Let’s Build a

Smarter Planet:
Airlines

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Headwinds, horizons and hope—competing on a smarter planet.

HEADWINDS
While recent forecasts suggests an industry wide recovery is underway, 2008-09 may have
changed the airline industry forever.

HORIZONS
There are now, and will continue to be, growing opportunities to capture and
transform data and to use the resulting information in new and powerful ways.

HOPE
For airlines, those horizons can be leveraged to create new strategies,
capabilities and insights to drive competitiveness and long-term viability.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Strong headwinds are setting global airline industry profitability back.

AT THE TOP LINE

 Current predictions are for 2009 passenger revenues to be off by nearly 16%, with cargo
revenues off nearly 18%. By midyear, average international ticket prices had fallen 19%
YTY, while 21% fewer premium passengers were flying.
AT THE COST LINE
 While some have benefited positively from hedging positions, fuel price increases of 56%
from their YTD low, airline service costs growth to over US$54B worldwide, imbalances in
capacity and pending environmental regulation all promise even more cost line concerns.
AT THE BOTTOM LINE
 Average yields have cratered by over -12% for passengers and -15% for freight; and despite
a reduction in capacity, ever-growing break-even load factors are not being met. The
industry has already lost US$6B (1st half estimate) and is positioned to nearly double that by
year-end.

© 2010 IBM Corporation

 RPK AND FTK % CHANGE

30%
35%

15%
20%
25%

-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
40%
AUG 07
SEP 07
OCT 07
NOV 07
DEC 07
Let’s build a smarter planet: Airlines

JAN 08
FEB 08
MAR 08
APR 08
MAY 08
AND CARGO GROWTH

JUN 08
JUL 08
AUG 08
SEP 08
OCT 08
NOV 08
DEC 08
JAN 09
FEB 09
ASIA-PACIFIC INTERNATIONAL PASSENGER

MAR 09
APR 09
MAY 09
JUN 09
Asia-Pacific is enjoying robust demand growth.

JUL 09
AUG 09
SEP 09
OCT 09
RPK GROWTH

NOV 09
DEC 09
JAN 110
FEB 10
MAR 10
APR 10
MAY 10
JUN 10
FTK GROWTH

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Top-line performance is also being bolstered by the gradual return of

business and premium travel categories.

Globally, companies that cut back on business travel are spending once again:
 In 2009, 93% reported a reduction in their companies’ travel spending (ACTE Survey, March 2009)
 1 in 3 managers expect spending to increase in the next 12 months (AirPlus Business Travel Index, August, 2010)
 69% reported reductions in overall travel budget (HBR Survey, July 2009)
 6.2% increase in global business travel spending expected in 2010 (NBTA Foundation , August 2010)

And companies are also spending more on premium class air travel:
 65% of travel managers stated that they had made changes to their existing
travel policy to reflect specific spending limitations (ACTE Survey, March 2009)
 10% of business travelers fly Business Class, compared to 8% in 2009 (AirPlus Business Travel Index , August
2010)
 47% reported use of less expensive class of travel (HBR Survey, July 2009)
 33% of travel managers expect an increase in spending in 2010 (AirPlus Business Travel Index , August 2010)

But not all markets are expected to enjoy uniformly robust corporate travel recovery:
 Japanese manufacturing sector continued to slow in 2H10, putting downward pressure on
corporate travel
 Industrial growth in India slowed to in June to just 7.1% which may dampen business travel demand
 Despite output growth from several countries in Western Europe, uncertainty about the speed and
shape of the economic recovery in the rest of Europe will depress demand, including demand for
business travel

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

One important threat to business travel is the emergence of virtual

alternatives to physical travel, such as telepresence.

Surveys show the challenging economic environment drove higher substitution:

 60% of respondents had cut travel through remote conferencing use (BTN Survey, July 2009)
 79% reported greater use of conference calls, WebEx, and telepresence (ACTE Survey, June 2009)
 44% surveyed believed that video conferencing would increase in use, and 71% felt that
telepresence was more time-efficient than face-to-face meetings (HBR Survey, July 2009)

And some analysts are spelling out the direct impact to airlines:
 Gartner: telepresence will replace 2.1 million airline seats per year by 2012 (Gartner, Feb 2009)
 Haddock Research: 35% – 40% of airline seats for American business travel are threatened
by telepresence (Haddock Research & Branding, May 2009)

And business travel suppliers are getting on board!

