As China’s leading international airline new entrant to the SkyTeam Alliance, China Eastern needs a global network that can support all of its staff, wherever they work.
Just as China is emerging as a leading actor on the world’s economic stage, its airport transport industry is increasingly becoming world-class. For instance, Beijing Airport has almost toppled Atlanta’s crown as the world’s busiest airport. According to industry regulator Civil Aviation Administration of China (CAAC), Chinese airlines are expected to report a 10% increase in passenger traffic this year to 320 million passengers, rising to 450 million passengers by 2015.
To support this growth, the Chinese government has encouraged the nation’s carriers to consolidate to boost their international competitiveness, by entering domestic and international cooperation and developing network hubs.
China Eastern is one of China’s big three, and with 16% of its passengers on international routes, it is the largest Chinese airline for international travel. It is benefiting from a significant increase in the number of international visitors to China, and the rising number of Chinese business and leisure travelers looking to fly overseas. The World Tourism Organization expects 100 million Chinese tourists to leave mainland China by 2020, making it the world’s largest tourist exporting country.
In 2011, China Eastern carried 69 million domestic and international passengers. It also completed a merger with Shanghai Airlines and joined the SkyTeam airline alliance in 2011, only the second Chinese airline to do so. With hubs at Shanghai’s Pudong International and Hongqiao International airports, and a fleet of over 330 aircraft and 35,000 staff, it is now the third largest airline in China by market value.
“Through our partnership with the SkyTeam Alliance, our goal is to increase the proportion of our revenue from international flights. It’s currently around 30% but we want to grow this to 50%, tapping into this growth in Chinese international travel,” says Kevin Cai, CIO, China Eastern. With many of its current flights running at full capacity, the airline is adding new flights and routes as fast as it can.
Growing the IT department to support the business
When Kevin Cai took on the role of CIO in October 2009, there were only 18 staff in China Eastern’s IT department. The number has since grown to 230 skilled IT professionals to support the airline’s ever-expanding international activities.
China Eastern recognized that IT was fundamental to supporting customer service during the airline’s growth phase. “The goal of the program is to transform our customer service from being product-centric to offering a customer-centric experience. It will impact 25,000 service staff and ultimately benefit 50 million passengers,” says Kevin Cai.
China Eastern’s rapid growth and ambition to joining a major airline alliance required them to reinforce and future proof their international IT infrastructure. To access corporate applications hosted at China Eastern’s data centers in Shanghai, workers at airports like Tokyo and Los Angeles were dependent on an Internet VPN - which is more open to security threats and network congestion.
“There was a risk that as we expanded, packet delays and latency could cause poor application response times for our end users which would then lead to a drop in productivity and a negative impact on customer satisfaction,” says Kevin Cai. “We wanted the remote sites to have a dedicated line so that congestion and security would not be an issue.”
A wide area network (WAN) with dedicated access lines would allow the airline to deploy new applications and improve the end-user experience. However, because the outstations did not have on-site IT support, the airline needed a partner to build the network and manage the customer-premises equipment.
A long-term relationship breeds trust and understanding
SITA and China Eastern have a long standing relationship starting in 1990 when the airline joined SITA. Today China Eastern sits on a number of SITA committees such as the customer advisory board and actively participates in the annual IT Summit.
“When we were looking for a long term relationship with a service provider that had a global footprint to match ours and could deliver in every location, we didn’t have to look far. We knew SITA well and they demonstrated they were right for the job,” says Kevin Cai.
In 2010, China Eastern signed a three year contract with SITA for a global IP-VPN to all the airline’s international sites. Thanks to SITA’s network and application performance solutions, business critical applications such as ticket distribution, reservations, air route management and customer care were performing at optimal levels, even at peak times.
Three-phase roll out
The plan for implementing the IP-VPN was divided into three phases. Phase 1 in 2010 started with Chicago, Hong Kong, Los Angeles, Paris, Seoul, Taipei, Tokyo and the company HQ in Shanghai. Phase 2 involved adding a further 16 international sites, which was completed by the end of 2011. A planned phase 3 could see around 60 sites around the world added to the IP network with a mix of IP-VPN and IPSec access.
The first phase of the project was implemented on time and on budget. IT users such as sales executives and cargo staff at international airports are experiencing much improved application performance. They can now securely access the dozen or so business critical applications such as fare and cargo systems that are hosted in China Eastern’s data centers in Shanghai.
Following the successful implementation of the IP-VPN and network optimization, China Eastern recently piloted IP telephony in its Hong Kong office. If the model works well and proves to cut down China Eastern’s international communication costs, it plans to rollout IP telephony to its Tokyo, Los Angeles and Paris locations.
Understanding how applications works on the network
As part of the managed network service, SITA provides an analysis of network traffic. By analyzing application performance, it can identify bandwidth-hungry applications that can tolerate higher latencies and those that require very little latency. With this profiling, bottlenecks in the network can be targeted for additional capacity, while under-utilized connections can be scaled back. A network optimized for the applications it carries brings significant cost savings while the higher bandwidth allows agents to use a wider range of airline business applications.
“This new investment is best enabled by a single network provider like SITA. It will lay the groundwork to build a state-of-the-art infrastructure over a secure communications network. It’s a comprehensive solution designed to meet the increasing complexity of application performance. The ultimate beneficiaries will be our passengers as we improve the quality and availability of our services,” says Kevin Cai.
The benefits of a managed global data network
China Eastern now has a global network that can grow with it. No longer hampered by having to access corporate applications over the Internet, global locations now have a consistent and secure means of accessing corporate applications with guaranteed performance. And when the airline wants to add a new route, or upgrade an outstation, SITA can rapidly provision network access and manage the customer premises equipment at any airport in the world.
This fully managed solution helps China Eastern’s IT department focus on strategic projects such as business process re-engineering, and creates an enterprise IT environment that allows any application to be accessible from any terminal, anytime, anyplace, anywhere.
But perhaps the most significant benefits from implementing managed SITA network and application performance solutions have been enjoyed by end users. They can now securely access the same business critical applications that are used by colleagues in mainland China with the same level of speed and performance. They are no longer impeded by slow application response times and screen time-out. Now, with applications performing as they should, both productivity and staff satisfaction has improved significantly.
“The global program has triggered a major transformation inside China Eastern requiring modifications and upgrades to many systems and close collaboration from many vendors which is made possible thanks to the vital role of our new-born IT department and close collaboration with SITA,” says Kevin Cai.