HC1041 Assessment 2: Impact of IT on Business

IT in Emirate airlines
Student name: xxxx xxx
Student ID: xxxxxx

Introduction
Information technology (IT) is considered as the core airline operation that presents high significant
impact to airline business operation and process. IT can involves both retaining the airline customer
loyalty and building the higher quality operation with cost competitive through employee
empowerment through IT support (Buhalis, 2004). Figure 1 shows the general airline operation
segment, which is divided into five sub-segments; market, sell, serve, operate, and flight. Each sub-
segment, IT can be involved to fulfil that requirements; such as using e-Commerce for selling ticket in
sell sub-segment (Shon, Chen, and Chang, 2003), using Big data technology to analysis the market,
passenger characteristic, competitive services based on the historical data of the airline for developing
the marketing strategies to gain competitive advantage (Erevelles, Fukawa, and Swayne, 2016) in
market sub-segment, using IT to support staffs to manage passengers efficiently (Clarke and Smith,
2004) and so on. In addition, Drummond (2015) identified the three main technology trends will
transform the airline operations; big data technology, social customer relationship management
(CRM), and switching to digital as on longer paper-based documentation.

Figure 1. Airline operation segment that require information technology to be emerged (reprinted
from www.sabreairlinesolutiouns.com)
Therefore, IT has significant impacted to airline industry in marketing and planning, customer sales
and service, and enterprise operations. In this report, the impact of IT on Emirate airline will be
discussed and evaluated the benefits, limitation, and potential for further development based on the
technology trends, and personal refection to this topic. Emirate airline was established in 25 March
1985 in Dubai, United Arab Emirates. This airline is invested by Dubais government fund and today
Emirate airline becomes the biggest airline in Middle East which has operated more than 3600
flights/week, more than 81 countries.

Impact of IT on Emirate airline

The major roles of IT in Emirate airline have been seen as substantial impact on the safety, efficiency,
capability and capacity, and environment, financial performance in airline industry (Hansman, 2005).
This means IT can be integrated in airline business process, as example as shown in figure 2. There
are three main process based on Emirate airline services; marketing and planning, customer sale and
services, and enterprise operations (Sabre, 2016). In marketing and planning stage, IT can help the
operator to manage, planning, analysis and evaluation toward the pricing setup, revenue prediction,
scheduling the airplane, managing cargo, and optimising the operation cost. IT will boost the efficient
and analysis the complex problems or large amount of data. Dynamic pricing strategy became critical
as the low-cost airline has price-leading competitive toward the full service airline these days
(McAfee and Te Velde, 2006). Due to maximise the profitable and revenue, the dynamic price will
response the market demand and gain the competitiveness. IT can help to analysis the most suitable
price due to the enterprises strategy and objective.

In customer sales and services, IT involves the online and offline reservation, customer services,
public relation, and advertising through social media, digital media, and so on (see figure 2). Figure 3
illustrates the current online reservation channel of Emirate airline on their website. Figure 5 present
the hybrid sale channels; including call centres, mobile, website, Kiosk, metasearch, OTA or online
travel agents, corporate, direct portal, agent through direct portal, and aggregator. The customer
service can be applied with technology such as complaint and compliments online form that can help
the customers able to communicate to Emirate airline rapidly with able to receive quickly response
(see example online form in figure 4). As one of modern airline transformation is going to digital,
online reservation, e-Ticket, web-services for third-party booking services (Roman, et al., 2005), and
so on. Finally, the enterprise operations stage, IT will help to manage the Emirate employees
schedule, flight operations, airport operation, and airplane maintenance. The role of IT in this field is
to store the information, communication across airport or outside the airline (sharing information),
and display using business intelligence (BI) technology (Anderson-Lehman, Watson, Wixom, and
Hoffer, 2004). Currently, there are many products, software and solutions available in the market that
airline can integrate the existing products into their business process. Another options is in-house
system development and deployment in case of there is no products match to their business process.
It can be concluded that IT became the core tools to manage, communicate, and analysis all business
functions in Emirate airline. The benefits of IT is to improve the operation speed, lower cost, and
capability to evaluate the complex problems toward to current high market competitive globally. Back
to the question Does Emirate airline business need IT? the definite answer is yes. In my opinion, IT
become the most important functions in airline business. The customer seeks higher technology
support, such self-service check-in, online-reservation, finding cheap ticket prices, no delay flight
operation, positive experience on board with wireless internet, and multimedia entertainment toolkit
as examples.

Figure 2. Overview of IT implementation on business process in Emirate Airline

Figure 3. Example of online reservation of Emirates airline (captured from
https://www.emirates.com/english/)

Figure 4. Complaints and compliments online form; (captured from

https://www.emirates.com/english/help/contact-emirates/fccm/feedback/complaint/)
 Figure 5. Hybrid sale channels for Emirate Airline (adapted from www.farelogix.com)

Significance of using IT in airline business

In some study found the positive correlation between the use of information technology and
profitability of anilines industry (Jawabreh, Allahham, Alrjoub, and Ahmad, 2012). In their
investigation and their recommendations to airline as conclusion of their study, the airline manager
should pay higher attention on IT investment as it has positive impact to financial performance. The
clear strategy on using IT should be established to move the whole business to be success. The use of
current technology to manage, communicate, and analyse can be perceived as immediate return,
however, some technology such as Internet of Thing (IoT) technology, the benefit will present in next
3 years (predicted from Marisa Garcia, Skift, 2012).

