AVIATION AND INFORMATION TECHNOLOGY

AIRLINES

Airline use of information technology

Airlines use IT for a wide range of applications at all stages of the tourist experience,
including marketing, distribution, customer service and operations. In fact, modern airlines
would not exist without IT to ensure the efficient distribution and safe operation of flights.

The airline reservation system (ARS) is at the core of most modern airline IT systems.
ARSs interface with a range of decision support systems and departure systems to ensure
that reservations and passenger processing are handled efficiently. Most airlines also rely
heavily on information systems to support marketing and customer relationship
management (CRM). These systems are integrated or offered as part of a suite, such as
Amadeus’ Altéa. Once passengers are onboard a range of in-flight technologies enhances the
travel experience. The following sections discuss each of these applications in more detail.

Airline reservation systems

A passenger reservation system, or airline reservation system (ARS), is the most important
application of IT. At its core is a database of flight schedules and seat availability, fares and
rules and passenger information. An ARS shows the schedules for a single airline, whereas a
GDS shows many carriers’ schedules. Furthermore, ARSs are used by airline staff while
GDSs are used by travel intermediaries to source and book seats. It is important for an ARS
to connect to other systems such as GDSs and Internet booking engines (IBEs).
Interoperability is critical between airlines that are part of the same alliance. The ARS
typically interfaces with other systems using a standardized message format to book seats in
real time. A major goal of IATAs New Distribution Capability (NDC) is to facilitate
seamless connectivity with a common XML-based data transmission standard for
communications between ARSs, GDSs and travel intermediaries. Some airlines develop their
own ARSs but they are functionally complex and expensive to operate and maintain in-house.
Consequently, many airlines use a CRS hosted by the GDSs or third-party IT vendors.
Although each airline’s reservation system may have unique features, most functions are
similar and discussed below.

Flight schedules and availability

An important function of an ARS is to display flight schedules and availability in response to
the requests of passengers and intermediaries. Therefore an ARS has to interface with all
touch points where this information is needed, including the airline’s own website, third-party
websites, mobile apps, GDSs and traditional travel intermediaries. An airline’s availability
display shows all flights for a particular route (or city-pair) and the available seats in
different classes. The availability display usually includes the airline’s own flights and those
of code-share partners using the airline’s flight codes. If direct flights are not available the
availability display will show connecting flight options.

Fare quotes and rules

The Fare Quote System stores fares and rules for each booking class. Fare rules regarding
booking and ticketing deadlines, stopovers, maximum or minimum length of stay and
blackout dates are stored for each fare. Airlines typically divide seats into cabin classes (e.g.
first, business or economy class) and booking codes that contain different fare quotes and
rules. Booking codes are also known as booking classes or fare classes. A single cabin class
may contain several booking codes, which are shown on the passenger’s booking
confirmation and boarding pass. Different frequent flyer points are awarded based on
booking codes so this information must be communicated to the airline’s frequent flyer
system.

The combined set of fare quotes and associated rules is called a fare basis code (FBC). For
international itineraries, fares may involve multiple segments, multiple currencies, taxes and
sets of regulations. This requires the interchange of fare data between airlines, GDSs and
other intermediaries. Most of this fare data is distributed either by the Airline Tariff
Publishing Company (ATPCO) or Société Internationale de Télécommunications
Aéronautiques (SITA) using a common set of standards.

By combining scheduling and seat availability information with the Fare Quote System an
ARS provides the best fare for every seat. Real-time decision support systems, such as
schedule optimization systems and revenue management systems, determine the fares by
monitoring the demand and supply of seats and using algorithms to maximize revenues. Once
determined, these fares are fed into the ARS and GDS for display.

