Air Malta
Outsourcing for competitive edge
October 2008
Twenty-two-year-old Air Malta is the flagship passenger carrier of Malta. The airline's 14 aircraft transport passengers between approximately 55 destinations in the Eastern
Hemisphere. In addition, the company owns several tourism subsidiaries, a private insurance company and a cargo operation.
Business drivers/challenges
Air Malta's legacy systems were under performing, straining IT resources and causing service ripples across the entire company. Issues stemming from network and system gaps required the IT staff to concentrate on fixes, rather than advancing the company. Ultimately, Air Malta's technology infrastructure was taking attention away from its core business and costing the company its competitive edge.
A prominent board member noted the issues and requested management's attention. However, before any work could be done, Air Malta was required to issue a public RFP, a regulation set forth as part of European Union membership. Several companies submitted proposals, however Air Malta chose SITA, noting key tipping points such as the company's 55 years of dedicated airline experience and technical expertise. Maltese vendor relationships and the team's existing relationship with Air Malta's IT staff.
Solution
The first order of business was conducting a feasibility study to assess issues, determine the cost involved in servicing the existing IT infrastructure and uncover areas of
potential cost savings. Of the 15 IT functions analyzed, SITA engaged strategic partner INS to handle six.
The study confirmed the team's suspicions - service levels were low because the technology was outdated and needed to be refreshed to meet modern customer demands. In preparing to present the findings to Air Malta senior management, it became clear that the most efficient solution would be three-fold: converge data and voice technologies, revamp the call centre and outsource the entire IT function. The team conceded that asking a client to hand over its entire department was risky, but they had,
over the years, built up a bank of trust with Air Malta and believed it would consider the recommendation.
Also as a display of dedication and credibility, the SITA team included in the Air Malta contract 16 business metrics, such as specific CRM service levels, against which SITA will be evaluated.
Seeing the benefits that could be gained Air Malta's senior management agreed to allow SITA to take over its IT function so that employees could focus on their core business - transporting passengers.
From a business management perspective, SITA offered Air Malta a single-contractor organization, a hardware refreshment program and redundant infrastructure.
Technically, SITA is providing on-site deployment of more than 800 IP phones and 90 wireless phones. This deployment, along with a campus network infrastructure upgrade, are resulting in central management and control, voice interconnectivity between home sites and outstations, better call pricing, and near 100 percent system availability.
The call centre is independent of the call recipient location, allowing for a virtually worldwide presence. In addition, callers now have an interactive voice response option. The
system can also provide overflow routing to minimise or better eliminate missed calls that could materialise into seat bookings.
To support the voice traffic and improve applications performance SITA is also upgrading the throughput speed - from 48kbps to 128 kbps - for IP connectivity in Malta. The
upgrade will support access to six SITA private networks, including access to all SITA airline operations, SABRE, Worldspan and other networks such as the Air Transport
eXchange extranet.
SITA team members in the initial phase are proactively analysing the system, identifying areas of immediate concern and anticipating future issues. SITA is also engaged in local vendor procurement and management.
Once this phase is complete, the next twelve months will be spent transforming the system to a robust infrastructure.
"In proposing a complete overhaul and outsourcing solution, SITA helped position Air Malta to harness the power of technology, rather than be overwhelmed by it," said Eraldo Baluci, Vice President Southern Europe, SITA. "With IT successfully handled by SITA, the company is free to turn its full attention to successful passenger service, which will be further enhanced as we upgrade the IT infrastructure."
Business results
Just two months into an 18-month project, Air Malta has already seen ROI in the form of a new revenue stream. The new call centre is so successful that the company is now
offering it to others.
In addition, the SITA team estimates that Air Malta will realize 10 percent savings in year one, followed by 2 percent annual savings each year thereafter.
"This deal is a win-win situation for us as we will cut costs while gaining significantly better systems," said Air Malta Board Member Joe Fenech Conti.
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