Software firms offer cost-cutting solutions to anxious carriers

Mumbai: As India’s ailing airlines run out of options to cut costs, technology firms are pulling out travel software that could help these carriers save some more.
Air transport technology services firm SITA says mobile phones can be used as passenger tracking devices to cut flight delays, saving about $600 million (Rs2,580 crore) collectively, for airlines globally. Mumbai-based travel software firm Kale Consultants Ltd says it can help airlines cut 30% of their revenue accounting costs with effective use of technology.
Because nearly 80% of their operational costs are fixed, airlines are seeking other options to save on costs.
Domestic airlines are expected to post a combined loss of $2 billion in fiscal 2009 because of spiralling aviation fuel costs that have almost doubled in a year, while international carriers are facing an estimated loss of $6.1 billion for the year.
SpiceJet recently implemented a monitoring software to arrest credit-card fraud, cutting down on staffing, and is now looking for cargo management software as well.
The UK’s second largest carrier, British Midland Airways Ltd, which does business as bmi, has reduced at least 30% of its revenue accounting costs by outsourcing to Kale Consultants, said bmi chief financial officer Robert Palmer.
India’s largest private airline Jet Airways (India) Ltd recently said the industry is losing at least $20 per passenger, signifying a 20% oversupply, or imbalance.
Globally, airlines are increasingly relying on technology to streamline operations and save costs in the process. In June, airlines all over the world stopped issuing paper tickets with multiple layers and colours in favour of e-ticketing.
13/07/08 P. R. Sanjai/Livemint

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Categories: Indian Aviation- In General Jul 2008