Airlines to change systems to cope with OFT regulations

The high-tech strategy of leading airlines hangs in the balance, following an investigation this month by the UK Office of Fair Trading (OFT).

The OFT is concerned that airline contracts do not guarantee financial compensation to customers whose flights are rescheduled. "We want contracts to be reviewed, amended or dropped," a spokesman told Silicon.com. "Our ultimate sanction is court action."

The OFT wrote to the International Air Traffic Association (IATA) on June 8, and has been promised a response shortly.

Despite the ongoing investigation, many airlines are evaluating sophisticated information systems so they can cancel even more flights at the last minute, on the grounds that they are not cost-efficient.

Joachim Sasse, product manager of Lufthansa Systems' MarWin, told Silicon.com: "Before MarWin was developed, the profit management staff could only access the relevant data via the IT department - which took a long time. With the introduction of MarWin, it is possible for the staff to get the data in just a few seconds. For example, they can determine an under-capacity on a flight which departs the same day in a very short time - and maybe do a cancellation or an equipment change."

Sasse said that British Midland, Singapore Airlines, Ansett Australia, SAS (Scandinavia), and El Al (Israel) had all shown interest in investing in the Lufthansa system. "Our priority is to sell it to members of the Star Alliance," he continued.

Alliances between airlines, such as Star Alliance, OneWorld and Atlantic Excellence, mean that passengers can easily be rescheduled from a cancelled flight to a member airline.

The alliances are adamant that their first - and only - priority is customer service. But IATA spokesman, Tim Goodyear, said alliances transferred passengers to their member airlines all the time to cut costs on under-capacity flights. "They're not trying to get out of their responsibilities, but the name of the game is to fill as many seats as possible," he told Silicon.com.

The OFT said its investigation would certainly cover group airlines.