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55th Issue • Quarter 2, 2015

Introducing Two New Areas of Involvement

For In-depth Insight: The Airline Industry Economics Advisory

IATA’s Chief Economist, Brian Pearce, announces the latest area of involvement to be added to the Finance sector.

In the aviation industry’s complex and ever-changing environment, economic insight is invaluable.

IATA’s Economics Team has a decade-long track record providing insight into the drivers of the passenger and cargo markets and airline financial performance. So when Strategic Partners and other IATA members called for more in-depth insight, the team devised the program’s newest financial area of involvement: the Airline Industry Economics Advisory.

With greater access to the IATA Economics Team—consisting of seven economists—Strategic Partners can get to the heart of pressing economic and strategic issues affecting the entire industry supply chain, from fuel suppliers to airports, as well as analysts and consultants.

For example, one of the major cargo integrators contacted the team to discover the pattern of market development in the coming years. In another case, a large investment bank needed help understanding recent trends in airline financial performance. Lessors and manufacturers have been seeking the team’s insight into the factors surrounding the upcycle in airline purchases and leasing.

These issues and more may well be on the agenda of the first annual Advisory workshop slated for later in 2015. Attendees will be invited to identify the strategic and economic issues facing the air transport industry they’d like to discuss. Sessions will be interactive and solution-oriented.

Read more about the Airline Industry Economics Advisory and sign up here.

Contact Brian Pearce for more information.


For a Data-driven World: Data and Communications

Rick Hunger, Director, Safety and Flight Operations, introduces the latest Safety and Security area of involvement in the Strategic Partnerships program.

Data has become an integral part of the air transport industry. From flight operations, to maintenance, to ground operations, more data is being generated and captured than ever before. However, data only reveals its true value when correctly analyzed. Properly mined data can improve safety as well as day-to-day operations, promote best practices, assist with benchmarking, and streamline performance.

The airlines’ growing demand for data and analytics—and, by extension, communications—has led to the development of the Data and Communications area of involvement.

Under the Safety and Flight Ops banner, Data and Communications offers subscribing Strategic Partners full access to a complement of six key areas of interest:

IATA Flight Data eXchange (FDX)
IATA Flight Data Analysis (FDA) Service
Global Aviation Data Management (GADM) and STEADES
Quality and Compliance Working Group
Ground Damage Database (GDDB)
Audit Programs

By bundling safety data with analysis, IATA honours its ongoing commitment to improving safety while serving individual members and the industry as a whole.

Strategic Partners who would benefit from joining this area of involvement include those in data management and integration, risk mitigation, market intelligence, financial services, communications, auditing, and quality management.

Get the most out of your data by joining the already active Data and Communications area of involvement.

Read more about Data and Communications and sign up here.

Industry Events and Exhibitions
Strategic Partners:


You are cordially invited to attend exclusive industry events organized by IATA. Sponsor, exhibit, and participate at a reduced rate. Or participate by appearing as a guest speaker or by presenting.

For a complete list of all upcoming SP meetings and events, please visit our online calendar.


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Lufthansa and IBM: Lufthansa Accelerates Digital Transformation

Deutsche Lufthansa AG and its Group companies announced a seven-year IT services and outsourcing partnership with IBM to bring in new mobile, social business, and analytics technologies. This new alliance will give Lufthansa the tools to make its IT fit for the future.

Lufthansa is expected to save approximately 70 million euros annually due to the increased efficiency the airline group will see from optimized IT processes. Over the life of the partnership, Lufthansa will benefit from new solutions that incorporate business analytics with mobile computing and social business. The partnership will make it possible to offer new services to customers and make partners and employees more productive.

In order to strengthen its competitiveness, the Lufthansa Group, with its quality airline brands and its logistics, aircraft maintenance, and catering businesses, is realigning the Group’s IT activities.

By partnering with IBM in its digital transformation, Lufthansa Group has decided to accelerate the move to new technologies, such as cloud computing, to optimize efficiency and better meet business objectives. Lufthansa will be able to incorporate IBM’s latest technology and innovation, including strategic areas such as big-data analytics and cognitive computing systems.

Lufthansa will also benefit from a global and secure mobile infrastructure, allowing it to provision, secure, and manage mobile devices and apps easily. The new infrastructure will give customers and employees simplified access and new capabilities for its reservation systems and business processes.

Brian E. O’Rourke
IBM Global Airlines Leader

IBM


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MTU Aero Engines: The Successful Integration of OEM and MRO Businesses

With a new generation of engines entering into service, the business model for engine maintenance, repair, and overhaul (MRO) is undergoing significant changes. It has become common practice for original equipment manufacturers (OEMs) and aircraft operators to negotiate maintenance contracts as part of their purchase of new engines. The rules for this new business model are being established in parallel with existing business models.

In established engine programs, the OEM and MRO businesses are essentially independent from each other. The OEM has a higher interest in selling spare parts to the MRO shops for a catalog price. The MRO shops, on the other hand, win orders from the airlines and face direct competition from other MROs.

As a result, independent shops usually try to cut down the overall costs of shop visits. This reduction is achieved through specifically tailored services for each customer and may include lease services, mature engine management programs, and other integrated services of benefit to customers.

In contrast, the new engine programs will see the OEM and MRO businesses continue to merge. In this new paradigm, aftermarket participation will form an integral part of the business. In fact, the partners of a specific engine program already reach agreement for development, production, and aftermarket services at the time of the risk-share participation. This business model offers good workload visibility for the OEM partnership, and, even more importantly, a predictable maintenance cost overview for airline customers.

