insight newsletter - December 2009

Southwest Airlines is the first U.S. airline to optimize its revenue accounting with Lufthansa Systems’ Sirax AirFinance Platform. The implementation of the product, which can improve efficiency and help achieve cost savings through precise revenue accounting has been successfully completed. Other leading carriers who deployed the Sirax AirFinance Platform were able to reduce their operating costs by up to 45 percent.

The Sirax AirFinance Platform from Lufthansa Systems is the first integrated platform to optimize all the financial processes of an airline. By checking ticket sales against actual flight data, the highly automated system speeds up the accounting process. Sirax also helps to control processes that involve a variety of complex rates, codeshare agreements, alliances, as well as taxes and fees. It delivers precise, timely information for the management and the accounting division of an airline. Sirax also provides data on route and network revenue.

Other renowned airlines such as Lufthansa, Air France-KLM and Scandinavia’s SAS Group have already selected the Sirax AirFinance Platform. Worldwide more than 400 million coupons annually or twelve percent of all tickets are processed with Sirax.

Etihad Airways, the national airline of the United Arab Emirates, has announced an agreement with Lufthansa Systems which will see the airline use the industry-leading flight planning solution Lido/Flight.

As a result of the contract the Abu Dhabi-based airline will be able to optimize its operations by significantly reducing its fuel costs and emissions, while also benefiting from more efficient flight planning processes. Drawing on its own powerful database, Lido/Flight uses a number of parameters to calculate the optimal route for each flight, which can lead to fuel savings of up to five percent.

The agreement with Lufthansa Systems includes a number of add-ons to Lido/Flight such as Traffic Flow Restrictions (TFR), Inflight Monitor (IFM), and FreeFlight. Etihad already uses the NetLine/Plan and NetLine/Sched solutions for planning and scheduling, as well as managed WAN (Wide Area Network) services from Lufthansa Systems.

• TFR takes temporarily restricted airways into account. This opens up up a host of new route options and leads to increased efficiency and additional fuel savings.
• After the flight plan has been filed, the IFM monitors all updates on airspace restrictions, airport data, and weather which influence the planned routing and automatically suggests alternative routes to the dispatcher if necessary.
• With FreeFlight an airline can select the most efficient trajectory for each flight based on the current weather and airspace situation. This new concept improves capacity and efficiency in air traffic management.

Alitalia Group, including Alitalia, Alitalia Express, AirOne, AirOne Cityliner and Volare, has decided to take the navigation charts from Lufthansa Systems on board. It recently signed a five-year contract for the use of Lido/RouteManual. With the innovative solution the airlines can optimize their flight operations and benefit from the high quality of the navigation charts. Alitalia Group also opted for the electronic version of the charts and will implement Lido/eRouteManual in two phases – initially on the pilots’ laptops and later on EFBs installed in the cockpits.

Lufthansa Systems produced around 1.4 million charts for the first delivery and by mid-October 2009 had equipped 155 aircraft with new manuals. During the implementation more than 3,800 binders were replaced in the cockpits. The navigation charts Lido/RouteManual provide cockpit crews with the most up-to-date geographical and aeronautical information. They include graphical representations of take-off and landing procedures as well as true-to-scale geographic information such as terrain features and rivers. The navigation charts are generated directly from our Lido navigation database.

The layout, colors and symbols are identical in the paper-based Lido/RouteManual and the electronic Lido/eRouteManual, which will make it easier for pilots to switch to the electronic navigation charts. One benefit of Lido/eRouteManual is that its charts can be updated more quickly and easily than paper charts, since updated charts no longer need to be printed out and distributed to each cockpit. In addition, cockpit crews can determine the level of detail presented by the charts. Depending on the chosen zoom step, information can be shown either in detail or reduced to key aspects.

JetBlue Airways has opted for myIDTravel, Lufthansa Systems’ integrated ID travel management solution for staff travel. Both companies recently signed a five-year contract to this effect. The system enables airlines to introduce self-service e-ticketing for ID travelers, which supports carriers in reducing costs by optimizing handling processes for staff travel.

myIDTravel is an integrated solution for the efficient ID travel management of duty and leisure trips. Through e-ticketing, the integration of self-service functions and a high level of automation, airlines can optimize their ID travel management and reduce costs. In the field of staff interline travel, thousands of paper tickets are issued each day in order to ensure eligibility of staff and correct accounting among airlines.

myIDTravel eliminates the need for paper tickets and enables airlines to issue electronic ID tickets for interlining flights in the transporting carrier’s system. With myIDTravel, there is no need to settle coupons through the IATA Clearing House as the traveler provides immediate payment to the transporting carrier upon ticketing. In addition to e-ticketing, airlines benefit from streamlining all processes involved in ID travel - from managing eligible travelers, checking availability and listing for flights to revenue accounting. Airline staff benefit significantly from utilizing myIDTravel as it enables them to purchase, change, cancel and receive an e-ticket immediately for travel.

