The Asia-Pacific Region

The sky's the limit for SITA's growth

SITA, with regional headquarters in Singapore, places great importance on its relationship with Japan, the largest economy in Asia. SITA SC, its communications services arm, counts among its board members Shunichi Saito, an executive officer at JAL, and ANA is another important customer.

Japan is sometimes thought of as a difficult place to do business, but SITA has not found this to be true. In the past Japanese companies may have been unwilling to outsource services to companies in which they did not hold shares, but today they are eager to outsource IT services. Even though JAL has its own IT subsidiary, SITA has been able to take on consulting and infrastructure elements of its business, saving the airline money.

In Japan, SITA manages some of its own services and subcontracts others. Its subcontractors include Equant, and SITA INC. In terms of business development and consulting, SITA has local people on the ground, who are supplemented by experts from Singapore and Hong Kong. The company does not see Japan as different in the provision of services. The main task is to transfer data and voice from one place to another, and this requires the same techniques in Japan as in other countries.

But Japan is only one country in a region holding ever-greater importance for the air transport industry. SITA ended last year with a record amount of business in the Asia-Pacific region. One reason was that the restructuring of the company's worldwide organization, started in 2003, has led to a flatter, more responsive managerial chain.

There are now only four levels of management, making it easier for customers to gain access to the company's deci-sion makers. This is reflected in an impressive 98.9 per-cent level of customer retention for the Asia-Pacific region.

Another boost to regional profits resulted from introducing flexible and low-cost IP-based networks to replace expensive 'legacy' networks. According to the 2005 Airline IT Trends Survey, conducted by SITA and industry magazine Airline Business, over 70 percent of airlines in the Asia-Pacific region anticipated that their systems and sites would be IP-enabled by the end of the year.

The restructuring has impressed upon management that SITA must operate like any other company. SITA SC CEO Hans-Peter Kohlhammer claims today's ultracompetitive business environment "keeps him awake, and focused on what he can do to make the company better." The director-general of the largest part of the SITA Group now aims for 2 percent profit. So in addition to remarkable price reductions across legacy and IP connections, a fur-ther US$20 million has also been shared amongst share-holders and customers, which Asia-Pacific, as the com-pany's new growth area, will clearly have benefited from.

This year SITA expects revenues from Asia-Pacific to exceed US$200 million, which would be more than North America's contribution to gross revenues. SITA SC provided its parent company with US$940 million last year, US$182.2 million of which came from business in Asia. In Asia-Pacific, the sky's the limit for SITA. - J.C.