Information technology savings reaped from a merger of Qantas and British Airways could run into tens of millions of dollars as the
carriers renegotiate contracts and consolidate computer systems.
The merger could also lead to the cancellation of major capital
projects - including investments in business software at BA - and
bring write-downs of recently built platforms that are no longer
While the full extent of IT savings is unclear because BA does not
provide a detailed breakdown of technology costs, analysts have
suggested information system synergies would be notable, as they have
been in the merger of Air France and KLM.
One BA supplier said the British carrier spends about £250 million
($576 million) on information technology, while Qantas has said it
pumped $382 million into IT during 2008 and would invest a similar
amount in 2009. Areas where savings could be made include the
renegotiation of procurement and services contracts to take advantage
of new economies of scale, as well as the elimination of duplicated
hardware, software and data centres.
The carriers are already closely aligned in a number of areas, which
could diminish savings but would reduce integration risks.
Importantly, Qantas and BA have long used the same software to run the
parts of their operations most visible to customers.
Both use the Amadeus Altea platform for functions such as sales,
reservations, inventory management, and check-in and boarding. The
common platform means Qantas and BA are able to directly allocate
seats to passengers in each other's aircraft.
The airlines also have some service providers in common, and both use
India's Tata Consultancy Services for software support.
However, they differ significantly in other areas.
BA is committed to SAP software for its maintenance system while
Qantas is installing a $120 million maintenance platform, known as
Marlin, which uses technology from Mxi Technologies.
Marlin may prove to have advantages over BA's technology because it is
already configured to handle maintenance for the A380 superjumbo,
whereas the British airline does not expect to take delivery of its
first A380 until 2012.
Any merger would also have implications for the enterprise software
platforms used to manage the airlines' finances, human resources and
Qantas recently upgraded to a financial system from Oracle, while BA
runs Oracle and SAP enterprise resource planning technology.
BA said in June it was considering moving to a single enterprise
resource planning system and a merger with Qantas could put that work
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