AS THE screens froze and then went blank at Virgin Blue’s check-in counters around Australia on Sunday morning, the glitch did more than ground the travel plans of 50,000 people for a couple of days. Unintentionally, the breakdown exposed the secret life of airlines.
These days, they are not what they seem. Increasingly, airlines are fronts for a maze of private companies that do the unglamorous stuff, from loading bags and cleaning the toilets, to the glossier roles of front-of-house check-in and boarding duties, and plenty in between.
These companies provide meals and snacks, run IT systems to sell you tickets online, and to run the call centres that take your calls. (Customers who call discount airlines’ help numbers invariably end up in Asian call centres, where the labour is cheap and English is taught in schools.) Some even lease aircraft -that come with their own pilots and crew – from an aircraft leasing company or even a rival airline.
Airlines don’t disclose this, not willingly, anyway. Indeed, there’s little reason to, not when everything is running as it should. It is only when things come unstuck, as they did for Virgin Blue this week, that the public gets a glimpse of the behind-the-scenes operations that enable passengers to fly halfway around the country in one of humanity’s most complex machines for prices that can be as low as the cost of taxi to the airport.
These modern airline machinations include the phenomena of outsourcing and unbundling – each the opposing face of the airline business coin. With outsourcing, airlines look at ways of cutting costs to the bone so they can offer fares cheaper than competitors or provide a better return to shareholders. They do this by finding specialist companies that can offer new or better ways of doing things.
By unbundling, airlines pan for revenue gold beyond the face value of the fare; that is, charging separately for all the other things on offer – food, drinks, priority seating and boarding, bigger baggage allowances, penalty fees and so on.
But outsourcing and unbundling can fail spectacularly and this came as a shock to the tens of thousands of travellers around the country’s airports on Sunday and Monday who had simply bought a ticket for a plane flight, only to find people in airline uniforms didn’t have a clue what had gone wrong and what was to be done about it and when.
The ”staff” may have been wearing the satin neck ties and embroidered shirts of an airline but some weren’t airline employees at all. Some are actually on the payroll of companies that those outside the aviation industry have probably never heard of. These are the aero services companies, such as Aero-Care, Menzies Aviation and Toll Dnata that offer so-called ”above the wing” services such as counter, check-in and lounge staff for airlines, and/or ”ramp” services that include baggage-handling, replenishing stores on board and cleaning planes.
”They [travellers] don’t know. The training is identical, the uniforms are identical, they’re audited to the same standard, there’s no perceivable difference to the travellers,” says Aero-Care’s general manager, Glenn Rutherford, about the staff he contracts to airlines.
”Statistically, based on the performance reports that we do, we do it at least as well as they [airlines] do it,” Rutherford says.
Aero-Care, which began by cleaning corporate planes in 1992, now employs about 1400 people to do above-the-wing and ramp duties. It deploys about 700 counter staff to Virgin Blue terminals in Canberra, Darwin, Cairns, Gold Coast and Townsville, to all of Tiger Airways’, to SkyWest and to a lesser extent for Jetstar.
”They [Aero-Care] are the experts in ground-handling in Australian aviation, and also with their economies of scale, it’s more efficient,” says Tiger Airways Australia spokeswoman Vanessa Regan.
”It’s striking the right balance of providing us the expertise in that area and providing us with the cost efficiencies across the country we need.”
Others, such as IT ”solutions” companies Amadeus and Navitaire, spruik their computerised reservations, check-in, boarding and baggage systems to airlines.
As as it turned out, Virgin blamed Navitaire for Sunday’s reservations meltdown. Never heard of it? It is a subsidiary of Accenture, itself a reincarnated management consulting offshoot of the former chartered accounting firm Arthur Andersen.
Navitaire, whose head office is in Minneapolis in the US, specialises in providing IT programs to airlines. It has an outpost in Sydney. It declined a request for an interview.
Navitaire runs Virgin Blue’s computerised bookings, reservations, check-in and boarding systems. It also is contracted to do the same job for Virgin’s rival Jetstar.
Virgin Blue’s new chief executive, John Borghetti, is believed to prefer Amadeus, the system his former employer, Qantas, uses.But Amadeus has not been without its share of check-in and baggage dramas either.
Aero-Care’s Rutherford defends how his staff handled Virgin’s crisis this week.
”That particular scenario was the biggest single failure you could have as an airline. It’s happened with other airlines around the world. Our staff are trained in the full corporate emergency response plan, as all airline staff are,” he says.
”The effort of the staff, and the commitment that they made
