Back to Air Transport IT Review - Issue 1, May 2010

Passenger Management - the next generation

Passenger management - the next generation

For years, many airlines have been hampered by legacy passenger and fares management systems that were built before the advent of the Internet. But with continued investment and development, the next generation Horizon Passenger Management portfolio is increasingly seen as the credible alternative for the industry.

Talking to Michael Mitchell, VP Software Development for SITA’s Next Generation Horizon, it’s clear that 2010 represents a major milestone for the programme, as the work of teams of software developers comes to fruition.

“For over two years now − on the back SITA’s ’mega-million’ dollar investment in Horizon − we have undertaken in the region of 70,000 hours of development work,” he says.

“During 2010, this work will culminate in the delivery of a new wave of next generation functionalities for airlines. It’s an important year not just for the 400 or so SITA people working on this ‘nextgen’ programme, but also for the many customers who will benefit from our developments.” (See box below.)

Encompassing reservations, inventory, ticketing, departure control, self-service booking and customer service technologies, the Horizon portfolio includes Web, kiosk and mobile applications, integration platform, revenue management tools and a full range of fares management, distribution, pricing and shopping solutions.

Gathering pace - next generation passenger management

Malaysia Airlines

Horizon has been critical to the Business Turnaround Plan of Malaysia Airlines, a major transformational programme that the airline embarked on in the latter part of last decade. A major milestone was reached when Malaysia Airlines switched to SITA Reservation in late 2009, setting a new benchmark for delivering a complex project with minimal disruption. The operation took just 13 hours and involved the successful transfer of almost 1.5 million passenger records (www.sita.aero/pressreleases).

Czech migration

A major milestone was reached by Czech Airlines with the successful migration of the airline's ticketing processes to SITA e-ticketing. The airline has also moved to a full Origin and Destination based inventory and revenue management model, by linking the SITA Inventory system with PROS revenue management solution.

The e-ticketing implementation, which includes the ability to issue e-tickets for interline travel with 59 carriers, including members of the SkyTeam Alliance, was completed with the migration of the airline's 814,000 ticket database, completed with minimal downtime.

In a related project, SITA Departure Control Services have now been implemented in a number of pilot cities across the Czech Republic, Georgia, Uzbekistan, Kazakhstan and the Ukraine.
As part of the project, Czech can check-in passengers with interline e-tickets and interline through check-in has been enabled with Air France, Delta and other SkyTeam members.

Indonesia's growth

Ahead of major network expansion, Indonesia's third largest private carrier, Sriwijaya Air, has migrated to SITA's Horizon passenger management and distribution platform. The transition took place with no disruption to the airline's six million passengers.

As part of a five-year, US $9.5m contract in support of an expected 20% growth in passenger numbers, the airline is implementing several Horizon services including SITA Reservations, Inventory and Distribution as well as SITA Ticketing, Departure Control Services and Passenger Revenue Accounting.

In 2009, Sriwijaya Air expects to carry more than six million passengers to a total of 33 domestic and international destinations and in 2010 hopes to add new aircraft to launch services to Bangkok, Guangzhou, Kuala Lumpur and Perth.

Air India - focused on transformation

One of the most recent Horizon successes is the announcement by the National Aviation Company of India (NACIL) that SITA will provide its Horizon Passenger Services System (PSS) to Air India on a turnkey basis. Following a global competitive tendering process, the contract with the 13.5 million passenger airline is valued at $190 million over ten years.

The system will deliver a single airline code to allow the seamless integration of the former domestic carrier Indian Airlines with Air India, for the first time since they merged in 2007. Another early deliverable will be enabling Air India to meet the requirements for joining the Star Alliance.

In addition to the core Horizon PSS suite, SITA will also implement an efficient online booking engine, departure control system, check-in and automated boarding control, baggage reconciliation system (BRS) and a frequent flyer programme.

Arvind Jadhav, NACIL Chairman and Managing Director, said that through the implementation of Horizon "Air India will then be able to leverage the complementary strengths and synergies of the single new carrier to the maximum, resulting in a more competitive, customer friendly and world class airline with significant improvement in our passenger yields.

"This will be achieved through maximum flexibility in our "Go to Market" strategy and provision of an easy-to-use booking engine by SITA which will provide us full control over our own ticket distribution and drastically reduce our distribution costs."

Building on innovation

“Significant steps have already been taken to migrate to the next generation,” adds Mitchell. “Already, in the first wave we’ve delivered innovations such as Marketplace-Air and Customer Journey.”

Marketplace-Air offers real-time, last seat availability and seat maps on other carriers and enables seamless advance seat reservations of other airline segments, while Customer Journey is a migration from legacy PNR to a business intelligent ‘live’ record of the passenger's experience. “This is a first in the industry for SITA,” says Mitchell.

“The 2010 programme builds on this innovation, as our project development teams get set to deliver a wave of major market releases,” he adds. These include next generation developments for Airfare Distribution, Loyalty and Total Fares Management (see box), Weight and Balance, Inventory for Origin & Destination (O&D), state-of-the-art interfaces for sales and service agents, and a full mobile suite.

As a result of its 15-year partnership with Oracle, announced early in 2009, SITA is building capabilities such as these on Oracle's industry-leading middleware, with its Service Oriented Architecture bringing reusability, flexibility and agility to airline users.

Another partnership – with leading customer loyalty specialist LoyaltyPlus – will provide airlines of all sizes with the ability to offer a frequent flyer programme.

Industry choice

So what makes the next generation passenger management portfolio relevant to the industry when other options are also out there? For Mitchell, the development of Horizon is as much about representing industry requirements as it is delivering leading capabilities.

“The importance of the Horizon next generation passenger management programme lies in the industry’s need for a strong alternative,” he notes. “One that actually responds directly to airline needs, no matter what type of airline.”

All airlines demand increased functionality, multi-channel distribution management, improved customer service and government or industry compliance. . But the next generation of passenger management and fares systems must also be easy to bring on board as well as being future proof – extending the life and functionality of in-house IT infrastructure.

“In developing next generation passenger management, SITA is representing a balanced and broad spread of airlines – not dominated by any particular major group – within an airline community that is GDS-independent,” concludes Mitchell.

“Given the steady stream of customer successes (see box below), we are clearly matching up to the community’s requirements – with outsourced solutions that provide comprehensive functionality, flexibility and shared investment in common requirements.”

It's all in the fare

Changes in technology and the many channels available to deliver price to market have massively complicated the end-to-end fares process. A lack of integration between fares management and distribution systems with other commercial processes - such as revenue management and revenue accounting - has made matters worse.

Total Fares Management (TFM)

TFM embraces all of the functions that an airline must perform to get a fare into the marketplace. It includes competitive fares monitoring, competitive responses, decision-making and approval, automatic filing of fares and separate rule coding, distribution of fares and rules to the market.

Airlines often need to go to many providers to get a complete TFM, but as part of Horizon, SITA has launched a Total Fares Management solution which can manage the whole process in a single application.

Competitive alternative to ATPCO

Total Fares Management consists of Airfare Insight, for fares management and decision support, as well as Airfare Distribution, providing a lower cost option for airlines that need to distribute to GDSs. To this end, SITA now provides a competitive alternative to ATPCO.