Tiger Airways Tiger Airways MRO Programme Management - DAV Management Limited - Case Study

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DAV Management Limited - Case Study

Tiger Airways
Tiger Airways
MRO Programme Management
Tiger Airways: Roaring Ahead Of the Competition

Background

Tiger Airways was established in December 2003 and took to the air, flying low cost services, in
September 2004. Operating from Changi Airport in Singapore, the airline now serves 16 cities in
eight countries around Asia including Australia, China, Thailand, Vietnam, Indonesia, Philippines
and Singapore.

Tiger Airways’ mission is to address the needs of budget-conscious travellers looking for a reliable
and fun low-fare service in the Asia Pacific region. Since launch the airline has responded well to
the tremendous growth of air travel and the rise of budget travel in this region. Keeping its
strategy simple, Tiger has worked to remove as much cost as possible from flying, whilst providing
safe, reliable and convenient point-to-point air travel to Asian destinations.

A key goal for the airline is to have one of the newest and most cost-effective fleets among the
low cost carriers. As a result, Tiger has set itself very aggressive growth plans. In order to achieve
this growth Tiger needed to implement three new essential IT systems:

    •    An internet booking and reservations system

    •    To upgrade the airline’s existing corporate website

    •    Develop an innovative payment gateway in order to trade in multiple currencies.

All three systems needed to be up and running in very short timescales, and owing to the nature of
its business, Tiger couldn’t afford to have periods of downtime. The airline knew it needed help
and called upon DAV Management (DAV), specialists in programme, project and commercial
management to successfully deliver these complex technology-led business change programmes.

2005 - A Pivotal Year

In late 2004 Tiger appointed a new CEO, Tony Davis. Tony was previously the Managing Director
for bmibaby and brought a wealth of experience in driving forward a low-cost airline business.
Tony’s appointment was the catalyst for change in Tiger. He appointed a new management team
and established a plan for growth designed to propel the airline into a strong position within the
Asian airline market place. At the start of 2005 Tiger started to build its fleet of aircraft and in
parallel the airline launched plans for new routes to destinations such as Australia and India. It
very quickly became clear to the new management team that the current booking and reservations
system would be unable to support the future needs of the business, based on the growth plans
and the intention to operate additional aircraft and routes.

After reviewing the market options and a number of vendors, Tiger selected Open Skies, an IT
solution from Navitaire designed specifically for low cost carriers. A contractual agreement was
signed on 1st September 2005, with a goal to implement as quickly as possible. This complex IT
programme involved a high element of risk. As Tiger’s primary revenue stream is based on
customer bookings, the airline simply couldn’t afford for the project to go wrong.

Donna Clarkstone, Head of Distribution and Revenue Management at Tiger Airways, takes up the
story:

“The bookings database is the lifeblood of our business. It would have been a disaster if we lost
any customer booking details whilst migrating from the old system to the new. In addition, we
were also undertaking two other large-scale projects – implementing the Eurocommerce payment
gateway and upgrading our corporate website”.

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Tiger Airways: Roaring Ahead Of the Competition

“A big challenge and we recognised early on that we needed external programme delivery help.
We turned to DAV Management because we knew they had experience of working in the airline
industry, particularly with low cost airlines. We also knew that they had experience of dealing
with our third party software supplier, Navitaire. This, combined with DAV’s core expertise in
programme, project and commercial management, made them the obvious choice.”

The Scope Of Work

Software supplier, Navitaire provides Tiger with a hosted environment to run the Open Skies
system. The system provides functionality that includes Internet booking, reservations, scheduling
and planning and airport check-in. This involves maintaining complicated interfaces with ground
operations to book and reserve planes and further interfaces with a number of different call
centres and travel agents in different geographic locations, all of whom require access to the
system.

The scope of the overall IT programme was far reaching and touched every part of the business -
from the delivery of the new booking and reservations system, to installing a new payment
gateway for processing credit card transactions, to creating a new interface into the airline’s bank
as well as the delivery of the corporate website. IT and communications, in particular, are an
imperative in the airline business - security, speed, reliability and the ability to operate a round-
the-clock reservations service are a given for any low cost airline service.

Booking tickets on the Internet is the primary channel to market for low cost operations such as
Tiger. Should their Internet connection fail the airline would immediately lose revenue and put
its reputation at risk. Consequently, this large-scale IT programme not only involved migrating all
of Tiger’s current Passenger Name Records, (PNRs - unique booking references linked to each
passenger name and customer record) but in its execution, Tiger also needed to minimise
disruption to the business operation and ensure that passengers could continue to make
reservations during the implementation period, without losing any records. Tiger had to avoid the
potential chaos that could have been created, if PNRs were lost and passengers arriving at an
airport were faced with no reservations and no record of their booking and payment.

DAV was appointed to manage the implementation of the hosted Open Skies system within Tiger’s
business and the migration of data to the new system, as well as co-ordinate the activities
associated with Tiger’s ongoing project to replace the payment gateway and corporate website.
From the outset, DAV ensured that a consistent approach was adopted across all three projects,
that the interdependencies between them (in terms of Tiger resources, suppliers and technical
issues) were tightly managed and that an effective assurance process was in place to control the
quality of deliverables. In addition, as part of this role, DAV helped Tiger design and implement a
business process framework for the new solution. The programme was initiated in September 2005
and went live on 10th December 2005. This was an incredibly tight timescale, for a programme of
this size, in any business. Typical timescales would have been in the region of 6 – 12 months.