American Express Corporate Travel’s Virtual Meetings eXpert

“Based upon criteria such as price, duration of trip, purpose, environmental impact and
more, the solution will alert travelers at the time of booking on available telepresence
and high-end virtual meeting options, and guides them through scenarios that
determine if it makes sense to take the trip virtually.”

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Air travel is also under threat from high-speed rail which is perceived
as more convenient, greener and competitively priced.

80% Share of Madrid-Seville

market – AVE

70% Estimated share of UK 3-hour

domestic market – SNCF

63% Share of Korea

market – KTX

60% Share of Tokyo-Akita

market – JR East

50% Decline in inter-city

flights – THSR

46% Share of Madrid-Barcelona

market – AVE

“An airplane on wheels”

Air France-KLM Chairman, Jean-Cyril Spinetta on the TGV.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

From a cost-line perspective, the new unknown will be environmental

costs for greenhouse gas emissions, which will have a further impact
on premium demand as costs are passed on to passengers.

15% ADDITIONAL COSTS FROM ETS ALONE

2012 COST FOR CARBON CREDIT PURCHASES
Anticipated shortfall (77M tons of CO2)
DELTA
in allowances for airlines from EU Carbon
UNITED
Trading Scheme in 2012 (estimated to
cost US$1.4 – $1.6B to the industry and BRITISH

adding an average cost per ticket of RYANAIR

US$13+ to a short-haul flight and US$60 QANTAS
for a long-haul flight). CONTINENTAL

EASYJET

US$7B THAI

AMERICAN

Expected annual cost to airlines to AIR FRANCE/KLM

meet global IATA commitment for
$0 $10 $20 $30 $40 $50 $60 $70 $80
carbon neutral growth in 2020.
US$ MILLIONS

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Meanwhile, higher fuel and airport services costs may compound the
issue and increase average costs or cost volatility.

JET FUEL PRICE TREND GLOBAL LANDING FEES

Singapore Kerosene-Type Jet QUARTERLY CHARGES TO AIRLINES
Fuel Spot Price (Cents per Gallon)

3 50 160
Airport service charges
collectively accounted
for nearly 8% of AP
airlines operating costs.
3 00 150

140
2 50

130
2 00
On a global basis, Jet Fuel is 120
down almost 30% from 2008
150 and up 25% from 2009 to 2010
110

100 100
4Q06

1Q07

1Q08

1Q09
2Q07

3Q07

4Q07

2Q08

3Q08

4Q08
50
2000 = 100

0
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

These headwinds make it difficult to predict future performance.

GLOBAL INDUSTRY PROFITABILITY

TOTAL INDUSTRY PROFIT/LOSS PAST 20 YEARS

$15

$10

$5
2010 forecasts
US$ BILLIONS

are positive
$0

-$5

-$10

-$15

-$20
1989

1990

1991

1992

1998

1999

2000

2001

2002

2003

2004

2008
1993

1994

1995

1996

1997

2005

2006

2007

2009

2010F
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

Bigger is NOT always better. Smarter is better

Inverse Relationship Between Size and Profitab

INVERSE RELATIONSHIP BETWEEN RELATIVE SIZE AND PROFITABILITY
Relative size and profit performance in 2008-09 for 163 global airlines 1,2,3

20.00% Smaller carriers tend to limit

COPA Airlines
Republic Airlines
complexity and maintain
Allegiant Air higher prices in less contested Large carrier performance is
15.00% Air Arabia regional markets limited to relatively modest
Air Wisc onsin profitability large performance
Air Asia variations year to year
Profitability in 2008-2009

10.00%
Emirates Airline
Qantas
5.00% Southwest Airlines

Lufthansa
Cathay Pac ific ANA - All Nippon Airways
0.00%
0.00 5.00 Air Canada 10.00 15.00
British Airways

-5.00% Americ an Airlines

Japan Airlines Int’l

US Airways
-10.00%
United Airlines
Austrian
1
Data collected from airline annual reports and industry fleet data from IATA, IBM Analysis
2
-15.00% Relative size is a composite measure of 08/09 Revenue and total current seat capacity
3
Trend line is a 5th degree polynomial function that accounts for only a portion of the variation in the data
China Eastern Airlines © 2010 IBM Corporation
Let’s build a smarter planet: Airlines

Looking ahead, the horizon is increasingly clear…

The world is becoming smaller and flatter,

but also smarter.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

The reality of living in a globally integrated world is upon us.

