Information Management CSC2204

June 21, 2013[Information Management CSC2204]

Contents1.0Introduction32.0Background of Airline Industry43.0Technologies of Airline Industry and Their Usage53.1 Air Asia53.1.1 Internet technology53.1.2 Yield Management System (YMS)63.1.3 Computer Reservation System (CRS)63.1.4 Enterprise Resource Planning System (ERP)73.2 Air Canada73.2.1 Electronic Boarding Pass73.2.2 Self-Service Bag Tagging83.3 SITA83.3.1 In-Flight Entertainment (IFE)83.4 Orbitz Worldwide93.5 SAM (System Aircraft Management)93.6 Your Assistance Delivered Anywhere (YADA)103.7 Cockpit Computing Technology103.8 Global Positioning System104.0 Importance of technologies115.0 Challenges for Airline125.1 What Are Some of The Challenges That Both Airlines and Airports Could Face?125.1.1 Improving Efficiency125.1.2 Security125.1.3 In-flight Connectivity125.1.4 Safety In The Air135.1.5 New Fuels135.1.6 Going Green135.1.7 Innovative Plane Design135.1.8 Consumer Demands and The Willingness To Pay145.1.9 Bringing Airports and Airlines Into The 21st Century145.1.10 Finding Staff146.0 Issues That Faced By Airline Industry146.1 No National Air Transportation Policy146.2 Airline Over-Scheduling156.3 Broken Industry Workforce Model156.4 Obsolete Air Traffic Control Technology166.5 Airline Industry Financial Failure167.0 Comparison Between Technologies of Difference Airlines168.0 What Will Happen If Airlines Industry Not Using Any Technologies?179.0 Conclusion1810.0 References19

1.0 Introduction

Information Technologies have brought about significant improvements in Business operations and in the entire human life as whole. Talking about globalization, information technologies has brought the world closer together. This means that we not only share information quickly and efficiently, but we can also bring down barriers of language and geographic boundaries. [By Martin Nana Baffoe Pieterson, 7 October 2009] Information technologies have also made it possible for businesses to operate for 24 hours all over the globe. This means that a business can be form at anytime and anywhere, which making purchases from different countries easier and more convenient. Airlines focus on cost reductions in driving to operations that are more efficient. However many airlines are turning to customer relationship management (CRM) as a tool for managing customer relationships. Unfortunately, in many cases, they have failed to recognize CRM as a holistic strategy, instead viewing it as synonymous with their frequent flyer programs. As airlines struggle to gain market, share and sustain profitability in today's fiercely competitive and economically demanding environment, they must develop new ways to manage their customer relationships to optimize customer loyalty and revenues. Over the last years, individuals and organizations all over the world have invested significantly in information technologies and systems. It is widely believed that strategic information technology (IT) investments will enable firms to cut costs and working effectively.

2.0 Background of Airline Industry

On 17 December 1903, Orville and Wilbur Wright capped four years of relentless research and created the first powered flight in a heavier-than-air machine. The first person to fly as a passenger was Leon Delagrange, who rode with French pilot Henri Farman from a meadow outside of Paris in 1908. Airline industry provides air transport services for traveling passengers and freight, typically by airplanes. DELAG (Deutsche Luftschiffahrts-Aktiengesellschaft) was the world's first airline. It was founded on 16 November 1909 with government assistance, and operated airships manufactured by The Zeppelin Corporation which the headquarters were in Frankfurt. [The Aviators' Journal, 30 April 2013] The airline industry is a large and growing industry. It facilitates economic growth, world trade, international investment and tourism. In 1941, Philippine Airlines, formerly one of the largest Asian airlines was founded and is the first and oldest commercial airline in Asia operating under its original name. Malaysia Airlines System Berhad which known as MAS is Malaysias full service national carrier that first took the skies in 1947 under the name of Malayan Airways Limited. Many countries have national airlines that the government owns and operates. The International Air Transport Association (IATA) is an international industry trade group of airlines headquartered in Montreal , Quebec, Canada which formed on 19 April 1945. IATAs stated mission is to represent, lead and serve the airline industry. All the Airline rules and regulations are defined by IATA with the aim of provide safe and secure transportation to its passengers.

