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Partner Brief
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| Strategic Partnerships Newsletter |
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31st Issue • Quarter 4, 2009 |
Savings success in 2009 |
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The global financial crisis has had an impact on the entire value chain, with air traffic falling by double-digit figures in most regions in 2009 compared to 2008.
As air traffic decreases faster than costs can be reduced, there is intense pressure on unit prices. If prices rise, demand is reduced even further. This vicious cycle has affected everyone in the industry: airlines, fuel suppliers, airports, air navigation service providers (ANSPs), catering—the list goes on. Without a concerted effort, the natural tendency is to respond by raising charges and fees, essentially passing on the costs in an attempt to recoup some of these losses.
On another front, the industry is battling against more taxation. The economic crisis has caused governments to look for new sources of revenue to compensate for massive bailouts and stimulus packages.
This crisis has shown that it is essential for the industry to work together to reduce costs and stimulate demand, as every stakeholder will benefit from this growth.
With this premise in mind, IATA has approached the issues of cost efficiency and cost reduction from multiple standpoints.
One strategy, to remove taxes on aviation fuel, has seen some progress, with the elimination of the PIS/Cofins tax in Brazil being a notable example. Another cost-saving measure has been to encourage countries to use the correct fuel-pricing methodology. However, one of the biggest successes in 2009 has been dissuading airports and ANSPs from increasing charges by demonstrating that higher costs do not serve the best interests of the industry.
A well-established program with suppliers, service providers, and governments is already in place. The main goal of this program is to maintain direct communication with airports and ANSPs, ensuring a clear understanding of charges and other costs. These companies have been working more closely with the airline community since the onset of the crisis, improving cost efficiency and reducing charges in order to make travel more affordable and to stimulate demand.
One result of this initiative is that 14 of the 33 state members of EUROCONTROL have already proposed decreasing or freezing their charges.
In a time of crisis, what the industry needs are real cost reductions. The 2009 Board target was set at a total savings of $1.5 billion, including at least $1 billion in real cost reductions. By the end of October, the total savings for 2009 already amounted to $3.3 billion, including real reductions of $2.86 billion.
Results have been encouraging in a number of regions, Asia Pacific being just one example. Having recognized the importance of the aviation industry to the local economy, governments in the region have implemented policies reducing airport charges. For instance, at Narita (NAA) in Japan, the agreement to reduce landing charges will save airlines $60 million.
Fuel suppliers are well-represented in the Strategic Partnerships program, addressing issues of fuel fees and government taxes on aviation fuel by participating in the Fuel Work Groups. One recent cost-efficiency issue has been the reliability of the fuel supply in certain regions.
Another mode of involvement is the biannual three-day Aviation Fuel Forum, attended by 400 delegates representing the airlines, fuel suppliers, fuel service providers, and aircraft manufacturers. Strategic Partners work closely with IATA and airline representatives to prepare the agenda, and select speakers and Forum topics.
Though air freight and passenger traffic is already rising, albeit slowly, fuel prices are also rising. Going into 2010, IATA will continue its efforts to keep charges down and to dissuade revenue-hungry governments from imposing further taxation on the industry.
The success story of 2009 is that the industry faced the crisis as a united front. Let us hope that this spirit of cooperation and communication will continue, even as growth returns.
For more information on IATA’s fuel initiatives, including the Commercial Fuel Working Group, Fuel Supplier Advisory Panel, Technical Fuel Group, and IATA Aviation Fuel Forum, please contact partnership@iata.org. |
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Developing industry leaders to ensure the continuity
of aviation |
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Ismail Al-Baidhani of the IATA Training and Development Institute reveals the Institute’s fresh approach and new offerings for 2010.
From the economic crisis to the threat of the H1N1 virus, the industry is grappling with greater challenges on more fronts than ever before. To ensure the viability and continuity of the aviation industry, it is essential to streamline operations, optimize management practices, and realign business strategies.
The mission of the IATA Training and Development Institute is to lead the development of human capital for tomorrow’s air transport industry.
