The Hindu Business Line : Gaining height, with IT

But it did not move forward in IT deployment till competition from low-cost carriers such as Ryan Air and EasyJet made a dent in its customers, forcing the airline to invest heavily in IT.

Today, the UK-based airline annually spends nearly £100 million with returns of three to five times, says Paul Coby, CIO, British Airways. The target is to achieve every year £500 million benefit from the £100 million investment.

Coby became the CIO of BA just after the September 11, 2001 attacks. It was also when BA was going through a ‘tough period’ with huge bad debts.

Coby’s IT initiatives to revamp the airline included a user-friendly BA.com Web site and self-service (for both staff and passengers) with online check-in, and an employee portal that allows staff to check rosters and print their own pay slips.

These measures, along with an overall cost-cutting drive, ensured that the airline turned profitable in 2006 after nearly 10 years.

Coby was voted the UK’s most influential CIO in the 2007 CIO50 list run by silicon.com of the CNET Networks, the UK-owned online publication for senior business decision-makers.

eWorld caught up with Coby during his visit to the aviation lab of Tata Consultancy Services in Chennai. Excerpts from the chat:

BA turnaround post 9/11

BA integrated IT into its business model and used it as a key element to drive business. There are no IT projects; there are only business projects.

This sounds obvious, but too often IT departments chase fancy new technologies and do not solve business problems. Post 9/11, the key business problem was staying in business with challenges from low-cost European carriers such as Ryan Air and EasyJet. These carriers used technology and the Internet as a core part of their business model. We fought back by building technologies.

What were these technologies?

BA developed calendar-led selling that combined the efforts of the IT department, which took care of selling tickets online; the revenue management team and the pricing people who developed new and competitive pricing strategies, and the marketing folks who took all these to customers.

An example of calendar-led selling?

If a person is travelling on March 15 between London and Delhi, the airline showed the cheapest fares and choice of flights, and colour-coded them.

This may not sound impressive today. But in 2002, it was a radical way to open up selling tickets to customers online and BA was the first to do it. To present information on the Web site for easy access by customers required some smart technology (all done in-house). These changes enabled BA to turn around the short haul business, and in 2006, the airline became profitable after a gap of 10 years.

Was the turnaround only because of technology?

Technology was only an enabler, and that’s the key point. BA leveraged technology to fight back.

Today, technology is at the heart of the airline. Cost-cutting and IT enabled BA to record profits in the first half of around £500 million. BA reduced its debts to £1 billion from £6 billion in 2001.

What, after selling tickets?

BA began using IT to sell tickets, which was a key strategy post 9/11. Having shown that technology could be used to take on low-cost carriers, BA developed Customer-Enabled BA. It was not called e-BA or programme BA.com, because it is not about technology but about enabling customers.

What is Customer-enabled BA?

It is about using technology to help a person facing a problem with the airline to ring up a call centre or go to the customer service desk. It is not about selling tickets, but making every interaction with customers online. BA has put up the entire frequent flight execution transactions online; was the first to have an online check-in; got customers to manage their bookings and allowed customers to change booking or book special meals in advance. Lots of airlines have elements of what BA does. BA tries to provide the whole journey experience — from thinking about travel to check-in at home; selecting the seat and getting the boarding pass. All this information is available at BA.com.

What has this meant for BA?

This enabled BA to develop a new concept for Terminal 5 — an exclusive terminal for use by BA at Heathrow to be inaugurated in March, in which Tata Consultancy Service was involved in testing. At T5, people will arrive ready-to-fly. Instead of doing all passenger-related processes at the airport, we will do it online. Four out of five (80 per cent) of passengers will have either checked-in online even before they arrive at the airport or use the kiosks.

IT systems — back-end facilities at T5

BA will invest £4.5 billion on T5. This includes around £80 million on IT, which will be a substantial investment. A lot of system pre-exists, and is on test at the existing Heathrow airport. At T5, there will be around 9,000 connected devices, including personal computers, and the length of wiring is so long that it will stretch from London to Istanbul and back again.

raja@thehindu.co.in

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