–Bruce D Parker, Chief
Information Officer and
Senior VP, United Airlines.

Bruce D Parker wants to use technology to change the way
travelers fly with an airline. As Chief Information Officer and Senior VP, United
Airlines, Parker is taking the company toward a number of IT innovations. He launched
SkyNet, the company’s first intranet, electronically linking United’s 95,000
employees. Parker has also overseen the deployment of technology to better integrate the
carriers by setting up Star Alliance, a global team of airlines created to provide
customers with the ‘virtual airline’ experience. Recently, United Airlines has
announced a joint venture with The Chatterjee Group to set up SkyTech Solutions, a
software development center in Calcutta. The center, which is United’s first such
setup outside the US, will provide software development support and services to the travel
industry. In an interview with Dataquest, Parker spoke about the new venture and how it
would take United Airlines toward creating a whole new era in the airline industry.

What was the objective behind setting up
this development center in India?

There is an increased need for services to be based on the internet technology as it
allows a whole new range of applications to emerge. In this joint venture, we are looking
for resources, mainly skilled people, who could allow us to tap new emerging technologies.

About a year ago, United Airlines embarked
on a strategy where it was decided to seriously consider India as a potential place to
build a development center. We wanted to put together long-term development skills and
were not interested in service contracts for short durations. So, we wanted people who
could understand technology as well as the airline industry.

Was there any specific reason you
entered into a joint venture instead of outsourcing?

We were not really looking for outsourcing because if we wanted only a service contract,
we would have never formed a joint venture. Our interest in India is not just to bid
projects and have people respond to them. We wanted to have a long-term consistent base
that is very good in technology and very much endowed with knowledge of all the business
processes in the airline industry. For instance, in E-ticketing you can’t have a
contract with anybody who might not even have sufficient knowledge about the ticketing
process in the industry. You must build that kind of knowledge among people and keep those
people with you for a long period. So, the reason for the joint venture was that we wanted
to build a close relationship with employees. We could have done it on our own, but we
felt it would be difficult for United Airlines to manage it on its own so we chose to do
it with a partner.

Why did you choose TCG as your partner?
Could you explain its role in this association?

Actually, we went through a series of companies, but we liked TCG for a couple of reasons.
One was their ability to build such a venture as they already have a tie-up with Computer
Associates. Both United Airlines and TCG found each other suitable and our relationship
began with a mutual desire for such a venture. They also wanted to do something besides
just contracts and services. And as we gained some experience of working with them, we
liked them a lot. They proved quite effective and we felt that they would be able to
manage such a setup successfully. Moreover, they are well respected in India in other
areas as well.

Initially, they will do the financial
management, training and project development for new techniques. We have already started
work at TCG’s facility in Calcutta and we have utilized 50 of their people in
development. Those people will now be transferred into the new joint venture company.
TCG’s facility in Calcutta will be the incubator for our joint venture and then it
will grow.

…And what attracted you toward India?
India has some very good technology schools and universities where people are trained on
technologies that are most commonly used. There are two main aspects: these people are
hardworking, focused and culturally work well in teams. And in situations where there are
large geographic distances among people, this is a fundamental requirement to be
successful. These were the main characteristics why we selected India.

You have emphasized on
‘technological innovations’ in your present strategy. Could you elaborate on

Let me explain this with an example. E-ticketing, for instance, is one of the recent
innovative developments that we are talking about. It evolved when we started analyzing
how and why we need paper tickets and basically came to a conclusion that we don’t
need paper tickets. You can have electronic records to represent the value for payments.
We led the industry toward an e-ticketing solution. It was implemented in a series of
projects for United Airlines. Then we took the software and sold it to others including
our competitors like American Airlines. We anticipate that with SkyTech, we’ll be
able to create more such systems that will enable innovative change in the industry.

In what ways do you think this
development center will improve your services globally?

A large part of the technology that we use directly touches our customers. For instance,
we do a series of applications at the airport that are aimed at individuals as well as
businesses. We are looking at systems that will enable our customers to understand our
travel services and help them to deal with difficult situations. Many of the software
applications that we are developing aim to improve our customer services. Additionally,
they will also improve the profitability of the airline through revenue management.
Another important area is cost management through inventory reduction. The collaborative
type of software that comes with internet technology is being deployed. The knowledge
tools, collaborative tools and specialized applications built around these enable the
employees to utilize technology in a better way.

What are the main activities presently
being handled by the IT division of United Airlines?

At present, the IT division of United Airlines has about 2,000 people based in Chicago,
Denver, Los Angeles and San Francisco. We build systems that cover a whole range of
applications such as reservations and sales. We have a very large presence on the internet
under our website called ual.com. We are accelerating these efforts and hope to do a lot
more in that area. The maintenance and engineering department takes care of the aircraft
and systems. How we push technology here is by providing the technicians with an online
system that allows them to keep track of the aircraft. We operate two large data centers,
one of which is in Denver where reservations are processed. The other one is in Chicago
where we have a significant underground facility that does our flight planning. There is
an operations’ research group that does mathematical modeling of our various

Could you tell us what packages you use
for data processing?

Our LAN uses Novell servers and Bay Network routers. We have a very large TCP/IP network
deployed worldwide and the company is using Oracle as well as Informix data structures
heavily. Our web-based technology is run in a Unix environment. For reservations, we have
created an in-house product called Apollo.

…But why didn’t you go for any of
the popular CRS brands for reservations?

Actually, Apollo is one such solution for reservations. It is the underlying system for
Galileo, which is one of the largest global CRS. So, we created the original system that
is now providing reservation services to the travel world.

What are the other technology areas you
plan to invest in future?

We look at airlines as a series of applications portfolios. We’ll make investments in
our revenue portfolio, which covers internet sales. One of the other areas is asset
maintenance. We’ll be making considerable investment in that area because there is a
large amount of inventory, aircraft parts and so on that can be reduced by utilization of
new technology and by better services. Additionally, there is the area of flight training
where we can do a lot with technology and support the crews with the latest information.
We’ll improve our flight operations through better training and scheduling for our
pilots and crews. From a sum of $500 million, we spend about $200 million in applications
development. Internet-based applications are another important area where we plan to
expand in the future.

How crucial do you think IT has become
for the airline industry today?

IT is the nervous system of an airline. If it doesn’t work well, your limbs and arms
don’t work well either. That is the basic fact, but now I think IT has also become
the innovation point. It can help you to alter your products. With some of the internet
offerings, the kind of sales and service benefits that you can offer to your travelers
couldn’t have been done earlier. So, now it is not just the nervous system, but it
also offers innovations for business. IT has certainly become very vital and the larger
the airline, the more critical it is.

In your long experience with the airline
industry, what kind of transformation you have noticed in technology?

I’ve had the opportunity to work with two airlines— American Airlines and United
Airlines. Both of them use technology as nervous system, or innovation point. The
technology itself has changed greatly from basics like ‘you must invent the
technology’ to creation of specific protocols for the airline industry. And today you
have newer techniques that allow much more innovation and can be leveraged for even better
services for the traveler. It is like a part of the soup that adds to its taste.
That’s been the biggest differentiating change over in the last few years. And
internet is obviously the key to the changes.

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