Lufthansa Systems’ Sirax AirFinance Platform moves in step with the business and is continuously upgraded to meet industry requirements. Sirax will therefore be one of the first revenue accounting solutions to comply with IATA’s Simplified Interline Settlement (SIS), which is scheduled to become mandatory for interline billing and settlement in 2012. Thanks to SIS, a completely electronic paperless workflow will replace all existing clearing mechanisms. For most airlines needing to deploy the new standard, it is more cost-effective to switch to the proven Sirax AirFinance Platform than to invest in their existing legacy systems.

Sirax will already be able to produce and receive the new electronic billing format by the end of 2010. As the new format is already validated for correctness by the IATA SIS portal, Sirax’ processes for interline billing can be significantly streamlined. This helps Sirax customers to achieve considerable savings while switching to the new industry standard:

• The elimination of paper reduces shipment costs and shortens the invoice-processing cycle.
• Automated processing of coupons results in the faster generation of rejection invoices.
• Detection of discrepancies is facilitated by the elimination of today’s industry practice of data correction and manual data capture.

Apart from SIS compliance, Sirax offers a multitude of advantages when it comes to optimizing an airlines’ revenue accounting processes.

Airline planners constantly face the problem of assigning an aircraft to a route or flight without knowing whether the number of seats corresponds to actual demand. Now, airlines can achieve a new level of planning efficiency with the latest Lufthansa Systems optimizer, the NetLine Fleet Assigner.

The new NetLine Fleet Assigner combines strategic and tactical fleet assignment. Strategic fleet assignment is performed in the very early planning stage to calculate a standard week for a schedule that is two periods ahead. It optimizes the capacity distribution across the entire airline network to yield the highest possible overall profit. Tactical fleet assignment is carried out at a later stage. During the last few months before departure, it follows the goal of maximum profit through optimum capacity allocation. Valuable information such as detailed booking figures and forecast data is available at this stage and facilitates more precise planning.

The new Fleet Assigner increases the level of automation, as well as speeding up the process. It performs capacity allocations quickly and thoroughly, taking passenger demand into consideration. It also features an automated maintenance planning function. It identifies suitable legs for aircraft swaps, reducing costs and increasing revenues. The financial advantage of this solution is tremendous.

Austrian Airlines is one of the first airlines to optimize its fleet assignment using this innovative solution. After extensive tests and a benchmark analysis the airline opted for the NetLine Fleet Assigner in order to increase revenues and cut costs. Both companies recently signed a three-year contract to this effect.

Lido/FlightBag from Lufthansa Systems is an electronic platform that replaces the contents of a pilot’s flight bag and connects an airline’s onboard system with the ground operation. As an additional benefit, Lido/FlightBag now has an interface to NetLine/Crew, the crew management solution. Cockpit crews can access their duty roster as well as to the operational schedule on their laptops at any time. Croatia Airlines is the first customer to take advantage of this integrated cockpit communication solution.

It’s smart:

As soon as the cockpit crew start their flight preparation with Lido/FlightBag, they can also check in for that flight via NetLine/Crew CrewLink. NetLine/Crew automatically recognizes the next scheduled flight and provides the crew with updates to their schedule. NetLine/Crew also delivers all necessary information for the next rotation to Lido/FlightBag.

The pilot can now download all briefing information prepared by the flight planning system and start the flight preparations. All briefing information can be found in our clearly structured Electronic Flight Folder (EFF). Irrespective of whether the flight deck crew click on roster information or weather charts – the EFF provides the data centrally from both the flight planning and the crew management solution in the same look and feel.

One of the major assets of an Electronic Flight Bag (EFB) is the real-time access to all relevant operational data. Lido/FlightBag integrates a variety of applications for the paperless planning and operation of flights, such as the electronic navigation charts Lido/eRouteManual and Lido/TakeOff to calculate optimal take-off settings.

About 300 representatives from nearly 100 airlines met in Kuala Lumpur for this year’s IATA Revenue Accounting Meeting in September. They discussed the latest developments and challenges in this complex field. Once again, Lufthansa Systems had its own booth at the event.

This well-attended conference gave Lufthansa Systems the opportunity to present its Sirax AirFinance Platform to a professional audience. The Sirax AirFinance Platform is in use at 18 airlines worldwide. With a yearly processed volume of 410 million flight coupons it is the market leader in standard revenue accounting software. New functional highlights include revenue accounting for taxes on the coupon level, which makes it possible to report taxes and fees for each coupon instead of just each ticket, and SiraxView, the data analyzer to maximize airlines’ revenues.

Combining best practice with IATA standards, Lufthansa Systems anticipates future developments as an IATA strategic partner for airline finance. Efforts directed at simplifying the business are constantly adopted according to IATA’s most recent initiatives such as EMD (Electronic Multipurpose Document) and SIS (Simplified Interline Settlement).