Airline Tech Vendors Heed Calls For Better Customer Connections

That IT's crucial role in the airline industry has evolved from the back-office transactional innovations of the 1960s and '70s to a more customer-centric focus is reflected by the steps vendors are taking to capitalize on that transition. They've gotten the message that the nation's struggling legacy carriers want to get better at connecting with their customers, getting information from them, and then using that information to strengthen passenger loyalty.

Perhaps no travel IT vendor has moved more decisively to address that trend than Amadeus Global Travel Distribution S.A., best known as a leading provider of distribution services and management tools to European airlines. Amadeus hopes to make serious inroads in the United States with its new Altea line of airline customer-management applications called Plan, Fly, and Sell. Together, the three apps--which run on a combination of Unix boxes and mainframes, and are all built around a real-time Oracle customer database--are designed to create a smoother passenger-management process by more tightly linking inventory, scheduling, distribution, booking, and airport operations.

British Airways and Qantas, which helped Amadeus built the Altea Plan inventory module, are the two biggest carriers committed to implementing the full suite. Qantas wrapped up the four-month migration of its inventory to Plan last fall, and expects to deploy Fly soon. The Sell module was the first to be deployed. Amadeus also has enough interest from unidentified U.S. carriers that it's planning to set up a data center here at the request of airlines who aren't comfortable with relying on the company's German data center.

Peter von Moltke, senior VP of Amadeus's airline business, says a complete passenger-management system is a crucial need--even though 90% of the industry's revenue comes from the 10% of customers who fly most often and pay the highest fares, airlines have a hard time distinguishing that 10% from the crowd. "They're finding it impossible to deliver the kind of customer experience that would differentiate them from the low-cost carrier," he says, adding that having a centralized customer database that provides a more consistent view of relationships with customers will help the airlines overcome data strategies that have resulted in disconnected customer information reservoirs used by various departments. "It's the good execution with the transparency and the up-sell that will help the legacy carriers increase the premium going forward."

The disjointed approaches to data management have hindered the airlines' efforts to improve the passenger experience, says Raul Arce, executive consultant for travel and transportation strategy at IBM. "Reservations aren't connected to passenger systems which aren't connected to the baggage system," says Arce. "You don't know if the customer had a good experience in the previous step in the process." That's why IBM has seen healthy demand among the airlines to help them with their data, systems integration, and more. Among the fresh perspectives it's been bringing to the industry is the idea of applying the concept of lean manufacturing to something as basic as how to load aircraft. "If something doesn't increase value or reduce the cycle time, than you shouldn't be doing it."

Amadeus' competitors also are rolling out technologies that, like the Altea suite, attempt to create a more cohesive passenger-management process. Sabre Holdings Corp., which runs the nation's dominant distribution system and also hosts reservations systems for a number of airlines, over the last couple of years has been rolling out a complement of applications that make up its SabreSonic passenger-management suite. In addition to a core suite of hosted apps that includes reservations, check-in, inventory-management, and configuration tools, Sabre has developed standalone apps for shopping, ticketing, revenue-management and online booking, all designed to be easily plugged into a service architecture. Last year, it added two tools to that lineup: a customer-relationship-management app for airlines and a reporting and reconciliation functionality within its ticketing app.

Sabre also has developed a new agent interface that it says provides a common real-time view of a passenger's experience to every airline employee who interacts with customers from behind a terminal. The idea is to ensure that employees know what the customer's experience has been up to the moment--whether that means being aware that a passenger just had to bail out from a problematic kiosk interaction or that her flight just arrived too late to make a connection.

Cendant Corp.'s airline solutions unit, meanwhile, is preparing to bring to market a new passenger services system built on an open services architecture that's designed to speed up the booking and check-in processes, as well as improve access to passenger information. Flo Lugli, senior VP of the unit, says the system promises, among other things, to let passengers check themselves in at a kiosk in as little as seven seconds. Cendant also has invested $60 million in a new faring system, called 360 Degree Fares, that lets airlines get new airfares into distribution channels in 30 minutes by automating the rules associated with fares, thus eliminating the need to enter codes manually. Lugli believes the business justification for investing in such tools is clear, but she also recognizes that airlines are more careful than ever about the IT capital investments they make.

"If you're wondering if you'll be surviving three quarters from now, it's difficult to get the business case through," she says. "It used to be the penalty for failure was smaller margins. Today, the penalty for failure is survival itself."

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