The Institute offers 30 diploma programs in the areas of airline management, aviation studies, organization and human performance, operations, regulations and compliance, safety, security, and travel and tourism. Classroom courses are offered at IATA’s six training centres in Beijing, Dehli, Geneva, Miami, Montreal, and Singapore, as well as at the offices of several regional training partners. In 2008, a total of 35,398 participants took advantage of the training opportunities offered in the classroom, in their companies, and through distance and e-learning courses.
At present, 23 of the diploma programs are offered in the classroom. The Institute tends to offer more instructor-led courses, because participants generally have more to gain by attending a course in person. Benefits include interaction, case studies, simulations, as well as the opportunity to meet and network with industry professionals.
However, the Institute is constantly seeking new ways to develop training solutions that enhance industry performance and competencies and address the needs of its clientele. To this end, the Institute has launched an initiative to customize courses that meet regional and market needs. This means offering more tailor-made courses in the regions, as well as increasing the number of e-learning courses. It also means constantly improving the quality of instruction.
The IATA Training and Development Institute has always prided itself on the high calibre of its instructors. In 2010, this excellence will be enhanced by the inclusion of IATA’s own subject-matter experts on the faculty. Drawn from every region, the new instructors bring their comprehensive knowledge of the industry as well as their familiarity with different cultures and markets. A major priority for the new year will be delivering increased regional training opportunities in the participants’ first language.
The objective of all the Institute’s diploma programs is to develop transferable competencies.
More than ever, it is essential for industry stakeholders to learn how to do more with less to secure the continuity of the industry. To address this need, the Human Performance area of study was relaunched in October 2009 with a new product manager, Ismail Al-Baidhani, a new name, Organization and Human Performance, and two new diploma programs for 2010.
Strategies have to evolve continually in order to face new challenges, such as those presented by the current economic crisis. The new Strategy and Communication diploma introduces three new courses. The International Strategy Planning and Implementation course teaches participants how to design a strategy from the ground up with a methodology applicable to all aspects of aviation. The other new courses for this diploma include Effective Communication Skills and Organizational Development and Change.
In this time of crisis, a main preoccupation is cutting costs. The second new diploma program in the Organization and Human Performance portfolio is Operations Excellence, which, as its name indicates, focuses on improving operations. The course on Lean Management in Aviation teaches participants about ways to improve efficiencies and reduce costs, skills applicable to operations, maintenance and repair organizations (MROs), service providers, and manufacturers. The other new courses in this diploma program are Drive Corporate Performance, Organization and Aviation Risk Management, and Advanced Project Management, approved by PMI in the United States.
Also, Air Mercury–Next GenerationTM has been revised and updated to address current industry conditions. This course provides a thorough understanding of the factors affecting airline success and profitability through interactive lectures, exercises, and a simulated team project.
The Institute offers the tools necessary to face an uncertain future. Register now for 2010.
For more information, please visit the Institute or contact directsalesymq@iata.org.
Find out more about the Organization and Human Performance diploma program. |
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Baggage Sortation Management: In partnership with regional airports |
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All airports face the increased pressures and cost of raised security requirements. It has become increasingly obvious that a partnership approach is an extremely effective way to handle the many resulting demands.
On 8 May 2007, the Australian federal government announced a policy mandating the extension of checked-bag screening to 26 regional airports. The point of initiation was the acceptance of jets. Though many of the larger prop aircraft carry an equivalent number of passengers, Australia’s Department of Transport and Regional Services (DOTARS) found it simpler to use jets as the key determinant.
Since then, Baggage Sortation Management (BSM) has been working closely with the Australian Department of Infrastructure, Transport, Regional Development, and Local Government; manufacturers of multi view technology (MVT) equipment; airlines; and, of course, regional airports. These airports face a range of complex issues specific to the regions, including climatic extremes, smaller passenger numbers, difficulties in attracting workers, and a price-sensitive market (primarily recreational travel). BSM has been able to suggest possible solutions for all these areas.
Until the global economic slowdown, the number of passengers and new airlines flying to regional ports had been steadily increasing. In partnership with 15 regional airports, BSM has developed a range of options to ensure CBS compliance and the ability to expand the system as required.
BSM’s systems had to be robust enough to take high numbers at peak without being prohibitively costly to implement. With its extensive experience, BSM was able to ensure that the baggage-system design made functionality and client satisfaction top priorities.
