Air Transport World

A helping hand.

No longer just for Major carriers, IT outsourcing has become a vital cost-saver for Regionals

Regional airlines have become victims of their own success. Larger and more Sophisticated than their predecessors, many are dealing with the increased operational and labor costs that come with replacing turbo-props with regional jets by outsourcing IT functions to keep expenses down and create the more-efficient operations expected by their Major partners.

It's doubtful that Regionals ever will outsource entire departments on a grand scale--as Continental Airlines did by handing over all of its crew scheduling and planning to EDS or US Airways and US Airways Express did by having Sabre handle all of their reservations, yield management and maintenance inventory functions, to name a few.

Ron Stewart, lead partner at Andersen Consulting Global Airline Practices, sees a continued need for IT outsourcing, however. "The Regional carriers are a very logical, strong market for a few reasons," he says. "First, the cost of developing and supporting an IT infrastructure in-house is extremely high. Secondly, to offer the kinds of services their Major partners do, the Regionals will have to outsource IT to independent groups or the IT departments of the larger carriers."

The larger Regionals have some level of in-house IT functionality, says Stewart, but they've always relied to some degree on third parties to provide services such reservations and revenue accounting. …

Log in to your account to read this article – and millions more.