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IATA Champions Next-Gen IT Solutions For Aviation

by Ulrika Lomas, Tax-News.com, Brussels

02 July 2012


Speaking at the recent SITA Air Transport IT Summit, the Director General of the International Air Transport Association (IATA) highlighted projects being undertaken to modernize the information technology (IT) available to airlines, to bolster industry profitability and add value for customers.

Speaking of the importance of the partnership between the aviation industry and the IT sector, IATA Director General Tony Tyler said at the event:

“IT has changed aviation for the better. We could not deliver this enormous value at an ever expanding scale without the support of IT partners. Aviation today is a global mass transit system for nearly 3 billion people and 50 million tonnes of cargo.”

“We are expecting a razor thin consolidated industry margin of just 0.5%. Even that anaemic profitability faces downside risks of high oil prices and the European sovereign debt crisis. We will be counting on our IT partners to work with us on opportunities to generate revenues, cut costs and improve the bottom line."

“Change is not a zero-sum game. Alignment among stakeholders and partners has underpinned transformational changes such as the move to 100% e-ticketing. Everyone in the value chain - and our customers - benefitted,” Tyler said.

He told attendees of projects the Association is championing to improve IT solutions, in particular with regards distribution, decision support and operational efficiency.

On distribution, he noted: “While the computer reservation systems of the 1970s put aviation decades ahead of other consumer-facing industries, the Global Distribution System (GDS) model is now holding us back. New models, more retail-based, are facilitating customer-friendly interactions in almost every other consumer online activity. But the GDS model is too clunky to adapt easily to the emergence of trends such as fare unbundling and merchandizing.”

Against this background, Tyler announced that new plans are to be revealed at the World Passenger Symposium in October for a New Distribution Capability (NDC) to improve the transmission of flight price information, in particular to travel agents who account for 60% of ticket sales. According to IATA, the NDC is being designed with the aim of enabling better product differentiation, as well as customer identification and recognition. According to the proposals, the introduction of a NDC will bring airlines up-to-date with websites offering price comparison services, and enable airlines to publicize differences in their service.

Continuing, he went on to discuss the development of technology that can aid airlines in their decision-making processes, a key area for bringing industry costs down: “Every minute of every day airlines are faced with a multitude of operational and commercial decisions for which they rely on IT to help arrive at the correct answer. The evolution of origin and destination revenue management systems, for example, help airlines better manage the ups and downs of passenger demand. They enable airlines to maximize revenue opportunities in the good times and are a life saver when times are bad.”

“Perhaps surprisingly, given the value that is attached to it, we have not understood the importance of managing the information we have about customers’ travel patterns. Instead, we have allowed much of that information to reside with the middlemen distributors of our product who have made a healthy profit aggregating and selling back to airlines their own data,” said Tyler.

In late June, IATA launched the Direct Data Service (DDS) in partnership with North America-based Airline Reporting Corporation. DDS is a more powerful evolution of IATA’s PaxIS business intelligence tool. “DDS will bring fresh competition to the market for passenger data,” Tyler explained. According to IATA, DDS will provide a data solution that allows airlines to maintain control over their passenger data on a shared basis. Prior to the facility's development, some 72 of the 80 target airlines gave their support in principle to the project.

Lastly, Tyler said the Association is pushing forward the development of IT solutions to improve operational efficiency. Noting progress to date, Tyler told attendees: “E-ticketing, the flagship program of IATA’s Simplifying the Business (StB) initiative, was about far more than eliminating paper. It brought multiple benefits across the supply chain and greater convenience for passengers. On top of that, it enabled other changes such as bar-coded boarding passes, internet distribution and airport kiosks - all adding value to the travel experience while reducing costs."

'Fast Travel', developed under the StB initiative, consists of six self-service options: check-in, bags ready-to-go, document check, flight re-booking, self-boarding and bag recovery. “By 2020, our vision is for 80% of passengers to be able to be offered a complete self-service suite.”

“We are only at the beginning of the journey. We can send a boarding pass to a mobile phone, but passengers cannot access real time operational information on flight status, wait times or baggage delivery on any device in any location. Putting these pieces together is part of the next phase of StB,” said Tyler.

IATA is to release an updated version of the StB White Paper which will guide these and future developments at the World Passenger Symposium in October.

TAGS: aviation

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