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Tuesday, September 19, 2006

The 97.5% Airline

The case of southwest airlines leveraging technology in a judicious way is by now legendary. Almost a fortnight back, when I missed my flight SQ flight from Singapore to Bangkok, I decided to try my luck with Jetstar – as I had to reach Bangkok urgently and it happened to be the earliest flight to depart. Upon enquiry, I was pointed to the Jetstar counter for buying a ticket, where I noticed that the executive in the counter on seeing me and enquiring with me, carried a laptop, installed it and began to check for seat availability – I was amused( afterall we are used to seeing big big boxes used for all airline operations) and till I boarded the flight, I noticed that the airlines operated in a very lightweight model). I thought one day, I shall talk to them to find out about their technology strategy.Stephen Tame, CIO Of Jetstar, a budget airline in Asia Pacific region offers good insight in the way he manages his IT investments. I like his idea of simplicity and managing the IT costs in a pragmatic way – his emphasis on running a 97.5% airline looks very interesting. He finds that virtualisation provides them with the flexibility to deliver those applications outside of the Jetstar world to those areas where it needs to do business like in dealing with a lot of common user, or non-Jetstar equipped locations. He adds that by rolling out thin-client machines - again virtualising the applications, direct bottomline benefits could be realized and he is talking about benefits measuring to 60% in maintenance and management costs. His theory of increasing IT spend by 40% to 50% more every year while bringing the IT expenditure percentage down is quite interesting. From 1.6% of total revenue to 1.2% percent projected next year.
He is talking about possibility of losing systems at an airport for a day, and going manual at that airport and still being normal, is quite a task indeed. The pen as the technology and the enlightenment that IT can add complexity, it can add cost, and it doesn't always contribute to success is indeed very true in many organizations. End of the day IT ought to be tried where possibilities of significant synergies and efficiencies exist. The whole interview with good insights about outsourcing and managing with right metrics makes this a great read.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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