The Growing Role of Information Technology in Air Cargo

1. The Growing Role of Information Technology in Air Cargo Peter O’Sullivan Senior Vice President, Cargo & Logistics Kale Consultants Ltd

2. Introduction A look at the role Information Technology (IT) plays in both supporting and enabling the air cargo industry Kale Consultants – who we are Today’s air cargo industry Where have we come from? Industry pressure and technical innovation How IT in the industry has evolved Where is the industry heading?

3. REVENUE ACCOUNTING SOLUTIONS CARGO SOLUTIONS TRAVEL SOLUTIONS MANAGED PROCESS SERVICES (BPO) SOFTWARE DEVELOPMENT SERVICES Kale Consultants Indian based company, offering innovative and professional solutions and services to the Travel & Transportation industry 3 development centers in India plus offices in New Jersey and London 900+ professionals, 70+ customers, solutions in 30+ countries ISO 9001:2000, BS 7799, SAS70, Amadeus certified, TIACA Trustee, IATA Associate, NASSCOM member. BSE/NSE listed. We provide:

4. Snapshot of today’s air cargo industry* • Global air cargo industry represents 100bn rev ton-miles and $52bn in direct revenues in 2005 • Air cargo companies are investing around 2% of their revenues in IT - an estimated $1bn • The main priorities in the industry as a whole appear to be: • Projects with proven pay back / cost savings • Process simplification • Solutions that provide market advantage • Strategic infrastructure upgrades (e.g. retirement of legacy systems) • While the percentage of investment in IT (as proportion of revenue is decreasing), the number of employees in air cargo IT is going up. No doubt, IT investment is immense. We need to understand what direction it is moving towards * Information from recent reports, including from TIACA and Airline Business/Sita Survey

5. IBM - FAST Cargo IT Industry – early days UNISYS - USAS From early 1970s until mid to late 1990s, IT in the airline cargo industry was provided by few suppliers For example, in the airline business… SITA hosted solution Airline variants Unisys hosted solution Airline variants • Mainframe technology • Variants were created (usually by airline IT departments) and peripheral ‘bolt on’ systems added • Hosted solutions were modified by the Hosted Service providers for common good • System to system interfaces were provided, usually through EDI (Cargo-IMP), and sometimes through third party communication enablers Early systems focused on providing the operational basics. But change was soon on its way – fuelled by a combination of Industry Pressures, and Technical Innovation

6. Geopolitical Demands Fundamental Industry Change • Heightened Security measures • Governmental decisions, e.g. • sell offs and mergers • Environmental pressures, e.g. • excessive (and unnecessary) • amounts of paper. • Open Skies / deregulation • Market shifts • Express operators eating into • traditional carrier territory • Low cost players • Alliances Industry pressures have created new IT demands Internal Business Pressures • Passenger downturn • Rising operational costs • Business expansion Industry pressures Heightened Customer Expectations • Commodities 365 days a year • Delivery on demand • Raised performance • demands The air cargo industry has been able to respond to these pressures thanks to rapid advances in technology

7. Greater awareness;Informed decisions; Better planning Relational Databases Improved MIS, Data Mining Accommodate business change; Phased deployment Componentisation Flexible and Modular Code Integrated business; new access to market; entices custom Internet / World Wide WebPortals, Browser, J2EE, .NET Cheaper communications, greater reach; simplification, XML / SMTP / Type X / FTP Multiple channels; peer-peer Faster operations; Greater accuracy; Mobile workforce; Wireless Technology Hand Held Devices, RFID Focus on core business; Service guarantees; Predicable costs Greater ScalabilityHosted applications Earlier solutions; Rapid software upgrade; Smarter design CASE ToolsLow cost development Easy deployment; Expansion of business; Low cost maintenance High Bandwidth/Thin Client Centralised Computing Technical Innovation enables advantage Technology is changing RAPIDLY It creates new possibilities It can bring advantage in a competitive market The combination of industry demand and advancing technology has led to a new focus for IT solutions

