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Case Study

 

How Thomas Cook Group Airlines Keeps Pace with Evolving Tourism Industry

by Lauren Bonneau, Managing Editor | insiderPROFILES, Volume 8, Issue 2

March 1, 2017

Thomas Cook Group

The digital economy is taking the travel and tourism industry to new destinations, and Thomas Cook Group Airlines knew it had to make the journey to digital business. As part of the airline provider’s digital business strategy, it strove for ways to automate, standardize, and streamline its processes. Previously, the airline’s IT landscape consisted of disparate solutions and non-standardized processes for handling tour operator and airport sales settlements. Learn how Thomas Cook Group Airlines sped up and streamlined these processes with the help of SAP HANA Enterprise Cloud.  

Advances in technology mean that the travel and tourism industry looks dramatically different today than it did just a few years ago. Today, travelers can check in to their flights from home the day before they fly, download their boarding passes right on their mobile phone, and receive real-time travel updates affecting their itineraries — not to mention the self-service kiosks where they can check their own bags and scan their fingerprints and eyes while going through customs. And with travelers relying heavily on reviews and recommendations through social media and travel sites such as TripAdvisor, it’s clear that technology has shifted the balance of power dramatically in the customer’s favor. To stay competitive, businesses in this industry need to evolve to these changes and adapt to the new demands and expectations of future travelers.

Thomas Cook Group Airlines, a division of Thomas Cook Group, plc, recently invested $125 million in new technology for all 95 aircrafts of its four airlines: Thomas Cook Airlines Belgium, Thomas Cook Airlines UK, Thomas Cook Airlines Scandinavia, and Condor Flugdienst. Combined, these airlines fly nearly 17 million passengers each year to 100 destinations, and more than 9,000 employees are dedicated to satisfying customers’ every need.

As part of Thomas Cook Group, plc’s digital business strategy and change management initiative, Thomas Cook Group Airlines elected to undergo a process consolidation project to harmonize, automate, and accelerate business processes with an aim to increase the agility and flexibility that digital business demands. After implementing a new inventory and reservation system in the fourth quarter of 2015 to help tour operators and airlines reserve flights, hotels, tours, and packaged vacations, Thomas Cook Group Airlines had a vision for new technical possibilities. Specifically, the group saw an opportunity to create an integrated billing solution that would consolidate the settlement of the services that its airlines render to tour operators — the airlines' own tour operators as well as contracted external tourism companies — in a shared service center. This integrated solution would involve streamlining payment solutions, agency management, reporting, and revenue accounting and settlement for the airlines.

Previously, each airline had its own applications and financial processes. The prior system environment included proprietary solutions for tour operator settlement, SAP ERP for financials, and an SAP Business Warehouse (SAP BW) application landscape mainly used for housing data from a non-SAP customer relationship management (CRM) application. With over 10 million customer records and growing, the system performance was becoming less than optimal. “With the low performance of the CRM application, we could no longer do the necessary customer analysis and segmentation online,” says Hans Dresler, Head of Airline IT Delivery, Thomas Cook Group, plc. “With better performance we could understand our customers much better, so we decided to replace the legacy applications with an integrated solution to carry out the settlement processes in a standardized way and with IT support.”

Without investing more money into the hardware infrastructure, customer data would not be usable anymore, according to Dresler. After performing a cost assessment of potential solutions, Thomas Cook Group Airlines found it would have been more expensive to upgrade the individual SAP BW systems used by the airlines in Germany, the UK, and Belgium than it would be to migrate the data to a new database. Therefore, in addition to the settlement solution, the second part of the project was to consolidate the airline’s SAP BW systems.

Thomas Cook Group

Hans Dresler
Head of Airline IT Delivery
Thomas Cook Group, plc

Response times for queries have been accelerated more than 60-fold compared to before. Queries that used to take around 20 minutes now deliver the required results in less than 20 seconds.

— Hans Dresler, Head of Airline IT Delivery, Thomas Cook Group, plc

Soaring with SAP HANA Enterprise Cloud

During the evaluation phase for the project, SAP offered the winning proposal, complete with support from SAP Consulting and a private managed cloud in a highly secure, high-availability data center. “A cloud solution managed by SAP best fit the strategy of our airlines because we have to operate from many destinations with different partners and suppliers,” says Dresler. “We decided to go with SAP and SAP HANA Enterprise Cloud because of the very professional services offered to implement the private managed cloud infrastructures, and also due to the highly automated process for migrating the existing customer data to the new SAP HANA database.”

To reduce the risk for the project and the new platform, Thomas Cook Group Airlines elected to perform both parts of the project in tandem when creating the new system environment. The first half of the project was to roll out the integrated tour operator accounting and airport sales settlement solution, Airline Revenue Clearing and Information System (AiRCIS), which aims to speed up data processing when generating settlements.

This solution is based on the sales and distribution functionality of SAP ERP, runs on a dedicated SAP HANA instance in SAP HANA Enterprise Cloud, and is provided to end users as a managed cloud service with web-based access using SAP Fiori applications. “SAP software was our first choice for operator settlement because it enabled us to integrate this financial process more closely with our financial accounting, which is mapped in SAP ERP,” says Dresler.

The solution went live with the tour operator accounting piece in January 2016, only three months after the project launched, and included an SAP Fiori app for creating sales orders to automate tour operator invoicing and reporting. Within the first five months after go-live, roughly 900 invoices had been created or sent to tour operators and transferred to SAP ERP Financials. In parallel with the AiRCIS rollout, the second half of the project, which also took just three months to complete, involved consolidating the SAP BW landscape by migrating the data to an SAP HANA instance running in the SAP HANA Enterprise Cloud.

Journey to Standardization and Speed Continues

Sales and accounting end users now have faster and easier access to the data they need. The SAP Fiori apps provide drill-down capabilities that have improved analysis and management reporting. Core processes, such as flight reservation and booking, have been standardized and are nearly 100% automated. The individual airlines have achieved a higher degree of standardization in operator settlement, increased efficiency, and lowered process costs. And consolidating SAP BW onto a central system on SAP HANA Enterprise Cloud has had dramatic results. “Response times for queries have been accelerated more than 60-fold compared to before,” says Dresler. “Queries that used to take around 20 minutes now deliver the required results in less than 20 seconds.”

The airlines are currently developing additional functionalities for the AiRCIS application to handle ancillary sales and are working to integrate online data feeds to get customer data in real time. With these continued advances, Thomas Cook Group Airlines is focused on the future and dedicated to better customer service.

Dresler offers advice to any other companies that might be looking for a platform to keep pace with the future digital world: “You need a partner with enough experience to handle the technical challenges,” he says. “And be sure to start with a non-critical application before you roll out a more important one.”

Thomas Cook Group Airlines

Headquarters: Frankfurt, Germany

Industry: Travel, tourism, and transportation

Employees: 9,000+

Revenue: $3.5 billion (€2.8 billion)

Company details:

  • Parent company: Thomas Cook Group, plc
  • Operates from 15 source markets
  • Airlines carry 16 million+ passengers per year to 100+ destinations
  • Combined fleet consists of 95 aircraft, including 25 new Airbus A321 that joined in 2016
  • (LSE: TCG) www.thomascookgroup.com

SAP solutions:

  • SAP HANA Enterprise Cloud
  • SAP ERP
  • SAP BW

Thomas Cook Group

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