Malaysia inks ten year SITA deal

Malaysia Airlines has entered into a ten-year contract with SITA
for its Horizon portfolio of passenger management solutions which will play a key
role in achieving revenue enhancement and cost savings of more than $27 million (RM
100million) yearly as well as the success of the airline’s Business Turnaround Plan
(BTP). An agreement to this effect was signed last Friday in Subang, Malaysia by Malaysia
Airlines’ Managing Director/CEO, Idris Jala, and Richard Stokes, SITA Senior Vice
President for SITA, Passenger and Travel Solutions.

Idris Jala said, “The long-term health and prosperity of Malaysia Airlines will be
guaranteed through the type of business transformation we expect to see as a result
of our strategic partnership with SITA. The Horizon portfolio will allow us to
replace our existing reservations and inventory management system within three to
five years.
“Both SITA and Malaysia Airlines are so committed to fast-tracking the Business
Turnaround Plan that much of the preparatory work for implementing a new
state-of-the art Passenger Service System had already been carried out prior to
finalizing and signing the contract at the weekend.”

Richard Stokes, SITA Senior Vice President for SITA Passenger and Travel Solutions,
said, “This is one of the most exciting business transformation projects SITA has
ever undertaken. We are looking forward to putting the innovation at the heart of
the Horizon portfolio at the service of one of Asia’s great airlines.”
The SITA IT software enables Malaysia Airlines to develop a Passenger Service System
(PSS) for the upgrade of its frontline operational capability and business processes
for an investment of over RM300 million (approx. $100 million) spread over 10 years.


These solutions will keep the national carrier abreast of the industry best
practices, focused on five core business processes, namely ticketing, fares
management, revenue integrity, distribution and departure controls. It will also
provide flexibility to support its growing business requirements in the most cost
effective manner. This will be achieved with the phased introduction of the PSS
solutions in, amongst others, e-ticketing and pricing decision support.

The PSS will also replace core components of its existing KOMMAS reservations and
inventory management system within 3 to 5 years.

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The state-of-art PSS will support the ‘Flying to Win Customers’ and ‘Mastering
Operational Excellence’ thrusts of Malaysia Airlines’ BTP through a structured
implementation strategy focused on several enhanced revenue improvement modules. The
PSS will thus automate validation of business processes and rules to optimize yield
and load. Customers will be able to take advantage of the E-commerce platform
convenience for effective self-administration of their bookings which will also
reduce distribution costs for Malaysia Airlines.

Commenting on the specifics of the contract, Idris Jala, said, “Using SITA’s
e-commerce platform we will be able to achieve significant reductions in
distribution costs while at the same time making it much easier for the traveling
public to do business with us through greatly improved on-line booking capability.
We will also meet IATA’s deadline of December 2007 for the introduction of
e-ticketing.

“Our yield and load factors will improve as Malaysia Airlines starts to feel the
benefits of improved pricing and fare management support. Faster decision making
will allow us to be competitive in all markets and through all distribution
channels.”
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