Passenger information
The third core function of an ARS is to store passenger information required for reservations,
check-in and other operational procedures. Bookings for individual passengers or groups are
stored using a passenger name record (PNR). A PNR contains the passenger’s name,
contact details, payment details, frequent flyer number and a record locator. The record
locator is a six character alphanumeric code used to access a reservation. The PNR also stores
special service requests (SSRs) such as seat preferences (e.g. aisle or window), special
meals (e.g. vegetarian, kosher, diabetic), wheelchair requests, and assistance for
unaccompanied minors. It is therefore important that the passenger information in an ARS
can be transmitted to other systems. For example, before a flight departs a passenger name
list (PNL) is transmitted to departure and gate control systems so that passengers can be
checked in and a flight manifest can be generated. Special service requests are transferred to
flight operations and catering systems while passenger data are transmitted to customer
loyalty databases to update frequent flyer accounts. Data from a customer loyalty database
may also flow to the PNR to populate fields with existing information and passenger
preferences. Data needed for financial systems and reporting are transmitted to back-office
systems.

Electronic ticketing
The final key function of an ARS is ticketing. Historically airlines required passengers to
travel with paper tickets to validate their reservation. Electronic tickets, or e-tickets, were
devised in the mid-1990s and became mandatory for all IATA airlines in 2008. Once a
reservation is confirmed, passengers are provided with a hard copy or electronic copy of their
e-ticket itinerary, which contains a record locator and itinerary details. An e-ticket itinerary
also includes the terms and conditions of carriage, fare and tax details (including the fare
basis code), fare restrictions and baggage allowances. The e-ticket allows the passenger to
check-in online or at the airport to obtain a boarding pass. Because of these different check-
in procedures an ARS must manage e-tickets at a number of touch points.

Decision support systems

Fleet management
The aircraft fleet represents a significant investment and investors expect profits. IT solutions
can optimize the use of the fleet as follows:

1. Fleet acquisition: an airline needs data to support decisions about what type, when and
how many of each aircraft to acquire. IT systems provide information such as operating costs
and profitability of different aircraft types on particular routes. This information is linked to
scheduling and revenue management data, although aircraft acquisition may also be based on
customer preferences.

2. Fleet assignment: the assignment of aircraft to routes should maximize profits while
ensuring the efficient use of the fleet. Computers model timespace networks to ensure the
optimal assignment of an airline’s fleet.

3. Fleet maintenance: safety regulations require close monitoring of the maintenance

schedule for each aircraft. Computerized systems ensure that all aircraft receive maintenance
checks at specified intervals. Databases contain information about each aircraft and the
maintenance schedule for individual parts. They generate reports so that checks and servicing
are not overlooked.

Fleet management systems are intricately linked with flight scheduling systems, as we will
explain below.

Flight scheduling systems

Flight scheduling is a complex task requiring route-planning to maximize an airline’s return
on investment in aircraft, terminal facilities and people. Route selection considers the most
profitable routes and the frequency of service on those routes. We can develop a better
understanding of the role IT plays in scheduling by adopting an input–output perspective.
The complexity of scheduling is due to the wide range of inputs that impact the airline’s
operation and its passengers, including:

- Strategic goals: strategic decisions such as which markets to serve, how to respond to
competing schedules and pricing, and access to resources such suppliers, employees and
terminal facilities can impact the long-term viability of routes.

- Route network: route networks ensure that aircraft utilization is maximized and
connections are convenient for passengers.

- Passenger demand: airlines use sophisticated revenue management models to project

demand for each route. Scheduling flights on high demand days and times optimizes load
factors and profits.

- Alliances: an airline must consider not only its own schedules but also those of alliance
partners so that connecting flights are convenient.

- Aircraft type: operating characteristics such as the capacity, range and fuel effi- ciency of
different aircraft, maintenance schedules and turnaround times all impact scheduling.

- Human resources: the availability of flight crew and industrial relations legislation governs
the working conditions of flight crew. Maximum shift durations, recuperation and
changeover of fresh crews need to be considered.

- Environmental and safety regulations: airlines and airports must comply with stringent
environmental and safety requirements, including inspections, maintenance schedules and
noise restrictions, which affect scheduling.

- Airport restrictions: curfews, congestion, air traffic control, landing slots and gate
availability can limit departure and arrival windows for a particular route. Some airports also
have physical limitations restricting the type of aircraft that can land.
- Contingency planning: exogenous and erratic factors such as weather, air traffic control
delays and technical failures must also be considered by scheduling systems.