SAA saves with IT

By Christelle du Toit, ITWeb senior journalist

Johannesburg, 26 Nov 2007

IT plays a major role in South African Airways' (SAA's) bid to return to profitability, says the national carrier.

However, SAA CIO Mike Re could not provide details on exactly how much IT is saving SAA, or timelines for specific projects. He did say the cost-saving forms part of the airline's "broader cost-savings initiatives" and various projects are "in progress".

As an example of an IT-driven initiative that is contributing to the airline's cost-savings, Re cites the overhaul of its Web site, with a shift in focus to direct sales channels.

"Customers can now manage their own reservations online [and] businesses can use the new corporate portal to make business travel management easier."

In addition, the airline is moving towards a paperless check-in environment, with levies already being charged for tickets that are not bought online.

Re says the piloting of 2D bar code boarding passes and RFID tagging for luggage is also proceeding well, while customers will be able to check in online as of February.

In addition, the IT department is reconciling all desktop printers used in the company, in order to cut internal spending.

"We are looking at reducing printers by making use of a printing hub concept and by reducing our vast amount of manufacturer model suppliers to a single supplier," he notes.

Cutting its losses

"SAA's IT department is playing an essential role in the present deep and fundamental restructuring the airline is undergoing.

"We are especially proud of how IT has made a contribution towards assisting the airline with cost-cutting initiatives."

In March, SAA chief executive Khaya Ngqula announced government had lost patience with the carrier's continued losses and it would subsequently embark on a restructuring process.

Following the announcement, about 220 managers and 2 000 workers have left the airline, while its fleet of Boeing 747-400s was also grounded.

The restructuring, set for completion in 2008, will also see SAA's seven divisions, such as SAA Technical and SAA Cargo, split off into independent business units.

This month, SAA recorded a half-year profit of R136 million for the six months to September 2007, compared to a R650 million loss in the same period in 2006.

As the restructuring unfolds, IT will play an increasingly important role as "we have to do more with less people. The only way one can achieve this is by improving our business processes and increasing automation," says Re.