Business Making Progress

The Travel Technology Revolution and What It Means For You

By Joshua Norrid, Industry VP, Travel and Leisure, Progress Software

It was a pleasure to attend the SITA Air Transport IT Summit in Brussels and to see more than 300 delegates taking part in a lively, energetic discussion on a wide range of issues affecting the Travel and Leisure industry. Interestingly, of all the topics of conversation we saw during the two-day summit, the one that delegates kept coming back to was the extent to which technology was helping to bring them closer to their customers. But how prevalent is the travel technology revolution in the airline industry – and can it really add value?

It’s clear that the industry today finds itself is in a period of significant transition. With more congestion on the ground, and more complicated systems and processes in place, there’s an increased likelihood of things going wrong, meaning that for many, irregular operations are increasingly becoming the new standard. As a result, more organizations are turning to technology to help them predict these irregularities, manage contingencies and add value to their customers.

It’s also worth bearing in mind that today’s customers are very different to those we saw five or ten years ago. Advances in consumer technology in recent years mean that we’ve seen sweeping changes in customer behaviour during the same period, which brings its own set of challenges. Today’s passengers are a new breed of technology-savvy consumer who are ready, willing and able to tell people what is happening at all stages of their journey, using their smartphone or other mobile devices – particularly if they feel something is going wrong.

This, in turn, means that airlines must work even harder to connect the dots for their customers, with many turning to complex event processing (CEP) software which allows them to keep track of everything from reservations to the status of baggage as they strive to be truly responsive to the needs of their passengers.

Another key theme at the summit was the willingness to embrace cloud computing as a solution. In the past, concerns over the feasibility of cloud solutions have dominated, but this year was different. Indeed, most of the people I spoke to seemed to agree that by owning 100% of their assets, they had been missing a significant number of opportunities. As a result of coming to this conclusion, many had been entering into serious discussions around investing in cloud solutions, with some building the infrastructure required to deliver reservation and departure information as well as enhanced customer service across this platform.

Of course, while concerns remain about speed and security of cloud services, it’s perhaps too much of a stretch to argue that widespread adoption of this technology is imminent.  But what is clear is the extent to which the industry is waking up to the fact that cloud and other technologies can benefit and enable their customers.

In the twenty-first century, the technology-enabled customer is king, and those in the industry are having to work harder than ever to give them the information they need, and to provide solutions which will increase the overall quality of service.  The role that technology can play in bridging this gap should not be overestimated – isn’t it time you asked how prepared your organization is for the technological revolution?

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How Software Can Help Airlines to Keep All Their Plates Spinning

By Joshua Norrid, Industry VP, Travel and Leisure, Progress Software

I often think that managing an airline in today’s climate can be a bit like trying to keep several plates spinning at once – one mistake, and all your hard work can result in a costly, embarrassing mess. Over the last 12 months, we’ve heard a great deal from airlines which are finding themselves having to make some difficult decisions about how they approach the road ahead. Increased costs across the board have seen airlines of all shapes and sizes slashing their budgets as they look for the best way to cut costs without reducing overall efficiency.

The situation has now become so drastic that traditional industry growth has been put on hold by the majority of airlines, which are instead looking for ways to keep their heads above water by releasing funds from areas such as maintenance and distribution. So what are the causes of these increased costs? As we begin to emerge from the shadow of the global economic downturn, why are so many airlines finding it necessary to tighten their belts?

Clearly, there are a number of conflicting economic and political factors driving this need. Perhaps the most significant of these is that the cost of fuel has rocketed to as much as $100 a barrel, and as much as 31 per cent year-on-year in some territories. This price increase has had an obvious knock-on effect for the airlines industry, many of which have been faced with a straight choice between passing this increase onto their customers or trimming overheads.

Other factors, including an increase in political hotspots around the globe, are reducing the number of flights leaving each day - adding to the pressure. Either way, it’s becoming increasingly clear that airlines are facing an uphill struggle, as they fight tooth and nail to hold on to market share, while trying to ensure that customer satisfaction is not affected by their drive to reduce overall operational costs.

Perhaps this is where software developers can play a part? By allowing airlines to view business-critical information in real time, complex event processing software can help to establish which areas require greater resources, and which can be trimmed as and when circumstances dictate. This will allow them to view the performance of their entire operation in real time, and make better, more informed decisions. This software could be one way for them to avoid making potentially costly mistakes – and keep all of their plates spinning!

Why Streamlined IT Processes are the Key to Growth

By Joshua Norrid, Industry VP, Travel and Leisure, Progress Software

According to recent figures released by the International Air Transport Association (IATA), industry profit forecasts so far for 2011 will drop 54% from $8.6 billion to $4 billion, with the recent spike in jet-fuel prices being cited as the key reason.

If the IATA’s recent profitability forecast has shown us anything, considerable changes need to be made if the current slide in profitability is to be reversed. The international trade body also suggested that we could see a drop in year-on-year profitability of as much as 78% in 2011, underlining the fact that the need to cut operational expenses across the industry has never been more pressing.  Of course, there are several ways to achieve this, and we’re already seeing the airlines industry looking to slash maintenance budgets and reduce distribution coasts.

The problem is that a variety of global pressures are driving this need to cut costs, which, in turn, means that growth can be difficult to achieve.  Certainly, low-cost airlines seem to have an advantage in this respect, as their comparative size makes it easier to undercut their larger rivals in terms of price; but it’s also true that they find it easier to drive growth by forming strategic alliances, which allow them to broaden their offering.

Alliances in the industry are not a new concept, and it’s become commonplace to see an extended travel itinerary containing two or three different carriers. However, what’s less well known is that in order for these alliances to work, IT systems owned by the operators must be integrated to allow them to share all relevant information, such as reservation details or baggage retrieval. The trouble is that many of the larger airlines have large, complicated legacy IT infrastructures, which can take years to integrate into other processes.

Low-cost airlines, on the other hand, tend to have more streamlined processes, which makes it easier for them to manage data and integrate systems which means growth is much more achievable.

It seems clear to me that, in the coming years, we’ll see more established players turning to more responsive software which can work alongside existing processes to drive down the time it takes to integrate processes. Clearly, the lesson for major airlines is that simplified, uncomplicated IT processes can open the doorway to growth – and help them to remain competitive.