8. The changing nature of IT Cost Mgt Strategic & Tactical Systems IT has moved upward. First towards “Decision Supporting Systems” and ultimately on to “Decision Making Systems” Rev Mgt Service Mgt Evolution Market Mgt Fleet plan Allotments Prioritisation Decision Support Systems CRM Yield Control W/H Mgt Load Control Book / No Book Inventory Mgt Scheduling Bookings Reception Customs Operational Systems ULD Control Manifest Tracking Paperwork EDI Reconciliation Billing Stock Control Accounting Information Technology can do much more than support business – it can truly enable business and empower the executive

9. The changing nature of IT The Strategic and Tactical Systems need quality, integrated information to succeed Cost Mgt Rev Mgt Service Mgt Like any robust wall, the foundations must be solid. Market Mgt Fleet plan Information Allotments Prioritisation Higher IT services cannot be provided without a firm base CRM Yield Control W/H Mgt Load Control Book / No Book Inventory Mgt Scheduling Bookings Reception Customs ULD Control Manifest Tracking Paperwork EDI Reconciliation Billing Stock Control Accounting Information Technology can do much more than support business – it can truly enable business and empower the executive

10. Cargo Portal Providers GF-X, CPS, Ezycargo Revenue Management System Providers Sabre, Pros, Manugistics, etc Connectivity Enablers Forwarder Solutions Traxon, Tradevan, BT, Descartes, etc Traxon, Cargowise, Tran-Soft, Fountainhead, Freightdata, etc Who fills the IT market? There are now many IT companies servicing the Airline Cargo Industry Reservations and Operations System Providers Cargo Revenue Accounting System Providers Unisys, Kale Consultants, IBS, Champs, CargoSpot, SITA, etc Kale Consultants, Mercator, CDM, SITA, Sabre, ACCA, etc Ground Operations Solution Providers Claims Management Solution Providers Kale Consultants, Magic, ABS2000, Lufthansa IS, CargoSpot, etc Sabre, Pros, Mercator, etc Other solution providers Companies providing Hosted Service Systems Customs Interfaces: Syntegra, MSSI, LH IS… DG Solutions: Channel Solutions… Security Systems: Indian Technologies… Staff planning: Sabre, Qintic… ULD Management: SITA, Kale, Unitpool, etc. Unisys, Kale Consultants, SITA, Champs, etc The list is growing Good news for the air cargo industry !

11. Where are we heading? ACCELERATED LEGACY OVERHAUL • Legacy systems being replaced PORTAL BASED SOLUTIONS • Users can sign up, connect, and use. INTEGRATED SOLUTIONS • Less ‘interfaced’ solutions MOBILE COMPUTING • Access anytime, anyplace with PDAs CUSTOMER CENTRIC SOLUTIONS • Web solutions that allow customers to directly access information • More information pushed out to more customers • Aggregation of customer information for sales people PROFIT MANAGEMENT SOLUTIONS • Revenue and Cost Management • Revenue based decisions B2B SOLUTIONS • Opening up the freight market STRATEGIC SOLUTIONS • Based on high quality data • Revenue and Cost Management HIGHLY CONFIGURABLE SOLUTIONS • Allowing off the shelf solution that can be tailored INCREASED EFFICIENCIES • Earlier recognition of service failures • e-freight

12. Kale Consultants: enabler of air cargo growth Business Strategy and IT Alignment Kale helps forge / shape direction of the air cargo business by providing innovative solutions to industry problems Business IT Enablement Kale ensures that ensures that potential business strategies and business opportunities take full advantage of emerging technology capabilities Business/ IT Alignment Kale ensured its IT activities and investments are tightly aligned with business priorities IT Alignment IT Enablement E D N R A I V B N L E A IT Management & Delivery Information Technology Management & Delivery E S B S IT IT Management & Delivery Kale’s IT resources are structured, positioned, sourced and managed for efficient, effective and predictable delivery of high quality IT solutions

13. Thank You