BSM will continue to forge partnerships to provide cost-effective, flexible, and secure baggage-system designs.
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Farelogix: Cost-value aspects of travel-agency distribution |
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Travel-agency distribution represents both opportunities and challenges for airlines. Compared to airline.com, product differentiation in the agency channel is limited, and distribution costs are higher. Yet few question the actual efficiency of the transaction process.
A prominent international carrier was seeking to address specific challenges associated with agency distribution. The airline had the following three objectives:
- The significant reduction of the distribution costs of global delivery systems (GDS)
- The development of a deeper and more “individualized” relationship with its travel-agency channel
- The ability to offer unique and customized content to its most important customers
Farelogix and the airline entered into a partnership relationship resulting in the development of a customized “airline-branded” travel-agency booking platform. Similar to GDS, the system connected directly to the airline’s computer reservations systems (CRS), with support for the same agency functions. However, this new direct distribution channel used newer and more cost-effective technology. The new technology enabled the airline to lower its per-ticket distribution cost by over 80%.
During project implementation, Farelogix and its airline customer faced challenges with back-office integration, ARC/BSP certification, and reporting. However, by using a transparent and agency-friendly approach, these once seemingly overwhelming challenges were overcome. Several new features benefiting both agency and airline were identified and developed.
Now the airline is reaping the benefits of lower distribution costs. And it continues to strengthen its travel-agency relationships by delivering personalized and enhanced product offerings.
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Finsecpro: Timely security for Servisair Cargo Finland |
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Established in 1994, Finnish Security Projects Ltd (Finsecpro) has been heavily involved in aviation security training and consulting since 2000. Services include security screening, cargo procedures, dangerous-goods training, auditing, and implementing EU regulations.
Operating out of Helsinki-Vantaa airport, Servisair Finland, established in 1964, provides ground-handling and passenger services, while Servisair Cargo Finland handles cargo.
Servisair Cargo Finland’s security had always been outsourced. However, starting in 2008, Servisair Cargo’s staff started to perform the security checks for air freight. Before they did, Servisair Cargo engaged Finsecpro to train and qualify Servisair Cargo terminal staff to perform the security checks.
The training of security-screening staff is highly monitored by Finnish CAA. All training must include approved classroom and hands-on training with experienced security-screening staff. A final exam must also be passed before authorization can be given to perform cargo security-screening tasks without supervision.
The training course was developed by the two companies in close cooperation. Because of tight local regulations and the time limit for the changeover, many issues had to be taken into consideration. After all, cargo is a time-sensitive industry.
In the implementation of the training program, all cargo-terminal routines were carried out without delays. Timing, manning, and training schedules were tailored to enable normal cargo operations.
A major benefit of having Servisair Cargo perform the security checks has been the acceleration of procedures for export-cargo acceptance. The Servisair Cargo terminal staff is able to handle all of the tasks involved in the workflow of export-cargo acceptance. With no other party responsible for security screening, the export workflow has been streamlined.
In the case of urgent shipments, export-acceptance procedures are completed concurrently with the security check. The shipments are then taken directly from the security check to the flight build-up. In addition, export cargo can be accepted and security-checked 24 hours a day, every day of the year.
These days, security regulations are getting stricter, and additional audits from various regulators are continuously carried out. Servisair Cargo and Finsecpro have succeeded in maintaining all security levels required by regulators and their clients, while providing professional and flexible service.
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IER: An innovative travel process for Air New Zealand domestic flights |
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Air New Zealand has presented its passengers at Auckland Domestic Airport and other New Zealand airports its new state-of-the-art check-in and boarding experience.
Air New Zealand has introduced the following:
- New layout
- New kiosks enabling customers to print their own bag tags
- Direct-to-conveyor-belt bag-drop zone to eliminate queues
- New gate scanners for straight-to-gate check-in
- Boarding for customers without bags
- Several new technological enablers for frequent flyers
IER was selected to provide Air New Zealand with approximately 100 self-service kiosks. These kiosks have been equipped with a 2D-barcode scanner to read passengers’ printed or mobile-phone boarding passes and a bag-tag printer for self-tagging before drop-off.