 Frozen credit markets and limited access to capital.

 Economic downturn and future uncertainty of economic growth.
 Environmental sustainability challenges and looming global regulation.
 Oil and fuel volatility and long-term cost escalation.
 Information explosion, channel proliferation and loss of market-making power.
 Emergence of indirect substitutes and alternatives to travel.
 Changing travel demand and shifts in buying behaviors.
 Consolidation and contraction of capacity.
 New customer demands and business models.

The world is connected:

economically, socially and technically.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines
The need for progress is clear.
$27.8 billion
Projected global airline industry losses
in 2008 and 2009 combined.
3% or 13%
Airlines generate 3% of all greenhouse gas
emissions. Some say that because aircraft
operate in the upper atmosphere, the impact is
equivalent to 13% of emissions from all
sources.
60% and -19%
60% of consumer sentiment around
the U.S. airline industry is negative,
and there are 19% fewer brand-loyal
travelers in 2008 than in 2006. This
is a recipe for commoditization.
$3 billion
Estimated cost to airlines
of mishandled baggage.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

The opportunity for progress is clear.

7 billion / 6 billion 80% downtime reduction

Increased demand IT management

By 2020 there will be global demand for An Asian airline implemented an enterprise-wide
7 billion air passenger trips. Yet airports and IT issue management solution, ultimately saving
airlines will only have capacity for 6 billion. millions of dollars, reducing risk and maintaining
(Organization for Economic Cooperation and Development) its reputation as a reliable, premium air carrier.

1.5% per year 60% improvement

50% by 2050 Baggage handling

Airline industry environmental impact targets A European airport reduced mishandled

baggage by 60% using an innovative
1.5% average annual improvement in RFID-based solution.
fuel efficiency from 2009 to 2020.
Cap aviation CO2 emissions from
2020 onwards (carbon neutral growth).

50% reduction in CO2 emitted by 2050

relative to 2005.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

The mandate for change is a mandate for smart.

The infrastructures, systems and processes that underpin

how business and society function are becoming
digitally aware, interconnected and infused with intelligence.
The new intelligence applies to how services are delivered, to the movement of people, freight,
money, information and electricity, and more. Each represents a chance to do something
better, faster and more productively.
This is a new frame of reference with enormous promise for economic growth, with
opportunities to think and act in new ways.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines
Demands on airlines will increase over time, driving the need for
new intelligence and insight, greater connectivity and transparency,
and improved customer service.
DRIVERS OF CHANGE
Population explosion
World population is growing and
transportation providers will need
to expand capacity to keep up.
Urbanization
As the number and size of cities
grows, pressure on transportation
systems to move people and
materials between and within
those cities grows.
Globalization
The growing interconnectedness
of the world is driving inter-city
and international growth in
demand, with an expectation
of improved service.
Technology
Technology now enables the
capture and analysis of real-time
information about the status,
location and condition
of everything.
CHALLENGES
Capacity and congestion
How to meet the growing,
changing demand efficiently,
consistently and profitably?
Empowered customers
Deliver transportation choices in
the way that end customers value.
Efficient, green operations
How to reduce dependency on
scarce resources while reducing
environmental impact?
Safety and security
How to unobtrusively reduce
exposure to security risks and
increase the safety of operations?
STRATEGIC IMPERATIVES
Predict demand and
optimize capacity
and assets.
Dramatically improve
the end-to-end customer
experience.
Improve operational
efficiency while reducing
environmental impact.
Assure safety and security.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

Success on the new horizon depends on deeper, more holistic and

informed planning, collaboration and execution. Airlines will need to
become smarter.

PREDICT DEMAND AND IMPROVE THE END-TO-END

OPTIMIZE CAPACITY AND ASSETS
Predict demand, align transportation
asset and infrastructure deployment
and continuously adapt operations.
CUSTOMER EXPERIENCE
Understand customer needs
and provide information and
services to meet those needs
in the manner preferred.

AIRLINE

IMPROVE OPERATIONAL ASSURE SAFETY

EFFICIENCY WHILE REDUCING
ENVIRONMENTAL IMPACT
Continuously balance cost and
environmental impact of scarce
resource use while exploring new
operational alternatives.
AND SECURITY
Leverage new sources of
information and new ways
of using that information to
improve security and safety.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

They will do so by becoming

instrumented, interconnected and intelligent.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

INSTRUMENTED
We now have the ability to measure, sense and
see the location and condition of everything.

