Following the annual SITA IT travel summit in Brussels, Joshua Norrid, industry VP for travel and leisure at Progress Software, explores some of the key talking points from the show, including the challenges airlines are facing with rising oil prices impacting future IT investment...
I often think that managing an airline in today’s climate can be a bit like trying to keep several plates spinning at once – one mistake, and all your hard work can result in a costly, embarrassing mess.
Over the last 12 months, we’ve heard a great deal from airlines, which are finding themselves having to make some difficult decisions about how they approach the road ahead. Increased costs across the board have seen airlines of all shapes and sizes slashing their budgets as they look for the best way to cut costs without reducing overall efficiency.
The situation has now become so drastic that traditional industry growth has been put on hold by the majority of airlines, which are instead looking for ways to keep their heads above water by releasing funds from areas such as maintenance and distribution.
So what are the causes of these increased costs? As we begin to emerge from the shadow of the global economic downturn, why are so many airlines finding it necessary to tighten their belts?
Clearly, there are a number of conflicting economic and political factors driving this need. Perhaps the most significant of these is that the cost of fuel has rocketed to as much as $100 a barrel, by as much as 31 per cent year-on-year in some territories. This price increase has had an obvious knock-on effect for airlines, many of which have been faced with a straight choice between passing this increase onto their customers or trimming overheads.
Other factors, including an increase in political hotspots around the globe, are reducing the number of flights leaving each day – adding to the pressure. Either way, it’s becoming increasingly clear that airlines are facing an uphill struggle, as they fight tooth and nail to hold on to market share, while trying to ensure that customer satisfaction is not affected by their drive to reduce overall operational costs.
Perhaps this is where software developers can play a part? By allowing airlines to view business-critical information in real time, complex event processing software can help to establish which areas require greater resources, and which can be trimmed as and when circumstances dictate.
This will allow them to view the performance of their entire operation in real time, and make better, more informed decisions. This software could be one way for them to avoid making potentially costly mistakes – and keep all of their plates spinning!