3.0 Technologies of Airline Industry and Their Usage

As the airline industry is a very complex industry that involves high set-up costs and faces high competition between various competitors, the airline company has to implement various types of information technologies to ensure its success in luring airline passengers to choose them as their mode of transportation. 3.1 Air AsiaOne of the airlines of Malaysia, Air Asia has carry out three type of information system such as yield management system (YMS), customer reservation system (CRS), and enterprise resource planning (ERP) system. This system make Air Asia more effective and efficiency and possibly able to reduce the cost and eliminated inefficiency in their business. 3.1.1 Internet technologyAir Asia has fostered a dependency on Internet technology for its operational and strategic management, and provides an online ticket booking services to traveler online. The following shows the home page of AirAsia.com as the company key channel of marketing and sales.

Sources: http://www.airasia.com/my/en/home.page

3.1.2 Yield Management System (YMS)Yield management system also known as revenue management system. It recognizes, anticipates, and responds to the behaviour of customer to maximize revenues of the organization. Air Asia used it to takes into account the operating costs aids Air Asia to optimize price and allocate capacity to maximize expected revenues.

Two level of optimization have been done by Air Asia which are Seat and Route. For seat is considered an opportunity to maximize revenue. Seats are available at various prices in different time. The reservation for the same seat which done earlier will be charged less than the one done at a later date. [ by Wong Pui Man,Cary, March 2009] Route is the adjustment of price through a demand when the demand is higher compared to other. The effective method however is to combine these two levels for all flights, all routes so that both the seat and the route are effectively priced for all the flights. Air Asia can more understand the behaviour of customer and offering the effectives and efficiency strategy. Results show an increased revenue of (3-4%) by taking advantage of the forecast of the high / low demand patterns, lower prices as YMS has aided Air Asia to increase the revenue by offering higher discounts, more frequently during off-peak times while raising prices only marginally for peak times.

3.1.3 Computer Reservation System (CRS)It is an integrated web-enabled reservation and inventory system suite powered by Navitaire Open Skies technology that includes Internet; call centre and airport departure control functionality. Open Skied also maintains centralized customer data and this help Air Asia to track booking and schedule fight activities with real-time, on-demand reporting feature. An important feature is that Open Skies seamlessly integrates with the already implemented YMS so that the system can be used in unison for pricing and revenue maximization and driving down the cost of operation at the same time.

CRS enabled Air Asia to introduce the first ticket less travel option and also provide features such as advanced boarding passes in addition to online booking that enabled the growth of Air Asia as these features attracted customers that did not have the time for purchasing tickets from counters and coming in 1 hour early for securing a seat on the aircraft. Navitaire's Open Skies technology has truly enabled Air Asia's growth from 2 million passengers to 7.7 million passengers in less than two years.3.1.4 Enterprise Resource Planning System (ERP)Integrated ERP solution powered by Microsoft business solutions (MBS) on Microsoft technology platform that is implemented by Avanade consultants in MA 2005. With the robust ERP technology platform, Air Asia is able to successfully maintain process integrity, red financial month-end closing processing time, speeds up reporting and data retrieval process.

3.2 Air Canada3.2.1 Electronic Boarding PassFly paperless from the Kiosk! Eligible customers can now receive their Electronic Boarding Pass directly on their mobile device when they check in at an airport kiosk located in any Canadian airport. Electronic Boarding Pass is a 2D barcode image that will sent to your mobile device and contains all of your flight details.Step1: Check in online, with your mobile device or at an airport kiosk to receive your Electronic Board Pass through E-mail or text (SMS) message.Step2: Proceed directly to security checkpoint.Step3: Access your Electronic Boarding Pass via the link in your E-mail or text (SMS) message and show the barcode with the flight information to the security agent.Step4: Proceed to your gate.Step5: Present your barcode to the gate agent to scan and board your flight.Step6: You may also show the in-flight crew your barcode and flight information in order for them to help you to your seat.

