kostas malagas & nikitas nikitakos - polyu · pdf file“the impact of e-services in a...
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“The impact of e-services in a state-owned airline”
Kostas Malagas, Nikitas Nikitakos
University of the Aegean
Electronic Services in AirlinesElectronic Services in Airlines
Reservation & e-ticketing
Airrport Control Systems
Web Services
Frequent Flyer Systems
Revenue Management
Other Systems
Increase customer base
Improve customer services
Minimisation of operational costs
Establish the appropriate organisation
culture
Requires organisational
changes & replacement of processes and
practices
Increase efficiency,
productivity, and improve
compettiveness
Optimise their operations
Competitive advantage
Profit Maximisation
e-ticketing
e-ticketing
stress free ticketing
no risk to lose your ticket
no queues at departure airport
facilitates the use of self service check in
Leverages technology
Reduce complexirty and
costs (annual savings USD
6.5bn)
Assist travel agents (sell by
phone)
Increase convenient for passengers &
freight
change passenger tickets by phone
airline save 9 USD when issue an e-ticket
Airlines eAirlines e--services evolutionservices evolution
1950s First investments from airlines1962 Introduction of SABRE Computer Reservation Systems by American Airlines1970s
Airlines available solutions for e-servives
Airlines have 2 alternatives
evaluate their stregthness if not In house Outsource
no sufficient knowledge or expertise in-house
less time less cost
manage the possible conflict
Provider CustomersAirline
ee--services to airport operationsservices to airport operations
Web check inCUSS (Common Use Self Service kiosks)
- Strong passenger adoption- Shorten queue time, less congestion at ticket and gate counter- Optimise airport staffing
Frequent Flyer Programms
FFP members data & behaviour
Enhance customer experience & loyalty
Revenue Management
Revenue Management
Improved seat Utilisation rates
Optimisation of segemented
pricing
Generated increased profit
(6-10%)
Increased ROI
Mobile technologies
Mobile technologies
Better service to customers
Increased productivity
From Olympic Airways to Olympic AirlinesFrom Olympic Airways to Olympic Airlines
1957 Olympic Airways was established by Onassis.1971 Olympic Aviation, a new subsidiary was established to offerdomestic services.1972 Olympic Airways extended its flights to Far East and Australia1974 Onassis withdrew1975 Olympic Airways were bought by the State1991 Olympic Airways established its subsidiary “Galileo Hellas” to offer Computer Reservation Services1992 Olympic Aviation operated autonomously and a charter subsidiary was establishedAegean Aviation was initially set up
continued
From Olympic Airways to Olympic AirlinesFrom Olympic Airways to Olympic Airlines1994 The implementation of the 1st Restructuring Plan (R. 2271/1994)1996 The establishment of Thessaloniki secondary hub1998 The implementation of the 2nd Restructuring Plan (R. 2602/1998)1999 European Commission penalised Olympic Airways for not achieving the objectives of the 2nd Restructuring PlanAegean Airlines having capital injection entered the scheduled domestic marketBritish Airways subsidiary took over Olympic Airways Management2000 Pricewaterhouse Cooper had appointed to audit Olympic Airways finances in order the carrier to privatise2001 and 2002 Two privatisation efforts without success2003 Olympic Airlines was created to become more attractive to private investorsToday The carrier remains in the state hands facing financial problems
The main characteristics of state owned The main characteristics of state owned airlinesairlines
The occurrence of substantial lossesThe existence of an overpoliticised structureThe existence of strong labour unionsOverstaffed and low labour productivityNo clear development strategyBureaucratic managementPoor service qualityContinuous government intervention
Further to above Olympic has:Many different aircraft typesBureaucratic and overcentralised managementHigh seasonality and low yields
How the new PSS (eHow the new PSS (e--services) have services) have affected Olympic operation/performance?affected Olympic operation/performance?
Increased passenger traffic (by 5-6%), partly explained by the introduction of these services. Average fare slightly decreased (<1%) due to delay of the implementation of the new revenue management system.Significant improvement of ticket counters staff productivity.More agreements with other airlines, which have implemented e-ticketing services, have positive results for Olympic.Further co-operation with the GDSs has positive results also.Significant increase of revenues coming from the carrier’s web site.Less queues at the airports, improving customer service and staff productivity.
continued
Significant telecommunications cost savings.Cut distribution costs and back office accounting work.Immediate receive of passengers payments.On time revenue data information.The delay of the Revenue Management and Frequent Flyer Program implementations has negative results.
How the new PSS (eHow the new PSS (e--services) have services) have affected Olympic operation/performance?affected Olympic operation/performance?
Olympic introduced new electronic PSS Olympic introduced new electronic PSS services:services:
The decision for this was taken later than the other airlines and a year before the IATA’s deadline.The carrier decided to outsource these services.Olympic invited bidders for the tender of PSS services.The biggest providers were responded.The Technical and Financial Committees were scrutinised all offers and select the Provider.The migration Project started on 13th February and completed in 17th June 2007.
Why the new PSS services has positive Why the new PSS services has positive results for Olympic?results for Olympic?
because the “right” Provider selected: i) earlier migration to the new system, ii) did not require significant changes in computers and the cost that this can accrue.because a “good co-operation” of Olympic Project Leaders with the provider staff was established.because the “right Project Leaders” was selected from both organisations.
The main obstacles for the implementation The main obstacles for the implementation of the PSS services were (are):of the PSS services were (are):
the existence of two Management Teams in Olympic (Olympic Airlines and Olympic Airways Services).lack of the promotion of the new services to the public.no organisational restructuring to support the new services.the employees resistance in some cases.low staff morale due to the coming privatisation.
Passenger Service System:Passenger Service System:
to flourish firm should have clear strategic goals.requires the “right” organisational structure.assist airline to offer a differentiated product.offers cost benefits.maximise efficiency.management should monitor competition, government regulation, technology and other environmental forces.Cultural compatibility between client and vendor organisations
The advantage of the study is the actual The advantage of the study is the actual participation of one of the researchers in the:participation of one of the researchers in the:
Construction of the Request for Proposal.Member of the Technical Committee.Management of Project, as a Project Manager
Success of IT Projects:Success of IT Projects:
Commitment of the client to the Project.Consultants skills.“Good collaboration” between the client and vendor.Level of information sharing between the client and vendor.Open and honest communicationAvailability of in-house dedicated staff.Contract Management
ConclusionsConclusions-- what what organisationsorganisations should do should do when introduce advanced ewhen introduce advanced e--servicesservices
Introduction leaner and simpler organisational structure.New roles for staff and departments who lose some of their responsibilities.Scrutinisation of all providers offers in order to find the one that fit better the organisation needs.Find the most well-experienced and educated Project Leaders.The decision to introduce new services should be taken in the “right time”.
Limitation of the present study and future Limitation of the present study and future research:research:
more results when full services are implemented.limited number of interviews.find contacts/respondents from other airlines who use similar services.
Thank you for your attention