Michael Schreyögg
Executive Board Member and Chief Program Officer

For more information:
Melanie Wolf

MTU Aero Engines


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OAG: A Best-in-class Partnership with masFlight

However hard you try as a business, spreading yourself too thin can be an occupational hazard.

OAG is an international leader in gathering flight-status information, with about 95% coverage of all scheduled flights. With airlines and airports always seeking new ways to improve operational efficiency, benchmark productivity, and ensure they are best in class, flight-status analytics would provide yet another opportunity for OAG’s information to be used.

However, OAG was missing the in-depth analysis, technical insight, and working knowledge that would uncover its data’s value.

The solution? OAG developed a partnership with masFlight, a US-based flight status and operational research business.

Working together, OAG and masFlight have developed a commercial model that works for both parties. Most importantly, we started an open and frank relationship in which issues are regularly aired. No supplier likes to hear that it needs to “up its game” or watch a particular data development. But masFlight has such an upbeat way of reminding us what we need to do, we are always happy to comply.

While harmonious partnerships are all well and good, the proof of a solid partnership resides in the opportunities and revenue generated. Teaming up with masFlight has allowed us to learn about new market segments and particular customer-use cases, as well as to understand how business-critical OAG data is. Encouraged to build content and think differently about our data, we have also come closer to realizing our ambition to be the best in class with Flight Status.

The partnership has paid off for OAG, and masFlight continues to grow from strength to strength. Isn’t that what the best partnerships are all about?

John Grant
Executive Vice-president, Data and Market Intelligence

OAG


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QSL Consultores: Safety Assurance, a New Paradigm

Aviation regulations and industry standards have been one of the most effective defenses against aircraft accidents and incidents. However, most of these requirements were introduced after examining the root causes of these undesirable events. While the aviation industry has kept an exceptional safety record with this reactive approach, the introduction of Safety Management Systems (SMSs) has led to a shift to proactive risk management.

As a result, aircraft operators need to replace the traditional paradigm based on compliance with safety performance. Measuring the effectiveness of an organization’s SMS has been a particularly difficult problem for most operators. The boundaries between quality and safety assurance functions are not always very clear.

IOSA requirements specify that quality assurance is an integrated function of safety management, with a focus on compliance and the effectiveness of risk controls. On the other hand, safety assurance focuses on the application of performance measures as a means of monitoring the organization’s operational safety performance. It also puts the emphasis on the effectiveness of safety risk controls and change management. Safety assurance must then address safety outcomes.

Safety Performance Indicators are the best tool to monitor and establish the state of the management system and whether or not the operator is achieving its safety objectives. QSL has established a Safety Scorecard to understand safety accomplishment in a comprehensive systemic approach. The Safety Scorecard helps clarify the correlation between safety results and management-system conditions and is able to predict undesired events, establish trends, and identify areas of improvement.

A robust Safety Assurance measuring system is the key for safety management success.

Jose Castellanos
Vice-president, Aviation and Tourism Division

QSL


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New Strategic Partners

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.

Access the company websites directly by clicking on their logos.

  AlBusaili Sons Co. for Electrical and Mechanical Works   Aiport College International Ltd.
  AlBusaili Sons Co. for Electrical and Mechanical Works   Airport College International Ltd.
  Aireon LLC   All Nippon Airways Trading Co., Ltd.
  Aireon LLC   All Nippon Airways Trading Co., Ltd.
  ATIO Group   ATR—Avions de Transport Régional
  ATIO Group   ATR—Avions de Transport Régional
  Bag2Go GmbH   BCUBE Air Cargo S.p.A.
  Bag2Go GmbH   BCUBE Air Cargo S.p.A.
  China Aircraft Leasing Group Holdings Ltd.   China Civil Aviation Xin’gang Guaranty Co., Ltd.
  China Aircraft Leasing Group Holdings Ltd.   China Civil Aviation Xin’gang Guaranty Co., Ltd.
  Custom S.p.A.   Deloitte Touche Tohmatsu Ltd.
  Custom S.p.A.   Deloitte Touche Tohmatsu Ltd.
  Fortas   Hitachi Ltd. Central Research Laboratory
  Fortas   Hitachi Ltd. Central Research Laboratory
  Incheon International Airport Corporation   International Aeronavigation Systems Inc.
  Incheon International Airport Corporation   International Aeronavigation Systems Inc.
  Jushad Oil and Gas Ltd.   Landmark Aviation
  Jushad Oil and Gas Ltd.   Landmark Aviation
  Marks Systems Inc. dba masFlight   NX Systems Ltd.
  Marks Systems Inc. dba masFlight   NX Systems Ltd.
  PDC Aviation   Qatar Jet Fuel Company
  PDC Aviation   Qatar Jet Fuel Company
  RECARO Aircraft Seating GmbH and Co. KG   Reservation Data Maintenance (India) Pvt. Ltd.
  RECARO Aircraft Seating GmbH and Co. KG   Reservation Data Maintenance (India) Pvt. Ltd.
  TAV Information Technologies   UBIMET GmbH
  TAV Information Technologies   UBIMET GmbH

For a complete list of Strategic Partners, and to learn more about what they offer, please visit our online directory.


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This issue is also available on our website.
Partners’ Corner
Lufthansa
MTU Aero Engines
OAG
QSL Consultores
Spotlight on IATA
New Area: Economics Advisory
New Area: Data and Communications
New Strategic Partners
Meetings and Events
SP

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