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Need of IT in Australian airlines

Discuss about the Transport Market for Transportation Research.

The report depicts the role of Information technology in an organization Australian airlines one of the well known companies of airlines industry. The technological advances are relying on IT to develop the business (Belobaba, Odoni & Barnhart, 2015). It helps to improve the consumer’s services and keeps the lid of the cost. The report illustrates the need of IT in Australian airlines including the importance of IT for the business survival. Apart from this, the report elaborates the usage of information technology in the Australian airlines.

It has been found that technology is a gift but at the same time technology are also a curse to Australian airlines and other industries. After adopting IT, Australian airlines faced continuous acceleration in business growth however; many disadvantages are also associated to it. The risks related to IT are also defined in this report. Moreover, in order to develop the overall airlines business, proper control and monitoring system is needed to be introduced.

The current analysis of Australian airlines implies that, in order to mitigate the industrial crisis, airlines industry is forced to adopt information technology with their existing business aspects. In the business world, airlines industry is referred to as the biggest winner of the internet or electronic commerce service (Ashwini Nand, Singh & Power, (2013). In the year of 2015 the airlines industry has spend over $180 million to develop the technical strategies (Arjomandi & Seufert, 2014). For the maintenance of control cost and to maximize the revenue structure the, airline industry is accelerating towards IT project planning in terms of electronic marketing, web site development and initiatives in the consumer services (Borenstein & Rose, 2014). Nine most well known organization of United States has reported about $2.38 million collective business loss.

The cost of airlines generally includes two segments direct operational cost and indirect operational cost. The direct operational cost include aircraft, fuel and the monthly remuneration of the employees working for the airlines industry whereas, the indirect operational cost include the entire distribution cost (Fuellhart & o'connor, Kevin, 2013). The industry charges about 60% of the total cost for the direct operation and 40% for the indirect operational cost. Cur off in direct operational cost is not possible as the direct cost is referred to as almost fix (Higham et al., 2016). Thus, most of the airlines organizations are focused on reducing the indirect cost of the industry. Implementation of IT in the airline industry is needed for the below mentioned reasons:

Importance of IT for Australian airlines business survival

It reduces the reservation system cost

The sales office cost also get reduces by implementing IT in the airlines industry.

The advertisement and sales cost also get reduces.

After introduction of online ticket booking the amount of tax also get reduced.

For the survival of Australian airlines, implementation of Information technology is strictly required. It helps to improve the additional revenue structure. After adaptation of IT in the existing business platform the company gained different technical advantages (Lee & Worthington, 2014). From business perspectives it helps to provide different opportunities and advantages to the business.  

Innovation of new technical advances: In order to survive in the technical world, the Australian airlines should start cutting the indirect cost to improve the revenue very quickly (Berghöfer & Lucey, 2014).  In the area of crewing and pricing, IT helps to minimize the cost budget for business operations.  

Software advances: The arrival concept referred to as software, helps for the survival of the industry (Chakrabarty & Kutlu, 2014). It does a lot for the agility of the airlines industry and also helps them to move to the opposite direction from costly legacy system.

Cost: In order to manage different information regarding airlines industry, proper management of data is strictly and for that implementation of software and hardware is also needed. Before real life execution, cost estimation and feasibility study is needed to be done. Therefore, exact investment is one of the major IT requirements.   

Planning: Before execution of manual database system for data management, proper planning is required to be done for IT business survival.  

Designing: An exact SDLC (Software Life Cycle) methodology is required to be followed by the designer, to implement the planning and modeling.

Equipment: Different equipments are needed to be installed by the airlines industry, to develop the designing approach made by the developers even, regular update program is also needed to be arranged.  

Installation: To keep the data confidentiality exact antivirus software is required to be installed so that none of the external attackers could hack the data from the storage.  

Training: Regular training and development program for the employees of the airlines industry is needed to be arranged to keep them connected withal the innovative technologies. Even if the employees are not familiar with the technologies then also they will become known to the technologies.

Factors uses in Australian airlines


Internal factors



1.      The employees who hold the legal status in the Australian airlines industry are very efficient and in order to keep the management process secured, staffs play vital role.

2.      The employees of Australian airlines works collaboratively on every project. Even the staffs are very helpful and due to shifting hours they are capable to serve proper services to the organization (Belobaba, Odoni & Barnhart, 2015).  Reward function in terms of incentives is also allotted for the employees.

External factors



1.      The industry is capable to hold a bunch of consumers throughout the world and it also has a manual data base management system where the details of the consumers can be safely kept.

2.      For Australian airlines, Airlines suppliers play a vital role. In order to meet the requirements of the consumers like security appliances such as life jackets, oxygen mask other like magazines, drinking water, foods are supplied by the suppliers of Australian airlines (Borenstein & Rose, 2014).