The kiosks also include a radio-frequency (RF) scanner for reading the ePass RF sticker provided to Air New Zealand’s frequent flyers. IER also supplied the check-in application CUSS, customized to the airline’s features, and its monitoring system, allowing supervision of the installed base in real time.
This revolutionary passenger process uses 2D-barcode and RF technologies at the departure gates as well. The IER 2D-barcode and RF scanners are used by passengers themselves to scan their boarding passes (on paper, on mobile screen, or with their RF sticker). Passengers without baggage can go directly to the departure gate without having to check in first. Air New Zealand has created and delivered a new experience that allows its customers to move quickly and seamlessly through domestic airports.
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Mobiqa: Mobile bar-coded boarding passes for Qatar Airways |
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In 2008, Qatar Airways approached Mobiqa looking for an international mobile bar-coded boarding-pass solution to encourage passenger self-service.
At the height of significant change in the airline industry, Qatar sought to enhance its check-in and boarding-pass delivery process. A web check-in functionality combined with mobile boarding-pass delivery would dramatically improve convenience for passengers, especially business travelers.
Qatar’s service had to be fully international from the start, a concern Mobiqa was equipped to address. Mobiqa is able to deliver mobile content to a wide range of handsets by customizing content specifically to passengers’ mobile handset make and model. With connections to all major network operators, Mobiqa can deliver mobile boarding passes to the over 95 countries required by Qatar.
Qatar saw immediate results after the launch of its new mobile boarding-pass delivery service. Customer service improved as passengers took advantage of the convenience of checking in online and receiving their boarding pass on their mobile phone. Business passengers benefited by bypassing the check-in desk and proceeding directly to the security checkpoints using their mobile phone.
The benefits of boarding-pass delivery via the mobile phone extend to the airline and airports as well. Significant cost savings result from the increase in off-site self-service enablement. Mobile delivery is more eco-friendly, as boarding passes no longer need to be printed on expensive paper stock, adding to the cost savings.
Qatar’s passengers continue to enjoy the convenience of these combined solutions, which reduce costs while improving customer service.
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Simplifying the Business to meet all 2009
Board targets |
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In a year marked by troubled economic times, Simplifying the Business (StB) continued its drive to lower costs and improve service. All StB projects are on track to meet 2009 Board targets. These results are significant at a time when cost pressures and competing priorities may have led to scarce resources being put elsewhere.
However, Philippe Bruyère, StB Director and Global Head of the Passenger department, says the opposite is true. “In a time of crisis, Simplifying the Business—which promises up to US$14 billion in annual savings for the industry—is more relevant than ever,” argues Bruyère. “The response of airlines, airports, and ground handlers around the world to StB initiatives this year illustrates that there’s no better time to simplify the business.”
The results speak for themselves. As of 31 October 2009, five of the nine Board targets had already been achieved:
≥ target
| BCBP |
Baseline Dec 2008 |
Latest Actual |
Target
End 2009 |
Forecast
End 2009 |
| BCBP global capability |
43% |
80% |
60% |
84% |
| BIP |
Baseline Dec 2008 |
Latest Actual |
Target
End 2009 |
Forecast
End 2009 |
| Diagnosis performed and date agreed to review implementations based on final report |
N/A |
11 |
20 |
25 |
| Fast Travel |
Baseline Dec 2008 |
Latest Actual |
Target
End 2009 |
Forecast
End 2009 |
Number of Bags Ready
to Go capable airlines |
N/A |
22 |
10 |
30 |
Number of Bags
Recovery capable airlines |
N/A |
16 |
10 |
20 |
Number of Self-boarding
capable airlines |
N/A |
15 |
10 |
15 |
| CUSS sites with Document scanning capability |
N/A |
117 |
75 |
117 |
| IATA e-freight |
Baseline Dec 2008 |
Latest Actual |
Target
End 2009 |
Forecast
End 2009 |
Number of locations
having implemented
e-freight |
18 |
21 |
23 |
26 |
Number of Bags
Recovery capable airlines |
25 |
41 |
44 |
53 |
Number of Self-boarding
capable airlines |
0 |
53 |
N/A |
53 |
| CUSS sites with Document scanning capability |
13 |
15 |
16 |
16 |
“This would not have been possible without our Preferred Partners,” continues Bruyère. “They are instrumental in providing solutions that make change happen.” Indeed, StB Preferred Partners, through their participation in working groups and webinars, are key catalysts for simplifying the business.
