14-17 wyld trolleys

14 Global Identification - October 2008

We business travelers who prefer to sit in the aisle seat

know its pluses and minuses all too well. The pilot has just announced that your plane has just reached its cruising altitude, and you’ve settled in for your flight. Depend-ing on your travel style, you open the novel that you brought on board, turn on your laptop to work on your presentation (or more likely, to watch a movie), or simply put on those noise-cancel-ling headphones and begin your side-trip to dreamland. The aisle seat is desired for ‒ at least the feeling of ‒ extra leg and elbow-room.

by Prof. David C. Wyld, Southeastern Louisiana

University

However, it does come with one significant down-side, as all too often, one’s knee, one’s shoulder, or even one’s head (if you are one of the lucky ones who promptly falls asleep when in the air) can be in hazard-ous territory. That is because no matter how careful the flight attendant may be, you may fall victim as he or she pushes a humble airline trolley down the aisle. Your reading, your work, or your sleep can be abruptly ended by a bump from this metal cart. A good nap for you may be ruined, all so your fellow passengers can enjoy soft drinks, snacks and duty-free items. In an industry shaken

by rising fuel costs and low-ered demand that threaten the viability of many carri-ers around the globe, airline trolleys are increasingly be-ing viewed as key elements in most airlines’ strategies ‒ and perhaps their very sur-vival. Why? In a nutshell, it’s because these simple metal carts are the workhorses of airline customer service, which is still not regarded as an oxymoron by airline exec-utives. They are the vehicles through which food, bever-ages, and a variety of service items are routed through a complex internal and ex-ternal network to provide in-flight passenger service. However, today they are also

focus on AIRPORT SECURITY

With rising fuel costs and turbulent economic skies, airlines are realizing that ancillary

revenue streams are more important than ever. And RFID can help assure the safety of

such streams, improve their efficiency and even improve customer experience


Moving away from

turbulence

15www.global-identification.com

fast becoming the retail floor for the airline industry.

In the aisle of the commer-cial airliner, before a captive audience, airlines know that trolleys represent the fu-ture of a changing business model, increasingly depen-dent on what is referred to in the industry as “ancillary revenue.” Yet ‒ akin to the problems associated with Unit Load Devices detailed in another article in this issue ‒ airlines often have no idea how many of these critical assets they own, where they are stationed, and what con-dition they are in. In fact, ac-cording to the International Air Transport Association (IATA), airlines typically have to buy three to five chipsets (the quantity of trolleys re-quired to fill all aircraft galley positions) when outfitting a new aircraft, just to ensure that they will have sufficient trolley stock available across their network of operations. Thus, this is an area ripe for the application of auto ID technology, even given the limited financial ability of carriers to make capital ex-penditures at this moment.

RFID and Airline Trolley Management

As part of its “Simplifying the Business” Initiative, the IATA has targeted a wide range of

airline operations that could be better managed and help achieve cost savings through the application of RFID tech-nology. In a study conducted last year, the organization found that the world’s air-lines could achieve both im-mediate and long-term ben-efits from RFID-based trolley tracking. Airlines would ben-efit from improved business intelligence to optimize the management of their trolley stock. They would be able to dramatically reduce the number of trolleys in opera-tion, achieving present ser-vice levels by eliminating un-necessary safety stock, and have improved capabilities to manage the maintenance of trolleys. In the latter re-

gard, the IATA believes that maintenance can be made much more proactive than it is at present, as all too often, flight attendants must work with inoperable or damaged

trolleys. Furthermore, as trol-leys are commonly interlined between air carriers and be-tween catering services sup-porting airline operations, the improved inventory ac-curacy and movement-track-ing capabilities will provide further savings.

The IATA also found that through improved tracking of the food and beverage contents of trolleys (with some long flights requiring upwards of 50 trolleys to service a full flight), airlines could cut costs by reducing the number of wasted meals, while bettering the in-flight experience of customers with special diets and other needs. To date, RFID pilots for


RFID can play a central role in airline management ‒ from baggage to parts to in-flight service

RFID solutions can help

airlines optimize the potential

of the plane’s cabin to

generate ancillary revenues

photo by Irishflyguy

Moving away from

turbulence


gence would translate into better management of their trolley stock in the field and the contents on-board the trolleys.

RFID and the ush for ancillary revenue Beyond the IATA’s push for the cost savings that can be achieved through the use of automatic identification technologies, RFID now has the prospect of enhancing the all too bleak financial picture for airlines. Indeed, the business press has been replete with bad news for the airline industry of late.