3.2.2 Self-Service Bag TaggingThis is a kind of technologies that can save even more time at the airport by using Air Canada's quick and convenient Self-Tagging option. It allows us to print and attach our baggage tags and then simply deposit our bags at the Baggage Drop-off counter. Figure below show the steps of Self-Service Bag Tagging:

Sources: http://www.aircanada.com/en/travelinfo/airport/expresscheckin/index.html

3.3 SITA

SITA is the world's leading air transport IT and communications specialists. Most of the Airlines use SITA's IT and communications solutions. They all rely on SITA's expertise to help keep the wheels of the industry in motion. The technologies below show the technological trends and their impact on the airline industry.3.3.1 In-Flight Entertainment (IFE)Passengers will develop a good knowledge of the service and product to expect of each airline. For example, crew service standards, seat pitch, meals offered, drinks offered, in-flight entertainment (IFE) experience and so on. [By Robert Boyle, 1, April 2009] With that knowledge and insight, they will make their choices accordingly. SITA anticipate that this extensive consumer knowledge of airlines' relative merits will increasingly drive consumer behaviour. Airlines delivering a sub-standard product and treating passengers with indifference will eventually go out of business.3.4 Orbitz Worldwide

A leading global online travel company that uses innovative technology to enable leisure and business travelers to research, plan and book a broad range of travel products. Orbitz was acquired by Cendant and assumed responsibility for Cendant's domestic online travel business, which included cheap tickers, a leading online travel brand focused on the value-conscious traveler, and for Flairview Travel, which operated the international online hotel websites. The figure below shows the different price of difference airline can be search by using the technologies of Orbitz:

Sources: http://www.orbitz.com/

3.5 SAM (System Aircraft Management)

An Easy-to-Use Software suite, making aircraft maintenance time saving and cost effective and provides aircraft operators and MROs with all functionality needed to fully manage their Aircraft. SAM's modularised structure allows you to include only the functionality needed by selecting the corresponding SAM modules. In addition to being easy-to-use and cost-efficient, SAM is structurally integrated. This means you can control an extensive range of maintenance planning and production functions as well as inventory, purchasing and invoicing functions, all with one system. All SAM modules are inter-connected sharing their information.

3.6 Your Assistance Delivered Anywhere (YADA)The YADA handheld let American Airlines staff check real-time flight status, provide connecting information, display maps of other airports and print boarding passes and baggage tags for customers checking in. The device, the size of a large cell phone, is attached to a small printer that hangs from the belt of the airline employee. [ Raymond Kollau, 2 July 2010] YADA enables them to come out from behind the counter and provide real-time information, bag tags, boarding passes and other answers wherever the customer is in the airport. The devices also read credit cards, agents can charge a bag fee directly at the boarding gate.3.7 Cockpit Computing TechnologyThe introduction of computing technology into the cockpit can help speed the pre-flight preparation process. Providing the flight crew with wireless portable computing devices can significantly reduce the time it takes to get a flight off the ground by enabling them to retrieve flight manuals, perform required load calculations and submit flight clearance data electronically.3.8 Global Positioning SystemWhile a number of infrastructure and regulatory changes must be forthcoming before it can be adopted for general use, the use of the global positioning system (GPS) for navigation in the airline industry can have a significant impact on the use of fuel. At present, aircraft must fly along paths designated by the ground-based radar system instead of along the most efficient path between the origination and destination points. [by R. Wayne Headrick] GPS, used in conjunction with a system that constantly broadcasts each aircrafts location to all other aircraft, can both improve safety and reduce the flight time and fuel used by an aircraft.

