Managing IT in a downturn

Airports and airlines are faced with the enormous challenge of lowering the cost of technology adoption and refresh while deploying Information and Communication Technologies (ICT) services that can support a maximum number of applications.

They can go about this in one of two ways.

Each airline and airport can deploy its own ICT infrastructure separately, with:

Duplicate and heterogeneous infrastructure
Increased cost and complexity of managing global Information Technology (IT) operation for airlines
Lack of de-facto standards inhibiting industry collaboration at airport

Airlines and airports can leverage concentration of air transport industry (ATI) operations, employees and travellers in airports, with:

A natural peering and aggregation point
Shared infrastructure components and services, to facilitate global roll-out of applications from airlines to airport from airport to airlines
Cost efficiency and economies of scale to the ATI
Sharing costs and benefits, potential new source of revenue

With the aftershocks of the global credit crunch rippling through international financial markets and into the world beyond, this is no time to be complacent.

Indeed, having turned a profit in 2007 for the first time in years, the airline industry is once again in the red, with a loss of some US$5.2 billion projected for 2008¹.

Finding innovative ways of managing IT in a downturn is therefore a top priority for everyone. There are two key areas of concern:

Reducing non-fuel unit costs – Since 2001, the industry has reduced non-fuel unit costs by 18%², but much more can be done through business process optimization, improved IT efficiencies, shared infrastructure and community initiatives.
Reducing fuel consumption– Since 2001, the industry has cut its fuel consumption by 19%³, but with fuel accounting for 36% of total costs in 2008, further measures must be considered, including route optimization, continuous descent approaches, smarter navigation and the move to more fuel-efficient next generation aircraft. The industry will need to invest in new technology, operate aircraft effectively and build and use efficient infrastructure.

SITA is working actively to achieve these goals – notably through our commitments to develop the next generation of integrated ICT infrastructure; create platforms to enable degrees of data integration which were previously not possible; and provide capabilities to support a wide range of automation initiatives already underway in respect of passenger, baggage, cargo and airport management.

We are the only player in the industry with a physical presence in almost all of the world’s airports, and with most of the world’s major airlines among our customers. Thus our strategy is driven by our ability to leverage investment in common-use infrastructure at airports or across the supply chain; enable simple mission-critical communication between all stakeholders; facilitate real-time, ‘single-source-of-truth’ to establish and ensure security and trust; alleviate the limitations of ‘any-to-many’ communications and enable collaboration; and act as a community hub / enabler across different sectors of the industry.

[1]Source: Speech by IATA CEO, Giovanni Bisignani, on 6 October 2008, available at: www.iata.org/pressroom/speeches/2008-10-06-01

[2]Source: Speech by IATA CEO, Giovanni Bisignani, on 6 October 2008, available at: www.iata.org/pressroom/speeches/2008-10-06-01

[3]Source: Speech by IATA CEO, Giovanni Bisignani, on 6 October 2008, available at: www.iata.org/pressroom/speeches/2008-10-06-01

Managing IT in a downturn

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