All over the world, from the United States and through-out Europe and Asia, airlines are facing fast-rising costs, as jet fuel becomes their largest expense item by far. They are also flying into a headwind, as demand for travel is fall-ing in the wake of an eco-nomic downturn, and due to the greater availability of increasinlgy more techno-logically advanced tools that enable us to feel ever-more connected with each other and allow us to meet and collaborate as never before. Air carriers have a product that is all-too-often viewed by many ‘jaded’ consumers as a commodity. And yet, the key here is that air travel has become a commodity.

As reported in an August 2008 report entitled “Ancil-lary Revenue Generation: The New Operational Imper-ative for Airlines,” as point-to-point transportation for passengers becomes regard-ed as the base service level, all other services ‒ checked baggage, meals, beverages, headsets, etc. ‒ will increas-ingly be offered only for the additional revenue streams they can generate. As such, more and more airlines worldwide are adopting the business models pioneered by low-cost European carri-ers, such as Ryanair and Easy-jet. While U.S. airlines made headlines this past summer by implementing fees for checked baggage, meals and soft drinks and even cer-tain coach seats, all of these actions may be precursors for a new business model for the airline industry. Ad-vocates point to the fact that last year, the world’s airlines generated over $2.5 billion in such ancillary revenue, with growth rates of 20-30% per annum. As the extra be-comes the core, new revenue can be generated by not just traditional airline services, but expanded in-flight en-tertainment and shopping, as well as gambling. In fact, Ryanair CEO Michael O’Leary believes so strongly in the possibilities of ancillary rev-enue that he plans to offer half of the airline’s seats for free by 2010. RFID-based trolley tracking will play a central role in this “brave new world” for the airline industry. With the newfound emphasis on of-

trolley tracking through pas-sive RFID systems have been ongoing with Air Canada and KLM/Air France and their ca-tering suppliers, with results expected in early 2009.

The IATA has constructed a business case showing that trolley tracking will provide quick ROI for airlines, often in the 12 to 24 month range, and even shorter if RFID trol-ley tracking investments are combined with an overall RFID strategy involving bag-gage handling, ULD tracking, and surveillance of parts and safety equipment. Overall, the IATA estimates that while costs and benefits will vary based on the size and route structure of each air carrier, the world’s airline industry could achieve almost half a billion dollars in annual sav-ings from RFID-enabled trol-ley tracking, over and above the almost $50 million in immediate acquisition cost savings from reduced trolley purchases to support their present operations (with trolleys typically ranging be-tween $600-$1000 per unit).

The IATA believes that air-lines that implement RFID-based tracking systems for their trolleys would experi-ence immediate benefits from having increased vis-ibility and control over their trolley inventory. This increased business intelli-

focus o

n AIRPORT SECURITY

RFID tracking systems for trolleys can bring instant benefits with better visibility and inventory control

photo by Irishflyguy


become commonplace of-ferings ‒ everything from expanded alcohol offerings to enhanced entertainment options ‒ such control will become essential.

Testing times

Clearly, the airline industry is being tested as never be-fore. It will take imaginative leadership to surmount to-day’s challenges and thrive in tomorrow’s marketplace. However, it is clear that RFID will play a central role in air-line management ‒ from baggage to parts to in-flight offerings. As we have seen in this article, the lowly airline trolley should now be an area of focus for both airline executives and RFID vendors.

Indeed, applying auto-ID in this one aspect of airline op-erations could be central to cutting costs and growing the now all-important ancil-lary revenue. And with the path to ROI relatively clear, it would appear that the next few years will see the advent of smart trolleys across the world’s airlines.

fering an array of food and beverages for sale, as well as new in-flight entertainment options, flight attendants will be tasked with being sales agents for these ancil-lary revenue items. As such, it will become increasingly important to have properly stocked trolleys with passen-ger consumables ready for use. Further, contactless pay-ment systems will be crucial for not just enabling fast and easy transactions and reduc-ing the need for cash han-dling, but also for ensuring inventory tracking, account-ability, and control. Already, the IATA’s tests of RFID have shown its potential for reducing shrinkage from today’s food and beverage carts. When, in the very near future, higher dollar items

In-flight meals may not be to

everyone’s taste, but for airlines

they represent a steady, secure

stream of revenue

The specialist in contactless Smartcard and RFID read/write modules andsystems for a wide range of applications:

: access control: time & attendance: e-purse, electronic cash and ticketing: e-passport and company cards.

Besides standard products for integration of direct use, BALTECH offerscustomized solutions based on its existing core technologies.

BALTECH AGLilienthalstr. 2785399 HallbergmoosGermanyPhone ++49 (0) 811-99881-0

www.baltech.de

Innovative Technologies

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BALTECH

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photo by Tim Burts

14-17 wyld trolleys

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