It's not too late for struggling airlines to shift to new technology and cut costs, according to Paul Coby, chief information officer of British Airways. Coby, who also is chairman of the board of SITA, told delegates to SITA's Air Transport IT Summit in Brussels to take advantage of the "community model" that allows carriers to use new technologies on a per-transaction basis rather than requiring a large upfront investment.
With skyrocketing fuel costs, the airline industry is facing a crisis unlike any other, Coby said. "After 9/11, we had a big, downward spike in traffic, but it came back," he said. "This is different. There is a fundamental shift in how the industry works."
Surviving the oil crisis "will depend to an enormous extent on IT and on the CIOs who make it work in airlines," he said. "CIOs should be talking to their airlines about how IT can improve customer service and cut costs across the whole airline, rather than simply running old IT systems."
Coby said airlines should spend more on investing in new technology than in running the old. "How much you invest is not the same as how much you spend," he said.
Service-oriented architecture also will have "interesting effects" on the industry, Coby said. It will allow airlines to link their legacy systems, which have been written down and in many cases still work well, to new technologies.
Airlines also should be sure that they are taking advantage of direct distribution to cut costs, Coby said. Online purchasing is becoming the "default" method of buying air travel, he said.
Carriers also should be willing to be creative in cutting their costs, Coby said. For example, can an airline forgo the installation of airport self-service kiosks, which cost several thousand dollars, and instead set up a few PCs that cost a few hundred dollars each? Coby said the airline IT of the past "was focused on technology. The IT of the future will focus on processes, proposition and people." The differences between technology projects and business projects will disappear, he said. "It's the technology, stupid. It's central to everything we do."