Back to Air Transport IT Review - Issue 2, June 2011

Relieving the headache of global network management

How can airlines reduce the complexity of managing their global infrastructures, while making it more effective and future proof?

Airlines increasingly face the consequences of organic growth of their voice and data communication. In many cases, it results in complex, unmanaged interfaces and the existence of non-standard solutions. It also often produces major service overlaps with high support costs. Much of the cost of managing the resulting infrastructure is being taken from precious capital expenditure budgets rather than operational budgets.

Another issue has been how to handle the remaining legacy systems that are used across the industry. Many of these represent substantial prior investment, even though replacement is taking place and is accelerating.

One difficulty, however, is finding the staff with the technical skills to look after this legacy equipment but also staff who are able to support the introduction of new technologies. Indeed, whether for legacy equipment or for the very latest technology, technical skills shortage remains a major challenge across the community.

Forty to one

In 2009, Virgin Atlantic addressed this issue head on. Forty suppliers of data and voice communication services to more than 100 Virgin sites were reduced to one. Instead of the complexity of 40 sets of negotiations, SLAs, upgrades, new service rollouts, Virgin Atlantic now have to deal with just one set.

Known within Virgin Atlantic as Network Guardian, this new approach is being provided through a five-year agreement with SITA's Airline Infrastructure Management solution.

This marks a step change for the air transport industry. At its heart is simplified supplier management, faster deployment of services, improved reporting, reduced incident resolution times - and potentially substantial financial savings.

Remove complexity

The new Airline Infrastructure Management solution includes the standardization and simplification of the delivery of these services, driving cost savings and improved service levels.

When the Virgin Atlantic agreement was announced, Rob Watkins, SITA's Regional Vice President for Northern Europe, said: "We will be in a position to focus on the airline's overall business objectives rather than the delivery of any single, specific technology."

The focus on business objectives is central to the opportunity. It is not an outsourcing service by another name. There are no staff or asset transfers. But there is a tight focus on helping the airline to simplify its business model, transform its networking arrangements, and drive more sales to more passengers. SITA removes the headache of global network management by utilizing its own people, whose skills are derived from and focused entirely on the needs of air transport.

Transparent, optimized, future-proof

There are three core elements to the service:

A customized and transparent pricing scheme. IT costs can be managed in line with business requirements, with fees based on price per-passenger boarded. Pricing can also be defined according to a role-based utility, an all-inclusive remote office model or a model uniquely tailored to the business as a whole.
Optimized IT operations. Worldwide relationships and contracts currently managed by the airline will be transferred to SITA. The new contract will be backed by a real-time self-service management portal that includes customized dashboards, contract and invoice management and order processing.
A future-proofed infrastructure. Joint strategy reviews, transformation projects and innovation planning can be used to help the airline reap the benefits from new technology offerings, including cloud computing, desktop virtualization and voice-over-IP. Crucially, the service also offers economic flexibility in moving to new systems and technologies - airline expenditure shifts from Capex to Opex.

Perhaps most important of all is the fact that SITA's Airline Infrastructure Management solution offers a community approach. Airlines can trust that their voice and data communication are in the care of the only organization that is uniquely focused on air transport that was started by and is owned by the air transport community.

Key driver

According to the 2010 Airline IT Trends Survey, 59% of respondents cited reducing the cost of business operations as high priority. Other key drivers included renegotiating IT supplier contracts (48% high priority), rationalize IT suppliers (44%) and extending partnerships with strategic IT suppliers (52%).

The Virgin deal

The five-year, multi-million dollar partnership with Virgin Atlantic covers in excess of 100 sites worldwide. SITA now has full responsibility for services that include international and domestic IP VPN, voice (IPT and PBX), Managed LAN, cabling, core network support, Vendor Management Services and Service Management.

Matthew Billings, Head of IT Services, Virgin Atlantic Airways, said: "The financial savings are fundamental to our goal of driving down the overall cost base of delivery of IT to the business but as Head of IT I am also assured that our newly extended partnership with SITA will enable us to deliver other strategic initiatives including global supplier consolidation, service standardisation and improved Service Levels to our end users. Our company values are well aligned and our teams are closely integrated - we see the SITA team as a seamless extension of our own IT department."