4.0 Importance of technologies

Information technologies are seen to have a significant impact on the safety, efficiency, capability, capacity, environmental impact and financial performance to the airline industry. Properly implemented of technology can have a significant impact on the airline industry. The Internet, social media, mobile devices, and other disruptive technologies become increasingly vital to the industry's future, offering the ability to improve revenues, deliver customer service, maintain reputation and enhance operations for airlines. Today the process is much easier and can be done from home via the internet. Booking airline reservations online offers a number of benefits over telephone or in-person booking. Booking flights through the Internet means that you have greater access to flight schedules. Customer can see exactly when the flight departs or arrives. Online booking allows customer to see the exact costs of difference airline and the costs of various options associated with a particular flight. Enabling passengers to check in early via the Internet has proven to be an excellent first step in smoothing the check-in process by allowing the passengers to accomplish part of the process prior to their arrival at the airport. It not only brings benefit to the customer, but also for the airline. Airline can minimize costs while providing convenient booking features for their customer. By using the technologies of baggage management systems, it helps to track every checked bag for its real-time location, owner, and whether every loaded bag is matched with a boarded passenger. BMS retrieve lost baggage information, and the world-class cloud computing network provides airports and airlines with all the intelligence they need for practically error-free baggage handling. Through smartphone apps, gain passenger confidence by providing them this real-time information as well. By leveraging any technological advantage can quickly increase the share of the market. Cloud computing makes so much sense in the industry today. [by Storminteractive, 2012] With the expertise in reservations, business intelligence, and operations management, combined with the cloud's advantages of scalability, reliability, and security, it ensures the airline's continued success. In addition of developing in-flight apps and systems for smartphones that integrates with reservation and ticketing systems. It provides the customers real-time information on seating, flight status, and weather and traffic conditions at their destination. Leverage mobile technology also to empower airport personnel to provide better customer service and increase productivity through more efficient decision-making systems.

