VK Mathews
Credit: Special arrangement
Bengaluru: The country's largest airline IndiGo faced a massive operational crisis last week, leading to many flight cancellations. According to IBS Software Founder and Executive Chairman VK Mathews, it's "a 100% technology insufficiency", and that their (IndiGo) computer systems should have identified how the network would struggle or gotten disrupted, if they opted for it (new Flight Duty Time Limitation rules), because naturally you need more pilots. With this new scheme, pilots will be unable to serve as many hours of duty as earlier.
IBS Software is one of the leading IT product companies for the global travel industry providing specialised and proprietary mission-critical technology solutions to some of the world's largest airlines. Mathews, who is a specialist in aviation business, told DH that the airline has produced the winter schedule based on the new FDTL rules and that they did not have computer systems sophisticated enough to actually simulate what would happen to their network and their operation if these constraints were applied.
"I will not be wrong in saying that they did not see what was coming. If they had seen it, they would have been prepared. And what's the preparation going forward? Reduce the number of flights. Of course, it will affect their revenues. But that is better than the kind of disruption that it has caused," he added.
He also stressed on the need for creating successful airlines, because it is important for the country's growth. Speaking about the role of technology in the airline industry, he said an airline business has three distinct process areas — planning, selling and operating functions. In planning, one plans flights, schedules, price, routes, and so on, and whatever has been planned, has to be sold to customers. "And then when you sell it, you have to operate it. In all of these areas, technology plays a very important role," he said, adding that reliability, efficiency, productivity, and improved asset utilisation are the considerations of technology.
The travel industry is highly-dependent on technology. "It's one of the toughest businesses on earth... it is in the business of the most perishable commodity — a seat. An airline seat has no value once it takes off. It's gone forever and I cannot keep it for tomorrow," Mathews said.
Whenever there is demand, there is a surge in airline pricing, he said, adding that price is a factor that influences occupancy.
"There are very sophisticated systems that look at demand in the marketplace. What is it that other airlines are selling? How did the previous day's flights go? How did the last season go in the same month or same week? All of this is done. And this is the revenue management system that we provide. It will check and accordingly adjust the price dynamically," he explained, adding that the airline business is not a profitable one.
"It's not a great business. And we are angry when they're increasing the price. But they're not going to go anywhere, because they will still be in the ballpark of losses," he said.