Sky-high tech

Mobile check-in. Web enabled kiosks. E-enabled aircraft. Vascular biometric scanning. You might think I’m talking about last night’s episode of CSI, but the bleeding edge of technology lies much closer than Vegas, and in fact forms the beating heart of Dutch airline giant KLM.

You could argue that time has prepared Boet Kreiken for his current role at airline giant, KLM. The CIO has worn many proverbial hats during his 23 year tenure at the company: in strategy, personal assistant to the President, head of Sales Europe and Revenue Management Europe, general manager for Nordic Europe, Pricing and Revenue Manager, head of Asia Pacific and South America, VP for sales distribution.

Since the start of his role as CIO for KLM, Kreiken has completed a number of large-scale technology projects. There are two projects he points to as being particularly significant. “But the biggest one might sound ridiculous,” he smiles, leaning back in his chair. “It’s the successful migration of our reservation system, a KLM reservation called CORDA to the Amadeus Altea Reservation System. It was a project we outsourced and the migration was completed on time, at cost and at quality. It was the biggest migration to date in the airline industry, as it was completed for around 25 co-shares as well as KLM.”

Part of the reason the migration was outsourced in the first place was that KLM – as part of Air France-KLM – was creating a common platform. Now the airlines have created a common outsourced reservation platform with Amadeus, the next step is to extend this common platform to inventory and then to departure control systems. This project was the first that Air France-KLM had interfaced on together, a decision that was taken in 2004 (before Kreiken assumed his position as CIO).

Although the project was delivered on April 1st, 2007, it was no joke: KLM also completed this for their joint venture with Northwest, which was an extremely complex undertaking. Added to the complexity KLM’s high level of e-commerce sales (close to 25 percent), so all the e-booking interfaces had to be involved with the migration. As part of the migration, a new product unique to KLM – SEGO PNR technology – was also created. “We had a lot of firsts in this whole thing!” explains Kreiken, whose casual tone makes light of the extensive planning and hard work that went into the migration. But he gives credit where credit is due: “this was a huge project and we were very successful with it.”

The other big project Kreiken cites is the development of internet check in and kiosk capabilities. Schiphol Airport in Amsterdam houses the biggest kiosk web farm in Europe (other notable global examples are Narita in Tokyo and Newark in the US). Using open architecture software, this development has delivered many benefits as well as savings for KLM. “We were also first to develop internet check,” Kreiken announces proudly. “It was completed in 2006, and we did it also for Air France-KLM. So if you book on KLM and you continue as Air France – or vice versa – you can complete internet check-in for the second flight too. We had a first with the application, both in scope and scale of the application.” KLM was also first– and so far, the only carrier – in the world that has delivered transfer kiosk check-in. In August 2007 at Charles De Gaulle Airport, the Kreiken’s team unveiled the first transfer kiosks with internet possibilities for both KLM and Air France.

Kreiken tells me that he has a clear vision that the web-based services and self-service are the future for the air industry, “so financial benefits for the company and the benefits of convenience for the customers are right there. Right now, we have more internet check-in than kiosk check-in. We also have mobile check-in that is popular. So you see the cycle of creation and destruction is already working! Additional check-in went down dramatically and therefore adding a lot of benefits for the company.”

It is the willingness to embrace new technology that has set Kreiken’s team and KLM’s vision apart from the global carrier market. Intrigued by the concept of mobile check-in, I ask him to elaborate on its potential. “Well, our next step is to take the mobile check-in with bar codes. This means bar code technology on your mobile that you can use at certain gates to check-in and pass through.” As if this wasn’t enough, KLM are also working on completing new security-based technology in the form of vascular biometrics. Although the trial won’t be for check-in yet (at time of press it is just to “check the technology”), don’t be surprised if airline assistants are soon scanning your hands under blue lights before they’ll let you board your plane.

Another element of this progressive technology that KLM pursued is looking like it will pay off for them. Not content with the amount of ‘firsts’ they had racked up, the carrier was also the first in the world to have e-enabled aircraft. “Just four weeks ago we had delivery of the Boeing 777 300, which had e-enabled technology that checked the technical status of the aircraft. This means people on the ground know in advance everything that’s happening with the technical state of the aircraft and the servicing state of the aircraft: the quality of the carrier.

“The moment the aircraft has landed there’s no paperwork to be completed - everything is e-enabled. The engineers have already found the parts they have to replace, there are already the adequate number of people on the ground ready to repair and clean the aircraft,” he tells me. With the decrease in turn-around time, the potential benefits and cost-savings are obvious. After this successful voyage, Kreiken plans to roll out this new technology for all new aircraft coming in, and in the future to the whole KLM fleet.

Together we stand
As the airline industry becomes more competitive, strategic alliances offer a great deal for carriers. Customers get better products (often lower prices or better services), more lounges, more frequent flyer miles, smoother connections between carriers. The bottom line for the airline is also positive, as cost in sales or distribution can be lowered, or two lounges can be reduced to one lounge, and IT systems can be consolidated.

“Alliances are big,” confirms Kreiken. “Consolidation is a big issue. We expect Europe consolidation to continue. It will certainly continue in the United States. In Asia Pacific things are more complex but they will slowly change. There will be a greater move towards the big alliances – umbrella alliances like SkyTeam. In these alliances, there will be a greater understanding of what things each partner needs. For example, if you need an internet driven baggage drop off points at all airports why should all carriers develop it themselves? Can one of the carriers develop it on behalf of the group and then share the software between its partners? That means only one of the many has to develop it, so all partners can work faster and more efficiently.”

