New Delhi, June 19, 2008
“IT must deliver solutions to drive down costs, improve passenger convenience and provide enhanced possibilities to maximise revenues. The industry fuel crisis that has plunged airlines back into the red means achieving these goals is critical to survival,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA). Bisignani made his remarks in the opening keynote address at the SITA Air Transport IT Summit.
Bisignani cited the success of IATA’s Simplifying the Business programme. “This IT revolution is well on the way to saving airlines US$6.5 billion annually. On 1 June we delivered 100% e-ticketing. Alone, that will save US$3 billion. Now we must look ahead to respond to passenger demands for more self-service options throughout the travel process. IATA’s Fast Travel will deliver a second revolution with baggage self-tagging, automated document checks, self-boarding and kiosks to handle irregular operations and mishandled baggage reporting,” said Bisignani.
Bisignani then pointed to the need for progress in several key areas:
GDSs: “Our partners in the value chain must deliver similar efficiencies to airlines,” said Bisignani, referring to Global Distribution Systems (GDSs). We worked together in the e-ticketing project that helped airlines reduce sales and distribution costs by 25%. But there is still a need for more change. Why can China TravelSky charge US$0.50 per segment while the western GDSs charge over US$4? The industry is in crisis and they must come to the table with better efficiencies or we will use other ways to distribute products,” said Bisignani.
Security: Bisignani also challenged governments to deliver better results with IT to improve security. “The industry is much more secure than it was in 2001. But too often we get more hassle than value for the US$30 billion that airlines and their passengers have paid in the last seven years. The IATA-led Simplifying Passenger Travel project is a solution to make security more effective, efficient and convenient with IT solutions. Governments must rise to the challenge by focusing on risk management, using available technology effectively, taking better advantage of security intelligence, harmonising global standards and taking responsibility for the bill,” said Bisignani.
Air Traffic Management and Operations: “IATA’s commitment to improving the industry’s good environmental performance reduced fuel burn and saved 10.5 million tonnes of CO2 and US$2.1 billion in 2007. This was achieved by shortening 395 routes and spreading best practice in fuel management. We welcome the commitment of the Civil Air Navigation Services Organisation (CANSO) at their annual meeting to deliver even greater efficiencies. IT also has a role. Providers like SITA have an important role in ensuring that operational systems make the best use of improved routings. We could do much more if governments came on board. A Single European Sky in Europe and NextGen air traffic management in the US would deliver enormous performance gains—as would harmonising air traffic management requirements globally,” said Bisignani.
“Everything is changing with the high price of oil. With fuel accounting for 34% of industry costs, airlines are feeling the impact more than most. Cost savings are crucial in every corner of the business, but there is not much low hanging fruit left. Critical decisions on everything from aircraft allocation based on cost, capacity and demand to making best use of new labour opportunities are needed. Those with state-of-the-art route planning systems fed with the best available market data will have a clear advantage. In the uncharted waters of oil at US$135, two things are certain. The imperative is to deliver more for less. And effective IT is essential,” said Bisignani.
Link to the DG’s speech - www.iata.org/pressroom/speeches/2008-06-19-01
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