The programme represented an extremely high-risk for a young company such as Tiger. To ensure
that the implementation was successful, DAV provided a small programme management team
(comprising a Programme Manager and a Project Manager) to manage the following activities on
behalf of Tiger:

    •    Implementation of the new internet booking system

    •    Implementation of the new reservations and associated configuration systems

    •    Migration of Tiger PNRs to the Open Skies system

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Tiger Airways: Roaring Ahead Of the Competition

    •    Implementation of the required communications and IT infrastructure to support Opens
         Skies

    •    Development of interfaces to systems and business processes associated with the
         implementation of Open Skies within the business

    •    Delivery of Open Skies reporting

    •    Implementation of the Eurocommerce payment gateway

    •    Implementation of Tiger’s new corporate website

    •    Implementation of ongoing business and IT operation processes to manage the systems once
         implemented

    •    Co-ordination of Tiger and supplier resources to ensure that required tasks were completed
         on time to meet the programme plan whilst not impacting ongoing Tiger business
         operations

Record Timescales for Implementation
This was a business driven IT change initiative delivered in just 12 weeks. It required the entire
team (DAV, Tiger and Tiger’s suppliers) to work long hours, six days a week, over the 3-month
period.

In addition to the complexity of the programme itself, Tiger’s IT infrastructure is extremely
complicated and required further development to meet the needs of the programme. In particular,
a communications infrastructure was required for Tiger’s Eurocommerce payment gateway
(situated in Ireland), its bank (based in Singapore) and its database for communications (located in
Australia), whilst the software supplier, Navitaire, is headquartered in North America. The
differing time zones and locations embraced by the required infrastructure were another major
challenge that the team, under DAV’s management, needed to overcome.

DAV managed the main project in four separate work streams within a structured project
management (PRINCE2) framework. Firstly, a Specification and Design phase documented the
system requirements in terms of functionality. Secondly, a Configuration and Development phase
translated the design into a reality by creating software to:

    •    Manage the PNR migration

    •    Integrate the payment gateway with the bank and the Open Skies system

    •    Develop a new corporate website

    •    Establish a resilient communications network.

Subsequently, Testing at both a system and end user level was completed as a third phase, to
ensure that the system met Tiger’s stringent acceptance criteria. Finally, the Implementation
phase ensured a smooth cutover to the new operation.

At the start of the project, DAV’s strong commercial management expertise proved invaluable in
helping Tiger through the contract negotiations with all the third parties involved. The way DAV
structured the contracts helped Tiger to reduce its exposure to commercial risk. Furthermore,
DAV’s technical capability made certain that technical assurance was applied to the required
telecommunications network and to the interface testing activities.

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Tiger Airways: Roaring Ahead Of the Competition

Donna Clarkstone continues:

“Before we implemented the new payment gateway, we were only able to handle transactions in
Singapore Dollars. We could not sell flights in any other currency and we felt this was a major
issue that was holding us back, in terms of our ability to expand our routes and flights. With the
new payment gateway we can now handle multiple currencies and passengers can see flight prices
in their own currency.”

A final key component to the project’s success was that throughout the entire programme, DAV
acted as a broker, helping to manage the relationship between Tiger, its bank, Navitaire and
Eurocommerce, to ensure all parties were involved, onside and on track at every stage of the
programme.

Four months In

The successful migration from the previous to the new system will position Tiger to achieve its
business objectives. Tiger now has a system and processes to fuel growth. The airline made the
right decisions, at the right time, but more importantly, to the right quality. Part of the reason
why Tiger didn’t attempt to do this programme themselves is because they had to drive the day-
to-day business and the airline simply didn’t have the bandwidth to take on such a complex
programme of work. But more importantly Tiger understood that the management of complex
technology-driven business change programmes requires specialist skills and experience and they
recognised that this was not available in-house.

As a result of the new business capability delivered by the programme, Tiger expects that it will
meet the challenging targets defined in its growth plans and achieve the following benefits:

    •    The ability to significantly increase operational yield, increasing booking volumes and
         growing the business

    •    The opportunity to address new markets by allowing passengers to book tickets in their
         own currency (previously only Singapore Dollars could be accepted)

    •    The ability to minimise capital expenditure over the long term due to strong commercial
         relationships with its suppliers

    •    Its systems and processes are now aligned with the business and provide a solid foundation
         from which the airline can expand with confidence.

Tony Davis concludes:

“We already have additional functionality with our new system, creating innovative revenue
opportunities for us, something we were unable to do with our previous system. For example, we
now offer tailored promotions to existing customers such as ‘kids fly free’. The new payment
system enables us to improve our sales from destinations because passengers can see prices in
their own currency. And finally we are able to evaluate, analyse and provide better management
information, giving us more clarity over the shape of our business moving forward.

DAV did a superb job, the programme team really pulled together and became part of the ‘Tiger
family’. It would have been easy for us to drop our focus on the programme, especially as we
were all so busy doing our day jobs. DAV, whilst respectful of our work commitments and the
pressure we were under, never lost sight of the end goal. It has been a really thorough and
challenging process but we feel that we have learnt a great deal from the DAV team.”

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Tiger Airways: Roaring Ahead Of the Competition

In March 2006 Tiger moved to a new budget terminal at Changi Airport. Currently Tiger is the only
low cost airline to operate out of this new terminal. The airline has taken a long-term strategic
view and invested early in its business, ensuring that it is ready to compete aggressively in the
market against other low cost airlines.

About DAV Management

DAV Management (DAV) helps organisations to plan, manage and deliver complex, IT-enabled
business change programmes. DAV has five business aligned Service Offerings: Programme Delivery
Management, Outsourcing Programme Management, Business and Technology Turnaround,
Commercial and Contract Management and Offshore Project Management. Clients include: Alfred
McAlpine, bmi, Cable & Wireless, Department of Health, easyJet, ETIHAD, Global Crossing, Home
Office, Monarch Airlines, NHS, ntl, Reuters, Royal Mail, Scottish Equity Partners, Star Alliance.

For More Information

To find out more about DAV Management please visit: www.davmgt.co.uk.

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