Revenue: After implementing IT in the business process, the company becomes capable to achieve benefit from the competitive marketplace. After implementing manual database system the information handling approach has become much efficient than traditional process. Online ticket booking and consumers care forum helps to engage more number of consumers throughout the world without error. This approach leads to gain rapid growth in terms of commercial revenue.  

Analysis of the requirements that can be applied in IT business

Flexibility: After implementing IT in the business model of Australian airlines, the management system has become reliable and flexible. Data regarding the consumers and even about the industry itself, can be easily accessed by the authenticated users only.  

Reduced cost: Due to online transaction, the process become capable to reduce the cost allotted for governmental tax. As the IT system does not have any sort of intermediately processes, thus during the processing period, the estimated cost is also not get affected.

During assessment of business process of Australian airlines, certain risks associated to the system are needed to be considered. Proper analysis will help to understand the cost benefit analysis of the business process (Higham et al., 2016). Regarding data security the factors that are needed to be analyzed are as follows:

Security: Proper encryption key is not applied in the Australian airlines industry thus the stored in the database system are not secured enough from the business perspectives (Young et al., 2015). This is referred to as one of the major drawback or risks of the business system.

Privacy: Different organizations have their norms, policies and practices to run their business process.  However, the airlines organization does not have proper privacy statements.    

Confidentiality: In order to keep the data secured from external attacks, confidentiality is required to be adapted in the business process. The company is lagging to serve confidentiality in their stored information (Borenstein & Rose, 2014). Due to lack of confidentiality management the external users can hack data by using public key. This is referred to as another vital risk associated to the business process.

In order to handle the overall management system the top managerial team of Australian airlines is needed to control and monitor the entire business process. Proper network management, database management system is needed to keep (Fuellhart & o'connor, Kevin, 2013). Particularly, for this airlines company regular update of software, technologies and hardware are needed to be maintained so that, it can avoid the risk involved to the business process.  


From the overall discussion it can be concluded that Australian airlines, a real life example is affected by IT in different ways. The business process has been completely changed before and after the implementing IT in their organization. The report has mentioned, need, and importance of IT in business. After installing IT in the business how it is affecting the consumers and staffs are also illustrated in this report. Apart from this, during the analysis session it has been found that many risks are also associated to the business process after installing IT, which are needed to be mitigated. Australian airlines is positively as well as negatively affected by IT, all the aspects are clearly demonstrated in this report.


Adler, N., Fu, X., Oum, T. H., & Yu, C. (2014). Air transport liberalization and airport slot allocation: The case of the Northeast Asian transport market. Transportation Research Part A: Policy and Practice, 62, 3-19.

Arjomandi, A., & Seufert, J. H. (2014). An evaluation of the world's major airlines' technical and environmental performance. Economic Modelling, 41, 133-144.

Ashwini Nand, A., Singh, P. J., & Power, D. (2013). Testing an integrated model of operations capabilities: an empirical study of Australian airlines. International Journal of Operations & Production Management, 33(7), 887-911.

Belobaba, P., Odoni, A., & Barnhart, C. (2015). The global airline industry. John Wiley & Sons.

Berghöfer, B., & Lucey, B. (2014). Fuel hedging, operational hedging and risk exposure—Evidence from the global airline industry. International Review of Financial Analysis, 34, 124-139.

Borenstein, S., & Rose, N. L. (2014). How airline markets work… or do they? Regulatory reform in the airline industry. In Economic Regulation and Its Reform: What Have We Learned? (pp. 63-135). University of Chicago Press.

Bush, H., & Starkie, D. (2014). Competitive drivers towards improved airport/airline relationships. Journal of Air Transport Management, 41, 45-49.

Chakrabarty, D., & Kutlu, L. (2014). Competition and price dispersion in the airline markets. Applied Economics, 46(28), 3421-3436.

Fuellhart, K., & O'CONNOR, K. E. V. I. N. (2013). Air services at Australian cities: change and inertia 2005–2010. Geographical Research, 51(1), 37-48.

Higham, J., Cohen, S. A., Cavaliere, C. T., Reis, A., & Finkler, W. (2016). Climate change, tourist air travel and radical emissions reduction. Journal of Cleaner Production, 111, 336-347.

Lee, B. L., & Worthington, A. C. (2014). Technical efficiency of mainstream airlines and low-cost carriers: New evidence using bootstrap data envelopment analysis truncated regression. Journal of Air Transport Management, 38, 15-20.

Young, J. P., Win, A. K., Rosty, C., Flight, I., Roder, D., Young, G. P., ... & Hauben, E. (2015). Rising incidence of early?onset colorectal cancer in Australia over two decades: Report and review. Journal of gastroenterology and hepatology, 30(1), 6-13.

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