Spicing Up With IT

The
low-cost airline travel revolution was started by Air Deccan in India. Today
SpiceJet has emerged as its closest rival with others such as Jet and Indian
Airlines trying every trick of the trade to eat into the market. 

SpiceJet launched its
India operations on April 15, 2005. On the day of launch, the portal received 8
mn hits and registered 37,000 bookings in four hours. Despite the huge traffic,
the website was fully operational and running and this is what makes
SpiceJet's e-ticketing system appropriate for a case study. 

SpiceJet's
e-Ticketing portal www.spicejet.com has
been developed in-house, by its 10-member IT team. The website is based on the
philosophy-Keep It Simple and Stupid. The idea is to make the website as
friendly and simplified as possible. The portal acts as an
information-cum-booking engine for the carrier. It took the team around 45 days
to develop the website. The payment gateway took nearly two-third of the overall
time. The pilot was done on April 15 last year followed by comprehensive load
testing. The website was launched a month later.

Currently, SpiceJet
operates flights to 11 destinations. Connectivity to these happens through the
carrier's own virtual private network. This has helped SpiceJet reduce its
distribution expenses to 3% of the operating expenditure. Creation of its own
VPN also allows SpiceJet to use VOIP on its network without depending on a
vendor for additional services and support facilities.

At a Glance

Issue: e-ticketing Reason: To reduce cost Vendor/Solution: In house portal Benefits Reduction in distribution expenses to 3% of the operating expenditure The portal acts as an information-cum-booking engine for the carrier Lower communication cost

SpiceJet also has a
100-member call center operation out of Gurgaon headquarters. The website is
hosted on a high-speed network through 40 Mbps Internet pipes. SpiceJet has a
TelNet-based system that uses minimum bandwidth.

The official website is
hosted on the HP Unix server which makes it more robust and helps handle huge
website traffic without crashes. It has chosen Linux for its proxy servers and
mail servers.

SpiceJet plans to roll
out web-based check-in in the near future. The IT team is also in the process of
developing several in-house applications. The company is also planning an
internal Linux based helpdesk. Says Virender Pal, general manager, IT (Special
Projects), an Air-Deccan veteran and currently heading the IT operations in the
company after the departure of its CIO, “We are trying to create a synergy
between a conventional IT organization and an airline company.” 

Kiosks are also being
planned to facilitate self-check-ins to passengers. The application, again built
in-house, is ready and the kiosks should take off by the end of the year
if things go according to plans.

Applications have been
developed in-house that captures mobile numbers and PNR at the time of booking
to generate instant SMS alerts to passengers. If mobile numbers are not
available, the call center takes up the responsibility of keeping the passengers
posted with the latest information.

Cost is an important
component of any business and more so with respect to low cost carriers like
SpiceJet. There is a fixed cost involved in case of Navitaire which is based on
a per segment arrangement. The IT infrastructure cost for setting up an airport
is in the Rs 4-5 lakh range as compared to traditional airlines that spends
around Rs 10-15 lakh. SpiceJet has lowered the communication cost significantly,
thanks to its own VPN and VOIP.

SpiceJet like all
low-cost carriers has its own Airline Distribution System wherein Navitaire, an
Accenture-owned company, hosts the inventory in the UK. Royal Airways has
selected Navitaire's Open Skies host reservation system and revenue management
system to help operate its new low-cost airline, SpiceJet. Navitaire's
technology allows direct Internet distribution and ticketless travel.

Bhaswati Chakravorty  

bhaswatic@cybermedia.co.in