The long-awaited switchover from airlines running their own in-house legacy reservations platforms is well underway as they shift to next generation systems developed and often run by commercial IT houses, according to a report from UK-based airline IT consultancy Travel Technology Research (T2R). "We are witnessing the end of an era as even the most conservative airlines in Asia decide to give up doing it for themselves," says Richard Clarke, director of T2R.
Although more passengers are boarded by airlines operating their own in-house mainframes (see chart)than any other technology today, within three years this will change as more turn off these legacy systems. "Twenty years ago this was the standard model for any airline that could afford it," says Clarke. "Airlines maintained large IT departments with development capability and used them to deploy unique solutions they believed gave a competitive advantage in the market.
MARKET SHIFT
"Few airlines today have the capability - or the desire - to develop and deploy the very large scale IT systems used to manage their inventory, reservations and departure control," he says. "Of the 700 airlines tracked by T2R only 28 continue to own and operate a passenger services system based on mainframe technology. A further 55, mostly small, airlines are hosted by a larger neighbour using the spare capacity in its in-house system."
By 2012 T2R estimates that as large carriers like Singapore Airlines, Cathay Pacific Airways and Saudi Arabian Airlines move to new systems from vendors like Amadeus, the market share of in-house mainframes will drop into second place behind Sabre. "Cathay Pacific and Singapore Airlines have both decided to give up their proprietary mainframe systems and we expect that airlines in Korea and Taiwan will soon follow. The Japanese majors will probably be the only airlines committed to in-house systems within five years," says Clarke.
T2R tracks about 35 companies that offer these systems. According to Clarke: "Amadeus is establishing a clear leadership position with the network airlines but has yet to make any significant impact with the low-cost and hybrid carriers. Sabre has had stunning success in serving low-cost carriers that are moving into the more complex hybrid space," he says. "Navitaire has grown strongly on the back of the growth in low-cost carriers but must be concerned about its failure to hold on to some of the biggest ones as they move towards a hybrid model." JetBlue Airways and WestJet recently announced they would be switching from Navitaire to Sabre systems.
Amadeus is known to be in advanced discussion with several major airlines, including two of its owners Air France and Iberia. If it is successful with these it will leapfrog Sabre into first place and push the in-house systems back to third.
For more on Amadeus and Sabre's moves to develop new distribution technology see: flightglobal.com/ITFrontline
Source: Airline Business
