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Industry challenges are forcing Middle East airlines to rethink their IT and business models, said IBM after signing two major aviation deals in the United Arab Emirates (UAE).
Last month, IBM announced it had signed a 10-year technology services agreement with Emirates Airline, based in Dubai, UAE, worth about $300m. The deal came hot on the heels of another 10-year agreement, worth $700m, with UAE national carrier Etihad Airways last October.
The two agreements are different in nature; the Emirates deal aims to provide fully managed services for IBM mainframe and storage, helping the airline to encrypt data in near real time, while the Etihad deal is more about leveraging the latest cloud-based technologies and services by building a new cloud datacentre in UAE capital Abu Dhabi.
But in both cases, the airlines are using IBM’s technology and experience to overcome industry challenges, IBM told Computer Weekly.
According to the company, the Middle East’s travel industry is under pressure to deliver a more customised and “remarkable” travel experience. But that is easier said than done in a market expecting to see passenger growth of 4.6% a year up to 2034, according to IATA’s latest passenger forecast.
There is added pressure on the UAE’s two main carriers because the UAE government wants to see the country become a global aviation hub. Dubai International has already overtaken Heathrow as the world’s busiest airport, but the UAE is not resting on past successes. More than $8.1bn is being invested in Dubai’s second airport, Maktoum International, to cater for an influx of visitors for Expo 2020 in Dubai.
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To cope with the expected growth, and to meet customer demands, IBM said airlines in the region need to “transform” their IT infrastructures and adopt technologies such as cloud, cognitive computing, mobility and analytics, as well as invest significantly into powerful security.
IBM said this approach will help Middle East airlines’ “business model transformation and innovation”, adding that regional carriers need to partner with a global IT organisation to help them.
“IBM is playing a key role by helping to reduce IT complexity and enhancing business flexibility to support dynamic business changes and assist airlines to provide an enhanced passenger experience,” the company said. “Each airline has its own requirements and business priorities.”