulfilled as e-tickets
Region:- Europe
1. European airlines spend an average of 1.9% of revenueson telecommunications and IT

2. 40% of airlines have seen their IT budgets increase over 2004
4. 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
7. 17% of airlines currently use bar coded boarding passes
9. 24%, or nearly 1 in four, of all tickets are sold online Of these, 85% are sold on the airline’s own
website
10. 35% of all tickets are fulfilled as e-tickets
11. 20% of airlines plan to offer voice mobile telephony by 2007
Region:- North America
1. North American airlines spend an average of 1.4% of revenues on telecommunications and IT

2. 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%
3. At least 11% of airlines expect to offer some form of inflight data connectivity by 2007
4. 11% of airlines plan to offer voice mobile telephony by 2007
6. 67% of airlines currently use bar coded boarding passes
9. 56% of airlines have seen their IT budgets increase over 2004
Business Transformation to Support
Innovation
Top Business Initiatives in the CEO Agenda
Airlines, Railways, Public Transport
1. Customer Service enhancement
2. Supply chain efficiency improvement
3. IT organization responsiveness and efficiency improvement
4. Regulatory Compliance
5. Efficient Sourcing & Procurement
6. 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. IP enabling
2. Outsourcing for advantage
3. E-ticketing
4. Migration of legacy
Airlines are
5. RFID solutions
6. VOIP
Looking to Outsource and adopt/ develop
7. Call Center customer centric
8. Data and Voice connectivity best of breed solution
9. Infrastructure upgrade
Developing IT Roadmap for Airline
Study Of Airline Understanding

IT System Long Term Plan
Evaluating IT
readiness
Launching Basic
FFP/CLP
Pain Point Prioritization
& Deciding IT
Application Launch Schedule Infrastructure
Airline Website Launch
Launching Basic Building Framework

Intranet Portal For Internal Portal
Integrated Backend System` Customer Focused Application
Inventory Revenue Management

Application Application Transitioning Website
Into Shopping Portal
Introducing
Online FFP/CLP
Cargo Management
Airline maintenance
System
Central
System
Dynamic Packaging
Integrated Database
Back End System
Web Check in, SMS check in
Application
Introducing
E-ticketing/ Web Booking
Crew/ Aircraft
Other Back end
Scheduling
Application Application
Introducing
Wireless Network System
Demand
Data Warehouse
Forecasting Alert Systems CRM System
&BI
System
Central Database
Integrated Back End System
Robust Delivery Network

Planning IT
Wireless Network
system
Internet Network
for Empowered
Mobile Network
Airline
Front Office/Cal Center
(Wi-Fi)
ROI-IT Empowered Enterprise
Time Period Benefit
0-1 Year 1. Reduced Distribution cost
2. Increased distribution channel
Do you Know?
3. Increased customer delight Delta Airlines uses special RFID
technologies to monitor the
4. Improved top-line performance of aircraft engines to
compare latest data with historical
5. Better informed employee data to anticipate potential problems.
6. Reduced Employee AdministrationMaintenance
cost costs have been
reduced by half.
7. Profile based application access through Portal
1-3 year 1. Move toward ticket less travel

2. Faster sales closure, lesser load on call center
3. Use of RFIP for better cargo tracking
4. Revenue Management system, improves identifies yield
improvement areas. More Profitability
5. Better scheduling and lesser flight delays
6. Improved customer retention
7. Reduced time in booking and size of queue
8. Flight schedule change sent to customer:- happy customer
9. Revenue through shopping at Airline Portal
10. Better fare management and Dynamic packaging of inventory
ROI-IT Empowered Enterprise
Time Period Benefit
3+ Year 1. Event driven responsive organization with focus on customer

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

Legacy Networks Mobile Demand Security
Silos-based Workers Mgmt. &
platforms Efficiencies Safety
SOA IP, Optical Wireless Advanced IT Security,