Therefore, the significance of using IT in Emirate airline business is depending on IT usage strategy
and what type of technology. For example, computer system, security system, have significant impact
to the business operation at the airport. Real-time financial monitoring and analysis can help the
airline to capture the failure, risk, and can provide troubleshooting to solve the problem on-time. In
addition, the technology is not only provide the convenience to customer and operators, the
technology can but also make the complex process to be simplicity (Dumas, Van der Aalst, and Ter
Hofstede, 2005). The clearest example of previous phase is self-check service. This can increase the
speed of check-in, reducing the task load to ground operators, and resulting in better customer
experience leads to the repeat purchasing or higher customer retention. Figure 6 presents the example
of self-check-in kiosk and trend of using technology in check-in process.
Figure 6. Example of self-check-in kiosk (left) and the trend of self-check projection in 2018 (right)
(image captured form business insider, SITA airline stats, 2016).

Figure 7. Mobile technology for scan ticket (left) and on-flight free Wifi for Emirate passenger (right)
(captured from http://www.flightcentre.com.au/travel-news/travel-news/emirates-announce-new-
aircraft-free-wi-fi-new-route-technology-first)

Requirements to IT implementation into Emirate airline

The information technology infrastructure is physically required in prior to installation of software,
system and other solution. For example, the connectivitys includes wireless, mobility, network, data
servers, fibre optic for fast internet connection, firewall, security system, data backup, and so on.
Moreover, the IT speciality should be recruited to support and maintained the infrastructure to be
ready to use all the times. The IT infrastructure should be designed by the experts or IT Consultant
Company to ensure the most effective IT infrastructure will be deployment in either airport or airline.
Once the physical infrastructure has setup, the airline management solution can be implemented. The
example case from IATA shown in figure 8. The orange boxes are the software system, the grey boxes
are integration layer, and green boxes is the software platform. Before using the system, the staff must
be trained to ensure they can use it efficiency and minimise the mistake during operation.
In case of Emirate airline, Emirate recently signed the massive contract with IBM for 10 year services
agreement and cost $300 million (Reuters, 2016). This can be said the cost of IT infrastructure can be
very high depending on the business size. Emirate as the biggest airline in Middle East, $30 million
per year has been invested for IT infrastructure and services.

It is not IT itself important, the users (as airline staffs) are very important to drive the use of IT to be
maximise the benefits. All staffs must attend the training (both knowledge, and practical training) to
make sure they can use the system and serve the need of customers with IT support. Note that, IT is
the tool to support the business operation, if the staffs cannot use the IT proficiency there is no point
to install the high performance IT infrastructure and solution with high cost. The cost of IT for airline
industry is very high in the market, with less specialist developers, lower competitive in IT providers,
and massive users.

Figure 8. NDC reference architecture for airline (captured from

http://startndc.iata.org/architecture.htm).
Benefits of using IT in Emirate airline
IT obviously benefits the airline business and industry as allows the business process, airline staffs,
and even customers to operate the process more efficiently and can optimise/accelerate the revenue.
Rapid communication, processing, storing digital information and higher security protection can
advantage to airline business. Smarter application and software gave airline business to manage their
day-to-day operation more efficient. The top benefits of using IT in airline business can lead to storing
and protecting information, automated processes, work remotely, and faster communication. The
technology also change the way of customer interact with airline company; nowadays, customers
trend to interact to company via online channel rather call through call centre or kiosks. The
automated process can reduce the cost of high number of staffs to be hired to sufficient serve the
customers. With IT the airline company can reduce the number of staffs in the future (lower operation
costs). More varieties sales channels provides the borderless to Emirate airline can direct sale to the
end users. The customers can access the up-to-date information; ticket prices, flight information,
news, and promotion through website. Importantly, the IT can increase the information security,
privacy and protection with high performance network security and data encryption technology.

Conclusion
Information technology (IT) becomes one of the critical tool and factors in business success today.
This report discussed the role of using IT in airline business, benefits, requirement of IT
implementation, significant to airline business process, as well as demonstrate the example of Emirate
airlines who applied IT to improve their process. The airline business process is huge process that can
be grouped into three main stage; marketing and planning, customer sales and services, and enterprise
operations. The key benefits of using IT in airline business includes turning manual process to
automated process (i.e. self-check-in), turning paper-based to digital (i.e. online reservation and e-
Ticket), comprehensive analysis on complex data (i.e. Big data in airline), rapidly communication
between enterprise and customers (i.e. live chat on airline website, automatic form), and so on. The
requirements of IT implementation includes IT infrastructures, equipment, staff training, usage
policies, and IT maintenances staffs. To sum up, in my opinion, IT will play an important role in
Emirate airline business and will change the way Emirate airline conduct the business in the future.

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