The IT crowd

Amadeus’ Jesper Soderstrom explains how new customer management systems will enable budget carriers to improve their respective websites.

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By  Jesper Soderstrom Published  March 6, 2008

Amadeus’ Jesper Soderstrom explains how new customer management systems will enable budget carriers to improve their respective websites.

Question:
How will new customer management systems enable budget carriers to improve their respective websites?

Expert: Jesper Soderstrom, Head of the low-cost carrier unit at IT company Amadeus.

We have developed the Low-Cost Carrier Customer Management System to cater for the needs of LCCs. We tried to make sure we supported their needs in this changing environment, where the market becomes saturated. Once that happens, LCCs start looking at other ways of developing. Growth and revenues are so important for all the carriers, with some OK to expand by just 2%. But others may want to experience two digit growth.

In new markets, the problem for LCCs is dealing with international passengers, with multi-currency or multi-language issues difficult for them to handle when using normal IT systems.

They start looking at new markets and customer segments or developing existing revenues. In new markets, the problem for LCCs is dealing with international passengers, with multi-currency or multi-language issues difficult for them to handle when using normal IT systems.

Checking in baggage or passengers may be difficult; they want this requirement but in some countries it's tough for them to handle. Interline agreements and codeshares may also be problematic, as they aren't normal issues for LCCs to deal with.

We have solutions for these areas. When it comes to customer segments, it's about reaching business passengers through the GDS. For those not using GDS, low-cost IT systems are available, although they only manage the airline's direct sales channels.

If you are a low-cost carrier, you manage 15,000 passengers a month or 10-15 million a year. But once you start hitting 20-80 million, you need a robust and resilient system in terms of up time. We use the same hosting system that we provide for other airlines, which numbers 150, so our operation is solid for LCCs. The customer management system offers scalability in functionality.

When we developed this new generation IT system called Altea, we built it using an open architecture. It's a service made architecture, so each functionality would have its own box. Our new system, Pioneer, re-uses the same architecture, so when an LCC needs a specific feature or functionality it can re-use the code we already developed.

We are running this from a data centre where we process more than 450 million transactions a day, so it's extremely scaleable and able to handle huge volumes. We started developing this system about 18 months to two years ago and it's always the case with customers where they want to add new features and functions.

They want to go to some specific area and grow further. Five carriers are using the systems at the moment, including Fly Nordic, Norwegian Air Shuttle and Express Jet.

For the Middle East, this market is just taking off, having only launched three years ago. There is tremendous growth and enormous opportunity. However, if you start looking at these carriers they mostly do direct distribution.

Even though they fly internationally, they have just started to take off with their current business model. I expect we will see more in the region and we are currently working with one. Some clients are using features such as Google Earth, which allows customers to see destinations via satellite images by clicking on a website link.

Right now, our customers using the system are working with tour operators, but some LCCs also like it. On the downside, an LCC that wants to grow internationally has a number of constraints.

The language, multi-currency and satisfying rules and regulations that come with international travel are all obstacles. But we have the infrastructure in place to help airlines overcome this.

An LCC that doesn't want to fly internationally and is based in a country like Brazil or Australia has lots of incoming traffic. The passengers booking may not know which LCCs are operating in that region because they are logging on in Sweden, Germany or France, for example. Being involved in the process when the traveller makes the booking is important to LCCs.

They can do that in two ways: either they are involved in GDS and popping up when an agent makes a holiday or flights booking in France, for instance. They can also do it through interlining and codeshares, but that isn't always easy for a ticketless carrier.

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