 Today there are over 1 billion transistors for each

person on the planet.
 By 2010, 30 billion RFID tags will be embedded into
our daily life, communicating across entire ecosystems.
 Modern aircraft have thousands of sensors and devices
to monitor and/or record flight data, engine performance,
navigational readings, external atmospheric conditions,
cabin environment, aircraft structural performance and
passenger service systems (e.g. galley, in-flight
entertainment).
 Today, more than 3,000 aircraft from 14 countries
globally, including 19 airlines, produce 240,000 –
260,000 atmospheric readings for use in global weather
forecasting. (Aircraft Meteorological Data Relay program)

The world is becoming more instrumented:

aircraft, airports, supply chains and more.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

INTERCONNECTED
People, systems and objects can communicate
and interact with each other in entirely new ways.

 The Internet is now over 1 billion people strong.

By 2011, one-third of the world’s population will
be on the Web.
 There are currently nearly 4 billion mobile phone
subscribers worldwide.
 Pervasive communication channels including WiFi,
Bluetooth, 3G, radio frequency and the Internet make
connecting to and transmitting data from sensors and
instruments constant and ubiquitous.
 Frankfurt, Heathrow, Manchester, Luton and Leeds
Bradford airports all use non-invasive scanning of
passenger Bluetooth devices to track passenger
behavior and airport performance.

The interconnection of people and things—

passengers, employees, aircraft, airlines,
airports, suppliers—has become pervasive,
creating the ability to improve performance.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

INTELLIGENT
We can respond to changes quickly,
accurately and securely—and get better
results by predicting and optimizing
for future events.

 An average company of 1,000 employees

spends US$5.3 million a year to find information
stored on its servers.
 Every day, 15 petabytes of new information are
generated—more than 8 times the information
in all U.S. libraries.
 By 2010, the average aircraft will contain over one
billion lines of software code to drive automation and
operational intelligence.

Instrumented and connected objects and

processes communicate with sophisticated
analytic systems that enable patterns to be
recognized, relationships to be drawn and
decision-making to be continuous and
near real time.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

+ + =
An opportunity for airlines
to think and act in new ways.

Predict demand Improve operational Improve the end-to-end Assure safety

and optimize efficiency while reducing customer experience. and security.
capacity and assets. environmental impact.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines
Hope: Making airlines smarter
SMART IS: Optimizing capacity and assets
Predict demand and optimize assets and
infrastructure both long-term (e.g. aircraft) and
short-term (e.g. dynamically aligning routes,
schedules and maintenance).
SMART IS: Efficient and environmentally sound
Improve operational efficiency while reducing negative
environmental impacts by monitoring resource use and
impact in real time, collaborating with partners and
operators both vertically and horizontally.
SMART IS: Innovation
Establish a culture of continuous innovation in each of these dimensions to drive competitive advantage.
SMART IS: Improving the customer experience
Know your customer, interact with that customer in
their preferred style and manner, and differentiate
your services to exceed their expectations—
profitably.
SMART IS: Assuring safety and security
Assure and continuously enhance safety
and security through non-invasive continual
monitoring of journeys, assets and
infrastructure with real-time notification of
risks, issues and safety/security events.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines
Predict demand and optimize capacity and assets.
A U.S.-based airline uses a Maximo enterprise
asset management and MRO solution to increase
reliability and availability while reducing
maintenance and materials cost. Streamlined
maintenance processes have reduced delays and
decreased material and maintenance costs.
Netherlands Railways uses ILOG software to
weigh 56,000 variables—including available assets
and passenger demand—to assemble and
schedule over 5,000 trains per day, realizing a 6%
saving in operating efficiency and saving
US$28.5M per year. Also improved on-time
performance by 2%, helping capture an additional
US$57M in fares.
A Middle Eastern container shipping firm uses a
fleet of 300 vessels servicing 400 ports worldwide.
By using advanced analytics to optimize the
location and movement of its 200,000 containers,
IBM Research helped them cut empty container
movement costs (~10% of turnover) by 10%.
A Southeast Asian port uses IBM ILOG software to
produce their loading plan in less than 30 minutes.
A European airport was able to predict passenger
volumes up to seven days in advance, with an
accuracy of >90%, using IBM’s PaxFlow Simulator.
The solution enables airports and airlines to optimize
costs according to forecasted service levels, identify
passenger volume for future business opportunities
and minimize passengers’ idle waiting time.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines
Improve the end-to-end
customer experience.
A major European airport, in partnership with an
international airline, reduced mishandled baggage
by 60% by implementing an RFID-based baggage
handling system. They have reduced transfer time
by 22% and operational cost by 40%.
Air Canada introduced an innovative application
for the Apple iPhone and iPod Touch, allowing
passengers to book flights, download electronic
boarding passes, check-in, receive flight status
updates and book rental cars and other services.
There were over 30,000 downloads of the
application from 47 countries in the first six days.
Improve efficiency while
reducing environmental impact.
COSCO, a global shipping firm, engaged IBM to
help optimize their supply chain using the Supply
Chain Network Optimization Workbench (SNOW).
As a result of the three month engagement, COSCO
consolidated from 100 to 40 distribution centers,
lowered logistics cost by 23% and reduced CO2
emissions by 15%.
Atlas Air Worldwide Holdings used SOA and a
Business Process Management solution to improve
their ability to choreograph the complex movement
of crews, aircraft and cargo, increasing operational
efficiency. They expect an 80% reduction in the
cost of integrating operations with strategic delivery
partners, a 50% time savings and a 30%
application development cost savings.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines
Assure safety and security.
A U.S. hub airport implemented a digital video
surveillance solution and a security command and
control center. The system also uses information
from biometric handprints and badge readers. The
system is more effective at recognizing risks and
alerting the command center. The effective labor
cost savings is US$2.2m per year.
A major Asian airline implemented an enterprise-
wide maintenance and parts management solution to
replace approximately 40 systems. The primary
objective was to improve maintenance quality and
cross-department collaboration through the use of
standard processes, real-time data availability and
reduced opportunity for human error.
Through the use of RFID tags on parts and containers,
IBM has helped a major aircraft manufacturer intelligently
track aircraft parts throughout the product’s entire life
cycle including all maintenance conducted on it and the
plane in which it is used. The solution has allowed them
to be more responsive to customers, and reduce fleet
maintenance down-time without compromising safety.
Using biometrically enabled access to collect and
verify traveler identity information as early as
possible, a collaborative cross-industry pilot was
successfully conducted to re-use the information
throughout the remainder of the airport journey,
facilitating easier air travel while maintaining high
standards of security and identity management.
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