Networks Planning, Sensor
Scheduling Networks,
Surveillance
Airline Networks Need to Rely on Advanced
Communication Networks
Wireless Network Internet
Wireless Devices backbone
Back-end
Sensor
Key Goals:
Networks 1. Real-time monitoring of mobile assets and cargo
•RFID 2. Increased operational accuracy
3. Higher transport efficiencies
•Biometrics 4. VoIP, IP-based video surveillance to improve safety while
reducing communication costs
•Explosive 5. Enabling flexible deployments of new workforce applications
detection and customer services
•Etc…
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
Ground-Delay
Weather forecast
Flight schedule Happy

Flight Customer
Proactively System
Delay Fleet assignment Can Re-schedule Activities

Based on Expected situtaion
reduced/
Avoided Crew planning
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 Server Server

(check in- Medium (check in-
Slow
Counter) counter)
Queue
Slow
Before Using Intelligent

System to Bifurcate Passenger After Using
Intelligent
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
– Electronic tickets
• No paper handling or expense
• Encourages online ticket purchases
• Avoids travel agents
• Significant savings in cost
– Maintenance information system
• Logs all airplane parts and time cycles
• Reduces manual tracking costs
– Flight planning software
• Maximize seats occupied on a flight
• Reduced planning costs
JetBlue: A Success Story
(Cont.)
Massive Automation
– In-house software for tracking operational data
• Updated on a flight by flight basis
• Accessible by airline’s 2,800 employees
• Managers are able to respond immediately to problems
– Wireless devices for employees
• Report and respond to irregular events
• Quick response
• Events recorded for future analysis
– Training records stored electronically
• Easy to update
• Efficient retrieval
– 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.
“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
1. Innovation in Technology key to sustained profitability for airlines
2. Identifying, improving and Integrating business process using IT can create a true “Dynamic Business
Platform” to fuel the growth of Airlines
3. Airlines will continue to outsource non-critical operation for improve profitability
4. GDS may come under threat from GNE
5. Increasing distribution channel for ticket delivery, improved customer experience, customer
involvement is the key to success in Airline Business
6. Bigger Airlines are more at threat because of changing environment, then newly emerged LCC’s.
7. Airlines will Use RFID, Wireless network, hand held devices, Intelligent systems to maintain service
differentiation and gain customer loyalty.
8. Airlines are in a stage where they are evolving from transaction centric enterprises to customer
focused enterprise.
9. 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

*IATA only controls International flights

HUMAN Flight, route and

from Competitive Advantage: Creating and Sustaining Superior

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Compliance and Network Security

Finance System to provide the easy/configurable view of how airline is performing.

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

Compliance and Network Security

Agile Business Process and Demand Mgmt.

1. Asia-Pacific airlines spend an average of 2.0% of revenues on telecommunications and IT

1. European airlines spend an average of 1.9% of revenueson telecommunications and IT

1. North American airlines spend an average of 1.4% of revenues on telecommunications and IT

Continuous Demand-Driven Innovation

Growing demand, limited capacity & profit pressure

Study Of Airline Understanding

Airline Website Launch

Launching Basic Building Framework

Integrated Backend System` Customer Focused Application

Inventory Revenue Management

Integrated Back End System

Robust Delivery Network

1-3 year 1. Move toward ticket less travel

Time Period Benefit

3+ Year 1. Event driven responsive organization with focus on customer

Remove Improve Improve Advanced Improve

SOA IP, Optical Wireless Advanced IT Security,

Optimized Mobile Workforce efficiencies are

Flight schedule Happy

Delay Fleet assignment Can Re-schedule Activities

Other Factor Air-Delay

Queue Server Server

Before Using Intelligent

– Away from Tradition

Continental Airlines' Web Site Generates Record

HOUSTON, Aug. 11 -- Continental Airlines today announced

“We’ve made a significant investment in our web site’s

On one day in July, continental.com racked up $8.5 million in

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