Welcome to the cheap seats

Budget airline Ryanair may be best known for its low prices, but when it comes to investing in technology it is prepared to spend big bucks, as Head of IT Eric Neville, reveals to BM.

Despite the seeming unpopularity of its charging policies and the introduction of a raft of new 'hidden costs' for passengers, Britain's most successful budget airline, which featured in the BBC Panorama Documentary Why Hate Ryanair earlier this year, continues to go from strength to strength. In the first six months of 2009, its total passenger numbers rose 15 percent to 36.4 million and it currently carries more people across Europe than any other airline. It's a major achievement in economic conditions that has left its larger rivals floundering. Indeed in a recent interview with the UK's Times newspaper, Ryanair's CEO, Michael O'Leary, boasted that his airline could soon topple British Airways as the UK's dominant carrier; "It is hard to know when it will happen because it is hard to keep up with how fast BA's passenger numbers are declining. We will overtake them at some point."

Behind the scenes

The airline's success is due not only to its aggressive pricing strategies, but also to the work going on, unseen by the public, in its back offices to streamline the carrier and support its rapid growth. Head of IT Eric Neville is behind the technology driving the airline's success. Despite predictions by the aviation technology provider SITA that investment in airline IT is expected to drop to an all-time low this year, he is upbeat about the prospects for Ryanair's own IT expenditure: "Obviously we're looking at anything we can do to reduce the cost of what we're doing. Everybody in the industry is. But at the same time we do realise that to change your processes you have to invest. And sometimes you have to spend money to save money."

With this philosophy in mind Ryanair recently awarded a €15 million contract to Cable & Wireless to manage its European IT and communications network in the 151 airports to which it flies. Under the terms of the contract, Cable & Wireless will provide an 'always on' communications network for the airline, which will cover all passenger interactions with the airline, including check-in kiosks and each Ryanair site will be connected to a secure wide-area network.

The arrangement will dramatically improve Ryanair's operational effectiveness, says Neville, who explains how, under the previous system, Ryanair would have to apply for licenses from the telecoms authorities of the countries it flies to for back-up broadband connections. It will save costs and improve efficiency by using VoIP as part of the Cable & Wireless network: "In the current set up, we have hundreds of invoices every month from telecoms providers. We also have outbound voice charges. At the moment we pay local rates to the local telecoms providers, which are higher compared to what you'd pay if you had a consolidated voice offering. The new system will reduce the voice costs for everybody and centralise the billing and invoicing process, which currently creates a huge amount for work for our finance department. This will be a much simpler model." The system will improve the reliability of Ryanair's communications, supporting such crucial parts of the operation as the timely taking off and landing of flights: "Obviously these time slots are quite crucial," says Neville. "If there's critical information that needs to be passed around, then you need a robust telecommunications infrastructure in place to make sure the communications are clear and reliable. More robust telecommunications technology will also support the introduction of Ryanair's self-service check-in kiosks, which currently operate in 10 airports. The Cable & Wireless network will ensure that there is a reliable communications link back to the main Ryanair IT system, as Neville explains: "Cable & Wireless will be providing the primary circuit and the back-up circuit for the kiosk so that it can get back into the overall reservation system to process the data. So locations with kiosks, such as Stanstead or Girona, will be very reliant on our infrastructure to make sure they keep running."

Looking ahead, Neville predicts some major changes to the way airlines operate and to the passenger experience in particular. While self service-check-in may seem a forward-thinking concept, it is just the tip of the iceberg according to Neville, who predicts it won't be long before paper boarding passes no longer exist and passengers hold all their flight details on their mobile phones: "In an ideal world, passengers would be able to just scan their mobile phones in order to get on to a flight. That's the direction the airline industry would like to go in because it's easier. But obviously you're dependent on airports having this functionality. And that's probably still a bit of a way off. But this is one of the projects we will be looking at because we think that in the future the mobile phone will be a major part of how passengers interact with the airline."

Big spenders

For now, however, he says he and his team have "an endless stream of projects" they are working on, with none, he claims, threatened by the economic downturn and the reductions in IT spending across the European aviation industry. "I have enough projects to keep me going for quite a long time here," he says. "There's no plan to end any of them because ultimately the projects we are doing are either beneficial to us, the customer or to streamlining the process." Indeed, he goes on to say that automation of some processes could ultimately help airlines to steer their way through the downturn: "If you look at us, 99 percent of our bookings come through the web, which obviously saves costs. Simplifying the process of getting people from the check-in area to the aircraft is what we want to look at now, which is why we've introduced the 100 percent check-in system. As much automation as possible is what we've got to try and aim for."

While Neville is optimistic about Ryanair's plans to continue spending on IT improvements, he is aware too of the challenges posed by working in such a security conscious industry, particularly when it comes to the handling of passenger information. Neville says one of the biggest problems around such data regulation is the lack of a common European standard across the region: "One of the biggest challenges we have is regulatory requirements. There's obviously a huge drive right now for passenger information. My biggest issue with that is that there is no single European common approach to what information has to be passed where and how. We have one central reservation system, but the Spanish have requirements for data to be transmitted in one format then the UK needs it in a different format. It's a huge challenge for us because regulatory requirements can suddenly change and then we have to spend six months on a project to work around that. It's not just a simple code change. It would be lovely to see one consolidated European standard rather than individual mandates coming in from different countries all with different requirements."

The greater focus on passenger information in light of tightened airline security means, says Neville, that Ryanair is now required to gather more passenger information than ever before. That, coupled with the increase in passenger volume, means the airline's IT system has to process more information than ever before. This, he says, does create some technical challenges: "The sheer volume of what we put through the system each day is huge. We have millions of hits each day to our system, particularly when we have our free seats sales, and we have to cater to that. This means having a scaleable 100 percent uptime solution and a robust disaster recovery plan in place."

Despite the enormity of the operation he is supporting, Neville's IT team still only consists of 26 members of staff in what he describes as a tight knit company: "Generally here everybody works hard and it's a good group. Everybody here is in the same building, and we're all in a very 'on top of each other' environment." This, he says, makes the process of asking Ryanair's management for funding for IT projects relatively easy: "You go in, you put your case together and it's a yes or no. It's as simple as that. You don't have to go to America or someplace else for approval. Realistically, you just put your case together and if it makes sense, we do it." It's just such a no frills approach that has made Ryanair the aviation giant that it is today. But if Neville has anything to do with it, the airline certainly won't be cutting corners when it comes to technology.

This article first appeared in CXO Europe.