by Mark Chillingworth

BA Iberia merger technologically easy

Nov 12, 2009
IT LeadershipIT StrategyMobile Apps

British Airways and Iberiaare both customers of the travel system Amadeus, which will make today’s merger a great deal easier, say experts. British Airways has agreed terms for a merger with Spanish rival Iberia. The airline industry is a major user of technology and this merger, one of the biggest in air travel since the merger of KLM and Air France, is the largest. Forrester Research and executive recruitment specialists Harvey Nash have shared their expert views on what the merger will mean for business technology. “The merger is a good one, both BA and Iberia host on Amadeus and use Amadeus’ applications for key IT applications, including passenger service systems and web booking,” said “Henry H. Harteveldt Vice President & Principal Analyst, Airline & Travel Research at Forrester Research. “While they may use Amadeus differently, the fact the two airlines are on the same platform means that if they choose to consolidate onto a single back-end, there is the potential for less disruption. “Since each airline will maintain its own identity and code, this is not like a full-fledged merger, such as Delta-Northwest merger in the US. There is another advantage: Amadeus prioritizes its product development according to the collective will of its customers, so BA and Iberia will have a bigger voice within the Amadeus airline customer community. “A big IT challenge will be the airlines’ maintenance, repair, and overhaul (MRO) records and systems. As you can imagine, this is highly detailed, and crucially important, since it relates to each airline’s safety. In airline mergers, consolidating MRO records is generally one of the most time-consuming challenges. Even if each airline maintains its individual airworthiness certificate, the combined BA/Iberia could conceivably save enormous amounts by standardising MRO procedures and records. If their procedures, record-keeping, and systems are different, determining which to keep will be a timely, complex, and expensive task,” he adds. “What remains to be seen is which airline will ultimately call the shots in terms of IT strategy. With Air France-KLM, we have seen some division of the responsibilities. For example, Air France tends to lead overall IT strategy, but KLM tends to lead e-commerce and passenger self-service.” Ronny Lommelen, Managing Director for the Benelux countries at the consulting division of Harvey Nash said there is a 20 per cent pay difference between the UK and Spain and this may well effect the strategies of the CIO.