The smart air transportation system is, in fact, an ecosystem—

integrated around a set of information, processes and technology.

Participants collect, share and analyze information to generate new insights:

 Passenger journeys
 Freight shipments Airlines
 Location and
Governments OEMs and suppliers
condition of assets
 Usage patterns
Freight and logistics
Passengers service providers

Freight customers Regulators

Information

Processes
Influencers: Travel service providers
Associations and
universities Airports
Technology

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

The value they can realize through collaboration extends across

the entire air transportation ecosystem.

Predict demand and optimize Improve the end-to-end

capacity and assets. customer experience.

Improve operational Assure safety

efficiency while reducing and security.
environmental impact.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines
The value they can realize through collaboration extends across
the entire air transportation ecosystem.
Predict demand and optimize
capacity and assets.
 Increased capacity, asset
and resource utilization
 More effective supply chain
management
 Increased cost effectiveness,
aircraft turns, process
efficiency and quality
Improve operational
efficiency while reducing
environmental impact.
 Lower operational costs, fuel
consumption and noise pollution
 Reduced fuel use and emissions
 Regulatory compliance
Improve the end-to-end
customer experience.
 Increased customer satisfaction,
loyalty and safety
 Fewer delays and disruptions
 More effective marketing,
promotion and loyalty programs
Assure safety
and security.
 Improved control and oversight,
flow management, verification
and flexibility
 Quicker, more informed risk
assessment and decisions
© 2010 IBM Corporation
Let’s build a smarter planet: Airlines

Why must we take action now?

Airlines must conserve cash today, attract and retain loyal customers,
align capacity with demand and innovate for growth.

Four strategic imperatives for growth:

 Predict demand and manage capacity to optimize all assets and infrastructure.

 Improve the end-to-end customer experience—attract and retain loyal customers.

 Operate efficiently and profitably while minimizing environmental impact.

 Assure safety and security.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Recessional economic principles and the role of IT:

Companies that have had superior performance through recessions have:

 Cut the right costs
 Migrated from fixed to variable costs
 Increased automation
 Identified and focused on key customers
 Marketed to growth areas
 Invested when competitors didn’t
Technology spending has collided with current economic conditions as IT organizations have
failed to enact agile IT economics. The pressure is on to cut IT.
In 2008, the U.S. Fortune 500 had perhaps US$9.4T of operating expense and US$511B of
tech expense. Operating expense dwarfs the cost of IT. Even if IT were “free,” the savings
would not provide the needed lift.
The single biggest opportunity for organizations to reduce operating expense is through
targeted technology investment.