5.0 Challenges for AirlineIn todays globalize economy, technology has driven fundamental changes in the nature and application of technology in business. The implementation of information technology in its value chain provides powerful strategic and tactical tools for airline, which if properly applied and used, could bring great advantages in promoting and strengthening the competitive advantages. It has not been an easy few years for the airline industry. Rising fuel costs, staff shortages and a unstable economy have all impacted flying, resulting in a number of airlines going bust, forced to up prices as consumer demand for flights drops. 5.1 What Are Some of The Challenges That Both Airlines and Airports Could Face?5.1.1 Improving EfficiencyAirlines are turning to any method they can think of to prevent airline delays including crowdsourcing and computer algorithms. Dealing with paperwork and procedures as well as the delights of the border can not only frustrate the customer, but limit the amount of available time slots for planes to take off.Airports are becoming congested and security is at an all-time high, so management now face an uphill struggle; keeping the business in profit, maintaining security, coping with increased competition and of course, the ever-present threat of adverse weather conditions.5.1.2 SecurityKeeping passengers safe both in the airport and while flying remains paramount. However, going beyondminiatureliquid bottles and taking your boots off at security checkpoints, the introduction of full-body scanners has caused much controversy Some airports will not let you fly if scan. At some point, an acceptable balance between security and viability has to beachieved.5.1.3 In-flight Connectivity As modern technology makes instant connectivity and Wi-Fi anexpectationof the modern consumer, transport businesses have to keep up. Although the use of gadgets and Internet services are still in fledgling stages when it comes to aviation. 5.1.4 Safety In The Air While travel by air safety is reportedly the best its been since the 1960s, with only 23 documented fatal crashes in 2012 and the development of tools to predict weather conditions,there are still concerns when it comes to the higher crash-rates of Latin America, Africa and developing regions. In addition, U.S. pilots are under scrutiny, as cockpit automation and increasingly congested airports may prove to become hazards.5.1.5 New FuelsBiofuels, renewable energy sources derived from biological material, can be used as a replacement for traditional fossil fuels. However, the sheerquantityand expense in production due to the industrys young age means that it is not necessarily financially viable to launchcommercialprojects for airline carriers. However, some airlines, including Cathay Pacific, have joined the Sustainable Aviation Fuel Users Group (SAFUG) to try to get these kinds of projects moving.5.1.6 Going GreenIt is not just biofuel development and the impact on the environment that are impacting the aviation industry, but airlines have had to cope with the introduction of legislation which would tax them based on carbon emissions.The European Commission said it planned to charge planes based on greenhouse gas emissions if they landed in EU member states. Airlines have argued that such measures could cost them upwards of $8 billion in the next eight years. 5.1.7 Innovative Plane Design A key question on airline managements mind: how do you keep flying cost-efficient and profitable, especially when rising operating costs including fuel and taxes? Cutting weight off craft is one way, which saves not only fuel, but may mean you can pack in another row of seats or two. Some of the methods airlines have employed include replacing bulky flying manuals with mobile devices including iPads and Windows 8 tablets, as well as new hybrid designs with elements including foldable wings that reduce fuel consumption. However, altering a planes traditional design can also be used to appeal to particular markets. Taking it a step further than Air Asia, where passengers can book seats in quiet zones without children under 12 being allowed.5.1.8 Consumer Demands and The Willingness To Pay Average ticket prices have jumped 10 percent in the last several years, potentially turning off consumers that can reach their destination in other ways. However, we can probably expect this trend to continue in 2013. However, as costs rise, standard airlines may find themselves abandoned in favor of the budget-airline niche carriers such as Ryanair.5.1.9 Bringing Airports and Airlines Into The 21st Century From printing your own baggage labels at home to avoid check-in, booking online or showing your e-ticket to check-in staff when you arrive, flying is now a different scenario from showing a passport and receiving a ticket in the post. However, if airlines are going to survive, they need to do more than simply invest in new tech to make their businesses better.Delta, for example, is a successful example of how to survive in todays tough environment. Refurbishing and purchasing older craft other airlines dont want in order to avoid debt, purchasing oil refineries to bring fuel costs under control and using non-union labor are some of the firms best profit-keeping methods.5.1.10 Finding StaffAccording to reports, airlines are finding it increasingly difficult to find and train up pilots, sending the industry into panic. New federal regulations coupled with a compulsory retirement age for pilots in the United States have contributed to the shortage, no doubt a severe headache for management in the coming year as half of U.S. pilots are already over 50.6.0 Issues That Faced By Airline Industry6.1 No National Air Transportation PolicyCauses: Unbridled faith in efficacy of market forces Lack of government and industry foresight and leadership

Effects All manner of intractable industry problems Vanquished professional workforce Dearth of strategic investors Outsourcing of aircraft maintenance Broken regional airline business mod6.2 Airline Over-SchedulingCauses: Lack of government and industry leadershipEffects: Extended tarmac delays Delays, cancellations Lost traveler productivity Negative environmental impacts6.3 Broken Industry Workforce ModelCauses Lack of productive labor-management model Lack of labor and management leadership Unworkable airline industry financial modelEffects No pride-in-place for industry workers No longer a desired professional career Lower flight-safety margins Adverse customer service impacts

6.4 Obsolete Air Traffic Control TechnologyCauses Ineffective FAA management Fragmented industry positions Lack of Congressional leadershipEffects Higher airline operating costs Harmful environmental impacts Lost traveler productivity Artificial constraints on capacity6.5 Airline Industry Financial FailureCauses Lack of industry and government leadership and planningEffects Pressure on safety margins Deteriorating customer service levels Loss of skilled jobs Lost service Loss of international aviation leadership

