Air Transport World

Matching planes to people: [D.sup.3] or Demand-driven dispatch should boost revenue through better match of supply and demand, so why aren't more airlines attempting to put it into practice? (Asset Management).

Long after information-based service firms began using corporatewide software to link business functions, even tech-savvy airlines still employ the silo approach to IT. This is so even though the technology and processing power required to turn once-huge projects into a few hours of work are standard.

That is not the reason for airlines still relying on outdated systems, however. American Airlines Director-Operations Research Tim Jacobs explains that "early on, technology limited integration, so business functions defined the silos. The view was myopic." Richard Eastman, head of The Eastman Group, agrees: "The legacy systems mandated silos of processes ... that became silos of information... that became silos of management.

Indeed, Jacobs suggests, on an integration scale of zero to 10, "even the most sophisticated airlines are still at one or two." Why? Several answered "inertia," and the bigger the airline, the greater the inertia. Departmental managers protect empires and bosses permit this to occur.

A good place to start dismantling silos is through integration of scheduling and revenue management. The latter forecasts loads for already-established schedules, then allots seats among fare classes to optimize revenue. These departments now report to the same manager at some airlines, but that may not produce optimum results. …

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