BA ups IT investment to £85m

British Airways has reaffirmed its commitment to increasing investment in IT despite continuing pressure to cut costs across the airline.

Speaking to silicon.com at the company's annual internal IT fair, BA CIO Paul Coby said new IT investment has been set at £85m for the current financial year – up from £65m in 2002.

The airline revealed plans for 3,000 to 5,000 job cuts back in January and while there are still no details on how this will impact the 1,900-strong IT department, Coby said there is a danger that any losses would impact the transformation programme.

"We have to reduce costs but improve quality and that's a tight rope to walk. But technology is key to taking cost out," he said. "The IT department must be challenged the same as other parts of the airline but we need to be careful not to reduce the cost of the IT department to the point where it impacts on the airline."

Coby outlined the next step for BA now that the cost saving targets for the airline-wide Future Shape and Size programme, which was started after September 11, have been reached – total savings of £869m actually exceeded the £650m target.

Central to this is the further exploitation of technology implemented as part of the Customer-enabled BA (CeBA) programme, which will save £100m of annual costs.

Coby cited a ream of statistics to show BA is moving towards being a truly web-enabled paperless business - a quarter of customers now use ba.com before travelling with BA and 93 per cent of BA employees use the 'self service' intranet portal for things such as staff travel, payslips, uniforms and crew rostering.

Other initiatives underway include more self-service check-in kiosks at airports and functionality to allow passengers to print off their own boarding cards at home. This is currently being used at Edinburgh and will be trialled at Manchester and London Heathrow later this year.

Coby said initiatives such as this put IT at the core of BA's business and make the department much more than an internal operation.

"It's actually mainstream. We are a customer-facing department. We are absolutely frontline," he said.

Work is also progressing on the new Terminal Five at Heathrow, where BA will switch all its Heathrow flights to from 2008. The overall construction project is being handled by airports operator BAA, but BA is already working on the technology plans.

One of the key factors will be that no new or experimental technology will be used when the Terminal Five opens.

"This thing has got to last BA and the UK and London for the next 50 to 100 years yet we have to design something that will work on day one," said Coby. "Don't put anything in there that hasn't been working for one year already. It's got to be proven technology. I have to curb any instinct I have towards innovation."