Harnessing the digital revolution

“At this stage of the merger,” he says, “We have a single operating certificate and have rebranded some 250 airports worldwide. There is common livery on almost all of the fleet, a unified employee group, a single network marketing presence, and we have delivered about $1billion per year in ongoing savings [merger synergies] out of a target of $2 billion through the merger.”

In terms of IT, Fredericks says the project was divided into more than 3,400 individual milestones that had to be met over a two-year merger plan. That broke down into 269 implementations and six major events, of which the carrier is about 85 percent through currently.

The standard portfolio approach wasn’t working, relates Fredericks. Delta created a centralized IT organization and portfolios that liaisoned with individual business groups.

“That portfolio approach wasn’t enough to get us where we needed to go,” he says. “What we found was we had to have cross-functional teams — this was a huge success to our merger. Instead of focusing on the individual applications and business requirements, we focused on the six major events.

“We’ve created enterprise working groups that go across natural airline processes. Senior business executives and IT leaders come together to strategize and prioritize projects across divisions,” which helps facilitate a service-oriented approach to how IT is done, explains Fredericks.

Going forward, the goal is to pursue standard solutions and commodity products wherever possible; adapt business processes to products versus vice versa; and to leverage consumer technology to be cutting edge [think iPad kiosks, etc.], he relates.

The IT revolution and the digital traveler

BA’s Paul Coby, responsible for technology, property, financial shared services, and continuous improvement across the airline, says IT has revolutionized the air transport industry over the past decade.

“We are the most online industry there is; more than 65 percent of travel is booked online today — online is now the mainline for our customers,” remarks Coby.

“What will air transport look like in 2020? We figure seven billion passengers will pass through our airports each year; 15,000 aircraft will fly the skies; and we will have 1.56 billion arrivals as international tourism burgeons — a 77 percent increase over today.”

Coby also predicts a 23-fold increase in mobile, voice, and data traffic, and some five billion Internet users (compared to approximately 2 billion now); and every traveler will have a digital identity. He makes what he calls ‘four C-bets” for the next decade:

Cloud computing — “We are moving into the cloud now,” says Coby. “New computing architecture will be massively scaleable, virtualized, and massively cheaper, supporting a vast number of IT-enabled applications.”

Consumerization — Or what Coby describes as: everyone connected, anywhere, anytime, with everything. He comments, “Customers expect airlines to contact them in disruption with a solution already identified; and our workforce will expect new tools to do their jobs ... they will want the capability to work on an aircraft with the actual manual on a heads-up display or next to them on digital devices.”

Convergence — Where the Internet of things meets the Internet of mobility, relates Coby. Three pieces of technology are at last coming together, he says. “One, the measurement and interconnection of everything [there will be one trillion Internet connected devices next year]; two, application-rich and location aware mobile devices; and three, web-based services.

“This will enable step-changes in efficiency ... knowing where everything is and having the ability to access it allows the capability to take information out of the silos and putting it together to optimize operational processes and identify problems before they occur.

Consolidation — Or the growth of IT super-giants. Increasingly, says Coby, IT and air transport looks rather different. “Other industries are dominated by the super-giants of IT such as IBM, HP, Microsoft, SAP, Oracle, and Cisco; giants are becoming virtually integrated.

“The opportunity for the air transport industry is to use partners like SITA to keep control of our own destiny, and to keep the ability to deal with our own customers. Why should ATI work together on IT?