The most ‘extreme’ alliance in the airline industry – according to Kreiken – is the Air KLM-Northwest joint venture in the North Atlantic, which runs at US$2 billion and is managed in Amsterdam in an integrated Dutch/American team. He gives me an example of how strategic alliances can reduce the breadth of the world to just one air ticket. “Air France-KLM is the biggest European carrier. The Northwest KLM joint venture is antitrust, and we also have anti-trust with Kenya Airlines that flies to Uganda. We can connect Uganda to as far away as Detroit. On our own we could never offer that product, not competitively. Alliances allow transparency, and the fact you have organised it in a smart way (with the joint venture both splitting costs and revenues) allows you to further optimise those markets in a way you could never do on your own.”

Looking to the future
Although KLM’s achievements are numerous, you’ve got to move fast to stay ahead in this game. As stated, the carrier is planning to move into creating common platforms with Air France, their merged partner. Pushing this further, there are plans to move applications to joint unique applications for the group: passenger, passenger business, cargo, engineering and maintenance and operational applications. This is the biggest project KLM has planned, and likely to take the longest.

Another area KLM will be looking at is renewing legacy applications, either on its own or jointly: things like crew systems or accounting systems. “By the end of 2012 will we basically have a completely new Air France-KLM infrastructure and application portfolio,” says Kreiken. “That is big. We are slowly co-ordinating the way we work in development; how we run development projects, how could we tap intelligence skills, knowledge from either Air France into KLM or the other way around. We do the same in operations. Help desk management is already delegated to Air France. In other areas KLM takes the role of supplier for the group for kiosk applications, internet applications. We have already a common architectural approach and joint programs in system open architecture. This is run by Air France on behalf of the group.” The partners have their own projects, but it also means that the way the organisations work has to be similar.

We’ve covered KLM’s technological prowess in as much detail as we can in one meeting, but as we wrap up Kreiken stops me, saying he has one more point he’d like to cover: the role of the CIO. “I think it is both overestimated and underestimated,” he laughs. “But the role will change. Take as an example here at KLM; more and more you see that the CIO is part of the executive board of the company. I have a very particular role in the business case. I work very closely with the business managers, working on businesses cases. Where are we going to apply new technology? What does it mean for the processes? How can we find benefits for their customers, for their organisations in cost or value and also in our own organisation?” Tough questions. Good job KLM has the man with all the answers.

Leadership

CXO. So how does leadership come into your role since you’ve been appointed as CIO?
BK. As a leader I do the utmost to have standards and a proper idea of where are we right now in performance, in cost, quality of people in competences and skills, and in projects.

The second issue is how do we create exciting and shared visions in the role of IT. This mainly involves our relationship to the businesses we serve and also in the corporation with our colleagues from Air France.

Third concerns change management, working out how to get from A to B. The shared vision of communication is also extremely important in change management when you’re undertaking as many projects as we are.

The fourth factor is about running your business today. I have to deliver continuity today at lowest cost for all the applications we have. This is mostly for KLM and partly for Air France too. This means working out ways to improve technically, and how to take care and create a future.

The fifth thing I do that concerns leadership is working on attracting, maintaining and developing the right people and the right staff. That’s it. That’s the leadership role in my function and my style.

AIR FRANCE – KLM – The group
Two airlines, three core businesses:

• passenger transport,
• cargo transport,
• aircraft maintenance services.

The Group is the world leader in terms of international passenger traffic; it ranks second worldwide for its cargo activities (not including integrators) and is one of the world's major maintenance service providers.

The Group counts more than 103,000 employees throughout the world.

Passenger transport is the Group's main business, accounting for 80 percent of turnover (2006-07 financial year), with 73.5 million passengers carried, a fleet in operation of 569 aircraft, and 240 destinations worldwide.

The Group structure is simple: a holding company with two airline subsidiaries.

The SkyTeam Alliance
SkyTeam, set up in 2000, with 11 member airlines offering 16,409 daily flights to 841 destinations in 162 countries, makes travel easy for today's frequent flyers.

The SkyTeam member airlines:

• Air France
• KLM
• AeroMexico
• Alitalia
• Continental Airlines
• CSA
• Delta Airlines
• Korean Air
• Northwest Airlines
• Aeroflot
• China Southern

Is there a future for air travel in a green world?
Boet Kreiken thinks there is.

“Flying is an a fact of life. It’s part of the global economy – it makes the global economy. You cannot dissolve the need for the physical communication of business people, or for physical leisure in other locations away from your home. It is likely that the reasons why people fly will slowly change, because communication devices available today are very advanced.

People setting up business relationships will always have to meet in person. But once they have met a couple of times, then instead of meeting in person six times a year they will just meet two or three times a year, and video conferencing will replace those other trips. The chances that the amount of air travel will diminish are really minimal. But the reason to travel and the longevity to travel will also differ. What is important is of course the greening of the world.

KLM is the No. 1 in the Dow Jones sustainability index; we are the most fuel efficient and green efficient effective carrier in the world. We try to keep it like that as well! We have a lot of projects running of course to lower our costs. It’s also good for the bottom line but also for less CO2 emissions.

We have just developed a new paint for our aircraft, which is called Gruanomat. We only need half the amount of this paint, which is better for the environment. The pigment is smoother on the aircraft, which is better for air dynamics. It also reduces the ground time because we need less days of painting.

"IT has a big role to play in greening processes. The genuine IT challenge is to lower the cost and use of energy in our IT systems.”