The Changing Face of Aviation Networked IT

Presentation to The 3rd Annual Middle East Aviation IT Forum

ByRay Batt

Director, Network Solutions, ARINC EMEA

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Air Carriers can leverage to reduce costs and improve performance

• Summary

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Air Carriers can leverage to reduce costs and improve performance

• Summary

Aviation Market Overview

• Passenger growth to increase globally at 5.3% p.a. over next 20 years

• Cargo growth by 5.9% in same period

• Flag carriers need to increase efficiency and reduce costs to compete

• IT spend stagnant, need for technology refresh

• Few if any more staff

• Uncontrollable costs rising – fuel, airport fees etc..

Market Requirements

• Reduce total cost per passenger

• Minimise capital expenditure on infrastructure

• Lower costs associated with managing partners

• Deliver service levels consistent individual site requirements

• Leverage Internet technologies and COTs products

• Deploy operational and business tools that maximise ROI

• Total visibility of services delivered though effective real time reporting

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Air Carriers can leverage to reduce costs and improve performance

• Summary

Market Dynamics Middle East Airline Trends

•Passenger Traffic up 24% on 2003

•Aircraft movements up by 9% in same period

•Increasing yields, profitability and opportunity for new competition

•Cargo Tonnes up 13% on 2003

•Reflects increasing disposable income

•DXB major cargo hub

Why such dramatic growth?

• Middle Eastern peoples disposable income growth

• Migrant workers supporting expansion of GCC economies

• Increasingly younger populations keen to travel

• Windfall revenues from Oil Price rise increasing spend on infrastructure projects

• Free Trade Agreements open market opportunities

• Largest import markets by value Saudi Arabia, UAE and Egypt

• Since FTA Jordanian exports to US increased from $63m in 2000 to $1.1billion in 2004.

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Air Carriers can leverage to reduce costs and improve performance

• Summary

Key IT Focuses for IT Departments

• Deploy new systems that deliver short term payback

• Live within changing budget constraints by leveraging alternative

technologies

• High staff turnover increases user support and training costs

• Scarcity of legacy support drives migration

• Maintain ageing desktops and terminals

• Support customer service improvement

Service Level “Pick n Mix”

Redundancy

Where Does The Aviation IT Budget Go?

Multiple desktops that need managing, supporting and upgrading.

Where Does The Aviation IT Budget Go?

Access and share information with hosts and applications globally

Where Does The Aviation IT Budget Go?

Revenue generating routes originate from your world

Where Does The Aviation IT Budget Go?

Network Infrastructure that reflects another age

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Air Carriers can leverage to reduce costs and improve performance

• Summary

Adoption of IP Within the Aviation Industry

• IP is the key facilitator for many of the new initiatives!• 40% of Carriers still to migrate to IP from Legacy • IATA’s Simplifying the Business driving E-Ticketing and CUSS

• Host to Host messaging moving to MATIP now…!• Real and tangible savings being achieved, $3million by one ME carrier

with ARINC’s Global Partner Connect Service• Some partners slow to adopt IP = holding back savings• RFC 2351 MATIP standard allows wide variations in implementation =

cost

• Back Office Systems make extensive use of IP• Intranets, Remote Access, Roaming WiFi GPRS etc• Applications IP Enabled, SAP, eMail etc• Traffic Prioritisation and Class of Service support required

• Most Front Office Systems not integrated• Mainly use gateways to legacy applications• No connectivity to back office systems• Mission Critical Applications (RES/DCS etc)

Adoption of IP Within the Aviation Industry

• All Airlines have some level Internet presence• Level of Customer Interaction varies• Sales Only, Check-in, Seat Selection, Frequent Flyer Program

Adoption of IP Within the Aviation Industry

• Increasing deployment of IP VPNs over MPLS infrastructure • Predominantly back office systems• Regulation and monopolistic lack of competition in Middle

Eastern market holding back savings – Competition drives Choice = Lower Cost

• Trials of self built Internet based VPNs – “DIY Networks”• Varying levels of success, network management and ISP

relationship problems.• Security policy enforcement issues• Virus protection issues

• VoIP• No significant take up unless you include Skype• Some regulatory restrictions preventing take-up• Massive replacement costs• Telco’s deploying VoIP in core and reducing call charges

Agenda

• Aviation Market Overview

• Market Dynamics Creating Opportunities for Middle East Carriers

• High Cost Points of Existing IT Infrastructure and Systems

• Adoption of IP within the Aviation Industry

• Solutions Carriers can adopt to reduce costs and improve performance

• Summary

Optimising the Infrastructure

• Multi-carrier VNO architecture brings competitive choice and removes technology dependencies;

• Best fit solutions for each location, using Broadband DSL and Wireless, and MPLS (AviNet Private IP)

• Refresh common use environment with Open Airport architecture, enable front office user integration with back office systems (AviNet Airport)• Leverage commercial applications to replace dedicated industry messaging client (AviNetMail and MHS)

• Optimise IATA messaging to drive down costs throughout the business. (AviNet Type B and Global Partner Connect)

• Harnessing the global capabilities of the Internet (AviNet Broadband)

Integrating the Internet

“Managed properly, the Internet has finally become a viable and attractive network solution” – SITA

At ARINC we agree!

