The sky’s the limit

George Henderson, IT director for the new low-cost business airline Silverjet, has a challenge for technology departments around the world. In just nine months, the fledgling company constructed a web site, integrated it with the reservations system, created a call centre structure, installed IT in the offices and built two airline lounges: ‘I don’t think anyone else has done it that quickly before. I’d love to hear from them if they have.’

The concept for Silverjet was born two years ago, after chief executive Lawrence Hunt had a particularly bad flight back from San Francisco. ‘I thought there had to be a better way,’ says Hunt. ‘If you fly economy it takes you a day to recover, but if you fly business class, it means shelling out £5,000. With our airline you can fly business class to New York for about £1,000.’

After months of hard work, Silverjet took off for the first time in January. It flies once a day between London and New York, with plans to increase to three flights a day by the start of next year.

Henderson grew up and went to school in Edinburgh, but did not go to university; he studied recreational management at college. His first job in London was as an assistant manager at a leisure centre in Chiswick in 1987 – just as the first IT systems were being introduced.

‘I could see the business benefit from the fairly rudimentary IT system: it could automate a whole range of front- and back-office procedures and operations. It made our jobs a lot easier,’ he says.

The experience whetted Henderson’s appetite for IT and he joined Delta, travelling around the country for seven years installing, maintaining and supporting systems in more than 40 leisure centres. He then joined tour operator Kuoni in 1997, and has been in the travel industry ever since. ‘I had always been interested in travel,’ he says. ‘I have friends who say: “We envy you. We work in insurance and all we talk about is boring stuff.”’

Henderson says Kuoni’s IT systems were way ahead of those of its competition, with the business creating the necessary software to allow clients to customise holidays over the phone. ‘Other agents would have to say: “I’ll write that down, price it up and call you back in 24 hours.” Invariably, the piece of paper would get lost, the call would never be made and the consumer would end up angry,’ he says.

Kuoni’s advanced systems made it easy to work with the internet and Henderson was involved in the launch of the first web site in the UK to offer an online tour operator booking system. He then went to Switzerland to work on a pan-European internet strategy for Kuoni, and at a conference in Geneva, he met Hunt.

After several months, Kuoni decided not to pursue the project any further and Henderson returned to the UK to work for Hunt at Dreamticket – an online reseller of package holidays. Dreamticket, however, ran out of cash and soon folded.

Henderson joined the travel site Opodo, which was then in its infancy. The site was formed by nine competing European airlines who did not want to give all their commissions to firms such as Expedia so decided to create their own internet portal.

Henderson says that his five years working for Opodo taught him many hard lessons about creating an online presence for a startup company, particularly how easy it is to waste money. ‘It’s easy to make expensive mistakes by investing in the wrong technology and paying consultants too much for things you can do yourself.’

Opodo’s birth was just after the dot com bubble had burst, but conventional wisdom said that to be a significant force online took big sums of money. Its launch budget was £249m. ‘When I consider what we have achieved at Silverjet, on a very small decimal point of that launch budget; it’s food for thought,’ says Henderson.

Although Opodo was a startup, it was far from a simple hierarchy – given it was owned by nine airlines. This structure made for complicated reporting lines, which had implications for flexibility. Silverjet, however, is a classic startup and its flat structure comes as a relief to Henderson. ‘There is much less bureaucracy, you have a much greater chance to influence the company and it is just much more fun,’ he says.

Rather than hankering after Opodo’s mammoth budget, Henderson says that having less money to spend is liberating. ‘If you have £5m to £10m to spend on an IT system, it is much more difficult to decide to write off that expense if it turns out to be the wrong investment,’ he says. ‘If you are spending less and it goes wrong, then you don’t have the same emotional attachment.’

Henderson also finds Silverjet’s planning horizons easier to deal with. ‘The whole management team is thinking two years, not five years, ahead,’ he says. ‘That makes it much easier for the IT director to say: “I might need more money to replace this all in two years’ time, but it is the right investment to make today,” and the board will green light the decision.’

Henderson’s remit at Silverjet when he joined in June 2006 was to provide all the technology necessary to get an exclusive business class-only airline off the ground. There have been two key systems to design – the web site for consumers and a system for call centre agents to access.

Despite Henderson’s mistrust of consultants, the company did use a web site designer because he believes that online presence needs to be carefully thought through to ensure information is easily accessible and engaging enough to keep people on the site.

The internet booking engine, and the reservations system and hosting, is provided by Videcom. The call centre shares the platform and the same system ensures that the right passengers have made it on board the aeroplane and that there is enough food for the flight.

Silverjet has now taken to the skies and Henderson has hit his targets to have the IT infrastructure up and running in time for the launch. But it is not yet time to sit back and relax – now the airline faces the biggest challenge of all: making enough money to keep its investors happy.

The airline believes that positioning itself as a low-cost, business class-only carrier will attract some high-end leisure passengers, and it aims to generate about 30 per cent of its sales from the web. But its core market is managers and directors of small and medium-sized businesses who do not have the clout of big corporations to reach deals with the large airlines.

Getting access to that market poses the biggest challenge for Henderson. ‘To get to these clients, we have to be on the four global distribution systems (GDS) that travel agents use to find flights for their clients,’ he says. Each of these four systems holds details of all the flights and prices offered by the world’s 550 airlines. They are huge businesses and their data centres are managed with military-style security in remote locations.

But the size of the GDS can make their decision-making processes more complicated. In the same time it took for Silverjet to build its own web site from scratch, the airline just about managed to sign contracts with the GDS. Despite signing the contract in August last year, one of these companies has not even started the process of adding Silverjet to its systems.

On top of the GDS challenge, Henderson still has the energy to dream up other ways that technology could help improve Silverjet’s custom service, such as being able to book your flight or check in via your mobile. The airline is also considering introducing personalised luggage labels with a radio frequency identification (RFID) tag that would trigger a sensor when the customer arrives, so that staff can greet the client personally.

But for the next year or so, Henderson’s major challenge is to get access to the all-important GDS so that the airline can ensure its planes fly with the maximum number of passengers.

If Henderson can get four bureaucratic institutions such as the GDSs to be more nimble than usual, he will really have something to shout about to other IT directors working in the leisure sector.

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