With the internal restructuring that took place at IATA over the summer, StB partners are set to benefit from greater exposure and increased access to potential customers.
In July, StB merged with two other organizations at IATA, Passenger Services and Industry Distribution and Operations. The new Passenger department consists of six areas:
- Passenger Experience, which includes Fast Travel and BCBP (Bar-Coded Boarding Passes)
- Passenger Interline Standards
- Airport, Inflight, and Scheduling, which includes BIP (Baggage Improvement Program)
- Distribution Management
- Agency Policies
- Operational Performance and Industry Systems
IATA e-freight is now part of IATA’s Cargo Division.
Philippe Bruyère, formerly Program Director of Simplifying the Business, is now Global Head of the new Passenger department. StB’s mission to lower costs and improve service remains unchanged. The StB brand and program remains intact. In addition, the combination with other groups means more opportunities for current StB Preferred Partners.
Companies will now have the opportunity to get involved, not only to mobilize the industry, but also to set standards and participate in governance groups. The scope of work will also expand, in line with the evolution of StB, from individual technology projects (like e-ticketing) to end-to-end business transformation initiatives (like the Baggage Improvement Program).
For more information on opportunities for Strategic Partners in the Passenger area of involvement, please contact Claudine Breton at bretonc@iata.org.
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IATA Conferences and Events |
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IATA conferences, exhibitions, and industry meetings provide outstanding networking opportunities as well as an association with the IATA brand, a world-class global endorsement. These events cover areas as diverse as pricing, ground-handling, legal issues, fuel, security, etc. benefiting airlines, airports, travel and cargo professionals, as well as service providers and governments.
- IATA Commercial Strategy Symposium 2009
9-11 December 2009 – Athens, Greece
For the third consecutive year, IATA is proud to provide a one-stop shop for your entire commercial team. Learn how to capture opportunities arising from the complex airline business, develop an effective customer-centric strategy, enhance business processes, and grow margins and market share.
- StB BIP Webinar
10 December 2009, 4:00 p.m. (GMT+1) – Geneva, Switzerland
In this free webinar entitled “Avoiding Mishandling during the Claim, Re-routing and Re-flighting Phases,” learn the best practices for recovering from bag mishandling, mimimizing compensation payments without sacrificing customer satisfaction, and making your reflight process work.
- World Cargo Symposium
8-11 March 2010 – Vancouver, Canada
With the theme “Bounce Back: Rebuild for the Future,” this forum aims
to move from talk to action. Topics will address how the air-cargo supply chain can recover from the current recession and how to plan for the future.
- Wings of Change VI
24-25 March 2010 – Santiago, Chile
With the theme “Partnering for Prosperity,” this important forum will address the regulatory needs of the Latin American aviation industry in these challenging times. This biennial conference will once again cover the main topics facing airlines, aviation authorities, airports, regulators, and other industry stakeholders.
Other events:
Click here for a list of all upcoming IATA events.
Event sponsors and presenters
Sponsoring and exhibiting at IATA conferences and events provide an ideal opportunity to present your products and services to a focused and targeted audience.
For more information, please contact:
Michael Huntington
Manager, Sales
Tel.: +1 514 874 0202, ext. 3495 |
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| New Strategic Partners |
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Since 1990, IATA Strategic Partners have been contributing to IATA and the air transport industry through their involvement in the Strategic Partnerships program.
We are happy to introduce the following new Strategic Partners. Please click on the company logos to visit their respective websites.
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| Air Partner Fuel |
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Curoil N.V |
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Sol Aviation Services Ltd.
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| Everbread Ltd. |
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Abu Dhabi Aircraft Technologies |
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Petrolimex Jet Fuel
Joint Stock Company (PJF) |
For a complete list of Strategic Partners, and to learn more about what they offer, please visit our online directory at www.iata.org/sp/partners. |
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