How long-term partners collaborated on a major turnaround
India is the world’s fastest-growing economy and is forecast to become the third largest over the next two decades.
International and domestic passenger growth is averaging 12% annually, reaching a combined 184.2 million in financial year 2015-16. Some projections expect passenger numbers to reach 450 million by 2023.
Founded in 1932, Air India is the flag carrier of India and the country’s third largest airline in terms of passengers carried. Its history is synonymous with the history of civil aviation in India, and the infrastructure it has created over the years is testimony to its contribution. Headquartered in New Delhi with its main hub at Indira Gandhi International Airport, Air India serves 52 domestic cities and is a mega international airline as well – with destinations across the USA, Europe, Australia, the Far East and Southeast Asia, and the Gulf.
SITA has had a strong local presence in India with over six decades of experience working collaboratively at the heart of Indian aviation. SITA’s pan-India footprint is based on longstanding, strong relationships with customers. It includes 38 airports run by the Airports Authority of India (AAI),
Mumbai, Bangalore and Cochin International Airports and the airlines AirAsia India, Air Costa, Air India, GoAir, IndiGo, Jet Airways, SpiceJet and Vistara as well as ground handlers, government agencies and policy makers.
Through a partnership of more than 60 years, SITA and Air India have worked together to add value and create growth. Leveraging this close collaboration, SITA has contributed to the turnaround of the national carrier with a suite of solutions resulting in numerous technical benefits and its subsequent to the prominent role IT played at Air India, the airline is able to meet the Star Alliance’s exacting global standards.
Not long ago, Air India met with obstacles on many fronts at a time when Indian air transportation was being reshaped. Liberalization, foreign investment, changing airline business models and the formation of global alliances – all impacted international and domestic markets. It faced a particularly challenging period after its 2007 announcement on the merger with Indian Airlines, including financial losses, increasing competition and difficulties in joining the Star Alliance.
With some of its routes unprofitable, Air India adopted a turnaround plan in 2010. A critical foundation of the plan was the complex migration of the Air India IT platform to a new Passenger Service System (PSS), while merging and simplifying business processes between the two carriers.
The migration was meant to serve as a significant milestone towards Air India’s modernization and also was a key imperative for its smooth entry into the Star Alliance.
The Horizon® PSS is at the commercial heart of Air India and is critically necessary to support the company’s business objectives. SITA’s PSS provides the carrier with a comprehensive suite of modules that lets them adapt to change and cope with the demands of high-volume, multi- channel sales and servicing.
The Air India portfolio features these Horizon PSS modules and services:
- Core systems: Reservations, inventory, pricing, ticketing, and departure control provide the critical functionality to enable booking and passenger processing
- e-Commerce: Enables online travel booking and payment with calendar shopping integrated to offer additional service options. A growing percentage of Air India’s passengers are now booking online, which helps strengthen their distribution model. The addition of iTravel® further enables them to keep the more expensive third-party channels in check.
- Horizon® Loyalty: This key component of the airline’s alliance strategy is integrated with its website and call center interface. It enables agents to recognize and reward loyal customers as well as integrate with other alliance member systems.
- Horizon® Revenue Integrity: Prevents revenue leakage due to no-show passengers and late cancellations by constantly monitoring, identifying and eliminating bad bookings in real-time, providing new revenue opportunities and reducing costs.
- Business Intelligence: A unique offering, this service enables the airline to extract detailed data from across its passenger systems to track trends and key business metrics such as revenue and operational performance.
- iTravel®: Provides Air India with the country’s leading travel application aimed at meeting the exponential growth in the Indian mobile internet users users and in line with the vision of Digital India of Government of India. iTravel offers an elevated mobile experience where passengers can easily manage every step of their journey on their phone or tablet with ease no matter where they are.
SITA’s passenger processing management capabilities provide Air India customers with continuous access to advance flight information, booking and ticketing. Its merchandising capabilities will further increase the airline’s ancillary revenue-generating opportunities, maximize its wallet share and yield, reduce costs and improve efficiency.
Moreover, SITA has been providing Air India with bundled mission-critical solutions for more than 50 years including network connectivity at all domestic and international stations, desktop infrastructure solutions for check-in, air-to-ground communications, fares management and baggage tracing.
In addition, SITA’s dedicated support resources work with Air India team of committed professionals to ensure the airline’s success. SITA’s experts bring in-depth knowledge of the ATI and an understanding of Air India’s exceptional business needs, working in partnership to help the airline grow through its challenges.
Since adopting its turnaround plan in 2010, Air India has followed a steady path to profitable growth. Its passenger numbers have been on the rise – from 12.5 million in 2012 to 18.5 million in 2015. The company announced an operational profit of INR 100 Crores (USD 15 Mn) in the financial year 2015-16 and is projecting a return to cash profitability in 2018 well ahead of the original target set in the turnaround plan.
Following the flawless migration in 2011 of the Air India and Indian Airlines IT platforms to the Horizon PSS, Air India became a Star Alliance member in 2014. By upgrading processes to match those of existing Star Alliance members, the Horizon PSS enabled Air India to meet alliance standards and airline member expectations. As the first Indian airline to join a global alliance, Air India’s membership opened the door to increased business opportunities.
Alliance membership offers passengers a seamless travel experience across its global network, premium customer recognition and other benefits. Alliance passengers can earn and burn more frequent flyer mileage points, with code sharing leading to a wider choice of flights and access to over 1,000 lounges. Star Alliance’s 28 members offer a network of 18,500 daily flights to 1,300 airports in 192 countries.
Additional revenues generated as result of Star Alliance membership are estimated at US$3.4 million outbound and US$2.9 million inbound. In 2015 alone, the Star Alliance brought over 152,000 passengers to Air India.
At an event ‘Air India Day’ in August 2014, focused on major milestones accomplished throughout Air India’s transformation program, Minister of Civil Aviation bestowed SITA with an Excellence Award in recognition of SITA’s close partnership with Air India, as well as SITA’s contribution to the airline’s transformation – specifically Air India’s Star Alliance entry.
Maneesh Jaikrishna, Vice President, India and Subcontinent, said: “We pay close attention to customers such as Air India, understanding their specific challenges and future business needs. We work closely together to define and deploy suitable solutions while providing strong local support and management to refine business processes and strategies for success.
Every customer is different and we do not offer a one size fits all solution – this has been the key to our success with Air India. We will continue to work closely to further remove costs with strong solutions from across the SITA portfolio. SITA’s ongoing investment will support Air India’s requirements for increased operational efficiency, enhanced customer service and increased revenues.”