7.0 Comparison Between Technologies of Difference Airlines

Compare with the Canada airline, Air Canada provided Electronic Boarding Pass which you just need to enter your E-mail address or mobile phone number to receive an Electronic Boarding Pass on your cell phone or smartphone. During check in at an airport, you just need to present your barcode that you received inside your mobile phone to the gate agent to scan and board your flight. But for the Airlines in Malaysia, the passenger still need to proceed to the Kiosk for check-in, after that the Kiosk machine will print out the flight ticket and again the passenger have to show to the airports staff during boarding. Another technology which implemented by Air Canada is Self-Service Bag Tagging. Passenger can save even more time at the airport by using Air Canada's quick and convenient Self-Tagging option. The machine will automatically print out the baggage tags and the passenger just need to attach the baggage tags by their self then put the bags at the Baggage Drop-off counter. Compare with the airline in Malaysia, the passengers have to proceed to the Baggage Drop-off counter if they have luggage and most of the time they still need to queue up which brings inconvenience for the passenger.Well-designed and expertly developed in-flight entertainment systems can exert a surprising degree of influence regarding passenger satisfaction and loyalty. Virgin America has been voted the airline with the best in-flight entertainment system a few times now by various publications and airline associations. By attach an touch-screen seat-back TV , it allows passenger to watch movie, listen to music, read story book, and play game which will make the domestic flights become more interesting. In Malaysia, only international flights will be provided with in-flight entertainment system but for domestic flight, passengers have nothing can do inside the flight.8.0 What Will Happen If Airlines Industry Not Using Any Technologies?

There is only one thing could happen if airlines industry is not using any technologies which is bankruptcy. Why? Because airlines are most dependent industry on information technologies. No matter what business you are running, customers play as the most important role for business to continue survives. So how technologies related to the customer? Imagine if one of the airlines does not implemented with online booking technology, what will happen if the customers want to purchase a flight ticket? Do you think they will go to your airline company by travel few kilometres from their home to purchase a flight ticket which they might be also need to queue up for quite a long time? Or just purchase flight ticket through another companies which provided online booking technology

9.0 Conclusion Properly implemented, technology can have a significant impact on the airline industry.Technologies that improve a passengers experiences from the point where they enter the system as a prospective passenger to the point where they exit it at their destination significantly increase the likelihood that they will view future opportunities to fly positively and, over the long-term, will tend to increase the ticket price amount they consider to be reasonable. The introduction of such technologies into the airport terminal environment can significantly reduce the number of employees needed to provide the same or improved levels of service to passengers. Industry wide, common use air terminal facilities and their infrastructures can reduce the airlines cost of doing business and, at the same time, smooth the flow of passengers through those facilities. The airline industry must embrace new technologies if it is going to survive in a form that we would recognize. The application of technology will allow reductions to be made, while maintaining an acceptable level of customer service, must be undertaken.

The recommendation for the airlines in Malaysia is they must pay more attention for service channel as there is a huge customer complaints against very slow server for e-ticketing during promotion period. Not only that, airlines in Malaysia should remain competitive by providing better service and comfort to customers as in the long-term the market will grow.To keep their reputation as one of the leading airlines in the world for providing the best quality to their customers and to remain completive by providing better service to their business customers. Lastly, airlines in Malaysia should also improve their entertainment system so that passengers have something to do that can make the flight more interesting .

10.0 References1. Kochava R. Greene, eHow Contributor, The Advantages of Online Airline Reservations [online]. Available at http://www.ehow.com/about_5072492_advantages-online-airline-reservations.html2. JAD MOUAWAD, (June 4, 2010), Airlines Work to Catch Up to the Digital Age. [online] Available at http://www.nytimes.com/2010/06/05/business/05air.html?_r=1&3. Raymond Kollau, (2 July 2010), American Airlines equips customer service agents with mobile YADA [online] Available at http://www.airlinetrends.com/2010/07/02/american-airlines-yada-handheld/4. Robert Boyle, Director of Strategy & Business Units, (April 2009), Technological trends and their impact on the airline industry [online] Available at http://www.sita.aero/content/technological-trends-and-their-impact-airline-industry5. Air Canada, What is an Electronic Boarding Pass? [online] Available athttp://www.aircanada.com/en/travelinfo/traveller/mobile/ebp.html6. Storminteractive, Enhanced customer service, streamlined reservation and management systems, on the ground and in the air [online] Available athttp://www.storminteractive.eu/airline-industry.html

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