SITA is hoping to overcome the reluctance of carriers to upgrade their legacy cargo systems through a new joint venture company with Luxembourg-based cargo carrier, Cargolux.

The as-yet unnamed company will combine the expertise of SITA's widely used FAST 4 air cargo system and that of CHAMP, the IT solution created by Cargolux and now spun off as a separate company. Together the new venture will have a customer base of 56 cargo-carrying airlines. The result, according to Francesco Violante, managing director of SITA INC (Information Network Computing), will be a company with sufficient strength and market presence to persuade airlines to switch from old-fashioned mainframe-based systems to new-generation solutions.

The cargo departments of carriers have so far been reluctant to abandon legacy solutions despite the difficulty of adapting them to cope with modern developments such as XML messaging and RFID tagging. However, Violante is convinced that major carriers are ready to make the move to new-generation systems. "We are in contact with several airlines who are at the point where they can't evolve their legacy systems any more. Carriers are also seeing the cargo business growing faster than the passenger business, and can see that they need to invest in it," he says.

There are also pressures on leading airlines to conform to such initiatives as Cargo 2000, an IATA-backed group of forwarders and airlines which is moving towards piece-level tracking of cargo. This would require airlines to make major investments in new IT systems. The new company will offer airlines a step-by-step approach to change rather than a big-bang solution, according to Violante. "It will not be a sudden impact, but a smooth migration to a new-generation system over the next five years."

The new joint venture is the second attempt by SITA to change the paradigm in cargo systems. In 2001 it launched WorldTrading@SITA, a pay-per-transaction hosted system for forwarders, airlines and ground handlers. However, this was quietly shelved early in 2003 due to lack of demand.


Source: Airline Business