Source: Dr. Howard Rubin – CEO Rubin Systems/Rubin Worldwide, MIT CISR Research Associate, Gartner Senior Advisor
Source: Study of 400 companies during the last recession by Diamond Management and Technology Consultants

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

We’ve only just begun to

uncover what is possible on
a smarter planet.

The infrastructures, systems and processes that

underpin how business and society function are
becoming digitally aware, interconnected and
infused with intelligence.
The new intelligence applies to how services are
delivered, to the movement of people, freight, money,
information, electricity, and to how billions of people
live and work. Each represents a chance to do
something better, faster and more productively.
This is a new frame of reference with enormous
promise for economic growth, with opportunities
to think and act in new ways.

Let's work together to drive real progress.

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

The value they can realize through collaboration extends

across the entire air transportation ecosystem.

Increased customer Lower operational costs, fuel

satisfaction, loyalty and safety consumption and noise pollution

Fewer delays and disruptions Increased cost effectiveness, aircraft

turns, process efficiency and quality

Improved control and

More effective supply
oversight, flow management,
chain management
verification and flexibility

Regulatory compliance Increased capacity, asset and

resource utilization

Quicker, more informed Reduced environmental impact

operational decisions

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Airlines and airports play a unique and critical role: together,

they are the point of connection between end users and
the broader ecosystem.

Governments

OEMs and suppliers

Airlines
Freight and logistics
Passengers
service providers

Freight customers Regulators

Airports
Travel service providers

Influencers:
Associations and
universities

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

To fill this role effectively, smart airlines and airports will apply
intelligence to a spectrum of functions which they perform.

Airlines
 Provide comprehensive, integrated
planning, routes and schedules
 Offer access to continually updated
 Analyze historic and real-time data to
travel and shipment options
predict demand and terminal traffic
 Monitor plane and cargo condition
 Plan investments and operations
and location in real time
to optimize efficiency, service and
environmental impact
 Provide immediate notification
 Facilitate multi-modal travel of disruptions and delays
 Monitor resource use and
and transport options
 Track flows of passengers, environmental impact in real time
baggage, freight in real time
 Boost security while removing
friction points Airports

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

IBM’s solution strategy is aligned with the needs of airlines

AIRLINES ARE FOCUSED ON… IBM IS INVESTING IN…

Predicting demand and Demand and revenue management, irregular

optimizing capacity operations management, enterprise asset
management and MRO, business intelligence
dashboards, crew scheduling

Delivering customer-driven Reservation system modernization, Multi-channel

products and services self service, one view of the customer, customer
analytics, CRM, loyalty management, cargo mgmt

Operating efficiently and Enterprise asset management, enterprise

profitably while minimizing infrastructure management, green supply chain
environmental impact optimization, carbon management

Assuring safety Digital video surveillance, biometric identification,

and security identify and access mgmt, risk analytics, condition
based monitoring using wireless sensors

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

© 2010 IBM Corporation

Let’s build a smarter planet: Airlines

Trademarks and notes

IBM Corporation 2009

 IBM, the IBM logo and ibm.com are registered trademarks, and other company, product or
service names may be trademarks or service marks of International Business Machines
Corporation in the United States, other countries, or both. A current list of IBM trademarks is
available on the Web at “Copyright and trademark information” at
www.ibm.com/legal/copytrade.shtml
 Adobe, the Adobe logo, PostScript, the PostScript logo, Cell Broadband Engine, Intel, the
Intel logo, Intel Inside, the Intel Inside logo, Intel Centrino, the Intel Centrino logo, Celeron,
Intel Xeon, Intel SpeedStep, Itanium, IT Infrastructure Library, ITIL, Java and all Java-based
trademarks, Linux, Microsoft, Windows, Windows NT, the Windows logo, and UNIX are
trademarks or service marks of others as described under “Special attributions” at:
http://www.ibm.com/legal/copytrade.shtml#section-special
 Other company, product and service names may be trademarks or service marks of others.
 References in this publication to IBM products or services do not imply that IBM intends to
make them available in all countries in which IBM operates.

© 2010 IBM Corporation