Today ARINC are the only global services provider for the Air Travel Community with a Managed Broadband Capability in 150 countries via 400 partner ISP’s

Enabling: The Power of the Internet with Lower Cost, Security, End to End Management underpinned by robust SLA’s & 2 Classes Silver and Bronze (99.5 to 99.9% availability)

ARINC now offers AviNet Broadband in partnership with Vanco LLC the world leader in multi-country DSL delivery and support

The Internet with integrated security in place is indeed now a viable and attractive network solution!

With Gartner forecasting that the Internet will be good enough for over 70% of business-to-business network traffic by 2007 (1)

(1) From a presentation to Gartner Symposium ITXPO 2003 by Neil Rickard, entitled ‘The Ultimate Network Architecture for Real-Time Enterprises

ARINC ‘s VNO Model “The Best of Both Worlds”

• Robust Core Network with MPLS (6 CoS Supported)

• Multi-Carriers – Global, Regional and Macro Partners in over 220 countries

• Multiple Access Technologies with

various redundancy solutions AviNet Private IP

• Wireless and Mobility Services AviNet Wireless and Opti-Fi

• Integrated Managed Broadband in 150+ Countries offering Public and Private Internet services AviNet Broadband

• Consultancy and Professional Services AviNet Professional Services

An Integrated Infrastructure Approach

ARINC Global NetworkARINC Global Network

AviNet Network SolutionsAviNet Network Solutions

Aviation and Airports Operational Services, Products, Content and ApplicationsAviation and Airports Operational Services, Products, Content and Applications

AviNetAviNetPrivatePrivate

IPIP

AviNetAviNetBroadbandBroadband

AviNetAviNetRemoteRemote

AviNetAviNetSecuritySecurity

ACARS

AviNetAviNetMessagingMessagingServicesServices

AviNet Messaging Services – IP Migration and Legacy Conversion

AviNet Global Partner Connect and AviNet Type B

With attractive pricing plans and elimination of legacy infrastructure, AviNet Global Partner Connect and AviNet Type B is an enabler to IP Migration with “Any to Any Connectivity”

Protocol conversion functions between you and each of your trading partners including;MQ to MATIPIP to X.25X.25 PVC to SVCXML to any other format

Support for proprietary and custom message formats and headers

Full end to end proactive management of all messaging and network elements and single source responsibility “turn-key”

AviNet Network Solutions

• Overcome the 20 year technology trap

• Robust global backbone interconnecting competitive carriers to provide IP aggregation with any to any connectivity

• Enables “best choice” access technology and carrier optimisation.

• Only vendor to provide SLAs over Internet

• Don’t go West to get to the East

– Optimise application response– Truly enables convergence

Global Belt to Optimise Latency

Christchurch

Melbourne

PerthSydney

Brisbane

Auckland

Singapore

Bangkok

FrankfurtLondon

San Francisco

Washington

ChicagoNew York

Dubai

Q1 ‘06Q1 ‘06

Thinning the Desktop – Optimising Performance in IP Networks

• Traditional fat clients Windows desktops difficult and expensive to manage..

• Local processing requires, more costly, higher performance workstations

• Modern applications ideal for thin client operation

• Centralised application processing lowers desktop specification and cost

• Absolute control over desktop, improves productivity and simplifies management

• Linux, X-Windows and OpenOffice deliver a low cost, high performance and high quality alternative.

• Is it ready for the Desktop?• Extensively used for high performance and

high availability servers• German Government makes extensive use of

Linux desktops• China and Taiwan governments use

StarOffice a derivative of OpenOffice

Summary

• “Smartsource don’t Outsource”

• Build solutions around alternative products that optimise performance and reduce costs.

• Defer the cost of change through innovative revenue based options

• Challenge they way you do things today

• ARINC a longstanding communications integrator for the Air Transport Community since 1929

There is nothing permanent except change. Heraclitus

It is not necessary to change. Survival is not mandatory. W. Edwards Deming

Thank You!

Sukran

Shakkran