Air China
Working with SITA to drive down costs
September 2008
Growing operational costs - driven in particular by rising fuel charges - and joining the Star Alliance led Air China into discussions with SITA about how it could significantly reduce costs while improving IT services.
Air China
With a fleet of 224 aircraft carrying over 50 million passengers a year, and serving 123 destinations worldwide, Air China is the biggest airline in China, and was the Official Airline Partner of the 2008 Beijing Olympic Games.
The national flag carrier, with a history going back 20 years, has been consistently profitable every year since 2001, and the airline listed successfully in Hong Kong and London in 2004.
At the end of 2007, Air China joined the Star Alliance - the world's largest airline alliance - further expanding its service to passengers to some 900 destinations in 160 countries.
The business issue
Like every player in the air transport industry today, Air China has been facing growing operational costs, and in particular rapidly increasing fuel bills.
At the same time, as the airline expands its presence and raises its international profile - notably through joining the Star Alliance - Air China is keen to benefit from the best possible network communications solutions available, in order to keep costs down while still delivering first class service to its passengers.
"We need to make continuous steps forward towards our strategic goal of achieving leading competitiveness in the world," says Air China's IT General Manager, Zhu Song Yan, "continuously growing development impetus and steadily increasing profits - and SITA is a valuable partner in helping us make that happen."
SITA's solution
Already a valued SITA customer for over 15 years, Air China was keen to enhance its good relationship with SITA when it joined the Star Alliance at the end of 2007 - and to benefit from special pricing arrangements in place between SITA and the Star Alliance.
SITA therefore undertook a joint evaluation of Air China's global IP VPN network, looking at most of the airports with a direct connection to Beijing, as well as at the airline's
extensive network in Japan.
As a result, in an initial three-year deal, SITA is delivering an impressive 35% cost reduction for Air China on its existing IP VPN network costs, while continuing to offer an excellent level of service availability and efficiency.
At the same time, Air China renewed its contract with SITA for operational Type B messaging for a further five years at highly competitive rates, guaranteeing the carrier continued access to the world's most secure, reliable, and business-efficient messaging service.
"With Air China joining the Star Alliance, we've had a tremendous opportunity to reinforce and enhance our already excellent relationship with the national carrier, with management engagement and operational support taken to a whole new level," says Paul Dalton, SITA's regional vice-president for North Asia and Pacific region. "We're therefore now looking forward to exploring a whole range of new proposals with Air China - including end-to-end solutions from the LAN to the desktop.
"Indeed, our goals are right in line with Air China's," he continues. "By delivering cost savings right away, and cost reductions for future investment, we're helping Air China stay competitive at a difficult time for the air transport industry, and we're making every effort to put new technologies at the service of the bottom line."
"We're very pleased with the level and quality of service SITA offers," says Air China's Zhu Song Yan, "and particularly with SITA's responsiveness, its ability to understand exactly what we're looking for, and to offer innovative and cost-effective communications solutions."
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