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Airline jets with SAP

JetBlue Airways is rolling out mySAP ERP as part of an expansion of the airline's operations. Some in the cash-strapped industry are making IT investments to remain competitive.

JetBlue Airways, the low-cost passenger airline known for its blue potato chips and video screens in every seat, is rolling out mySAP ERP as part of its expansion plans.

Everyone's discounting and everyone's losing tons of money. There are things that are out of their control that can wipe out any sort of profit that is gained.
Sheryl Kingstone,
CRM program managerThe Yankee Group

Anticipating the addition of nearly 10,000 staff and dozens of more airline hubs over the next several years, Jet Blue executives said part of the growth strategy includes streamlining and integrating IT systems.

SAP was chosen because it was scalable enough to meet the company's projected growth schedule, according to Vinny Stabile, vice president of People at JetBlue, the airline's operations division.

JetBlue purchased a license for the mySAP Business Suite, which includes an SAP module for the aerospace and defense industries. The module is SAP's industry-specific software that addresses specific business processes for the airline industry and defense contractors.

The ERP implementation is currently under way, with completion of the first phase expected in the third quarter of 2005, Stabile said in a press release. The airline did not return requests for an interview.

More than 8,000 JetBlue employees in the airline's 29 locations will use the software. The project is expected to be completed by the second quarter of 2006.

The airline industry has been in a tailspin in recent years with staff cuts and some airlines on the verge of bankruptcy, resulting in fewer amenities for customers. Following the Sept. 11 terrorist attacks and skyrocketing fuel prices, finding ways to save money and improve balance sheets has become even more important for airline executives.

Airlines that have some cash on hand are working to improve analytics and streamline IT systems, said Sheryl Kingstone, CRM program manager with Boston-based Yankee Group.

"The airlines are trying to really change how they treat customers, but in the end it's very hard for the airline industry," Kingstone said. "Everyone's discounting and everyone's losing tons of money. There are things that are out of their control that can wipe out any sort of profit that is gained."

Southwest Airlines began building a second data center last year to improve security. It launched a new data warehouse, combining 2 terabytes of usable data that enables the IT team to analyze up to 26 subject areas.

Airlines boost IT

Continental Airlines builds real-time data warehouse

Southwest Airlines soars with analytics

Southwest said the size and scope of the data warehouse is projected to double in size over the next two to three years as it integrates all its corporate data. The company is using a mixture of Oracle, Sybase and Microsoft SQL Server systems and is also mulling over Linux plans.

Continental Airlines also improved its analytics, building a data warehouse using hardware and software from NCR Corp.'s Teradata division.

The data warehouse is used for customer-relationship management, (CRM) fraud detection and crew payroll-management applications, giving employees access to flight schedules, seat inventory, revenue and ticketing data and customer profiles in real time.

"Many of these initiatives are in an effort to cultivate customer loyalty and increase customer segmentation, giving incentives to the most loyal customers," Kingstone said. "Offering incentives comes at a cost and that's where analytics plays a role to provide the right incentives and manage analytics to improve the bottom line."

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