Effect of Information systems on the Aviation industry


Aviation industry: An overview

The aviation industry traditionally grew due to increase in demand of business travellers as the companies started expanding their operations in different places all over the world. Moreover rise and income of the people had a positive effect on the tourism industry and thus leading to the growth of aviation industry. Deregulation and Privatisation of the aviation industry provided further impetus to its growth. In the last decade, the growth rate in the aviation industry has been about 7% per year. Thus aviation industry remains a large and growing industry. It facilitates world trade, tourism, economic trade and thus leading to globalisation.

Effect of Information systems on the Aviation industry

Information Technology has affected the airline industry to a great extent in various aspects like Airline reservations, air-craft design, e-ticketing, simulators and training, GPS, RFID, security check, flight and airport management and control. Flight and airport management and planning includes flight information display systems, airport operational database systems, air traffic control, staff management displays, invoicing and ledger systems etc.

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IT has revolutionised the reservation systems such that it has become an industry of its own. The five main computerised reservations systems are Galileo, Sabre, Amadeus, Pegasus and worldspan. Since they interlinked different airlines price competition came into picture. Then came online reservation system called E-Ticketing which further helped to reduce the costs since it lead to direct interaction between the passenger and the airline without inclusion of agents. The IATA has started an initiative to convert all paper tickets to e-tickets to reduce wastage of paper. IT has also led to the development of self service kiosks to reduce queuing issues and speed up check in process. IT also developed radio frequency identification technique to resolve lost luggage issues. Other benefits of Information systems in aviation industry have been GPS, Simulators, Security systems, billing invoice and ledger systems etc.

Finance and Accounting Information systems in aviation industry

Along with other departments like human resource management, sales, marketing, Information systems have also been very useful in the financial department in the aviation sector. The various information systems used by the finance and accounting department in airline industry includes Aeronautical Billing System which handles airports revenues, Air traffic control billing, Aeronautical invoicing system involving cash and credit invoicing, (Credit invoicing allows for multi currency invoicing) and finally Ledger systems which contains all the information about sales and purchase ledger and nominal ledger. In addition many systems can be developed having following modules: Bank reconciliation, Stock control, Payroll, Fixed asset register, Purchase order processing etc.

One of the examples of information system which can be used by the finance and accounting department in the aviation sector is Sirax Airfinance platform developed by Lufthansa systems.

Sirax Airfinance platform by Lufthansa systems

With respect to the uncertainties that airlines are facing today, Sirax Airfinance platform can prove to be of great help to the airlines as it provides the right information at the right time. It keeps the airline updated about their operations and financial condition. It provides the airline with timely, accurate and valuable information that can not only help the particular airline to review the current strategies and campaigns but also helps them to a great extent to decide on the future plans, strategies and campaigns.

For example:

Consider an example of Mark working as a marketing executive in a XYZ airline. He decides to use the television media to launch a special promotion. During accounting, Sirax Airfinance platform assisted Mark to identify regions where the commercial was aired and compared it with ticket sales in those particular regions. Also he was able to compare current sales with previous month’s sales and also with sales in the regions where commercial was not aired. In this way Sirax Airfinance platform helped Mark to assess the effect of the promotional campaign statistically and assess whether it was successful or not. It also helped Mark decide the future plans promotions and devise strategies accordingly. This will help XYZ airlines to capitalize on future opportunities and increase their profitability.

In situations of crisis or in case of unexpected circumstances, it is very necessary for the airline to get access of valuable accurate and timely information, which if not available can have lead to hazardous consequences.

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This is where Sirax Airfinance platform helps an airline to adapt quickly to an unexpected situation with its ability to provide valuable and accurate information at the right time helping in taking right decisions. Thus Sirax Airfinance platform is divided into three modules namely:

Sirax Revenue Accounting

Sirax Cost Accounting

Sirax Business Intelligence

fig. 1

Sirax Revenue Accounting

Sirax revenue accounting is the most important module of the Sirax Airfinance platform. It mainly involves modern revenue accounting, sales, data security and many other functions. It is the main source of highly useful revenue information. It includes the following sub modules:


It carries out the whole process of back office accounting. Sirax is used to generate reports on controlling and planning information that are used by the top-level managers for making decisions. It provides the airlines with powerful sales audit functions. Through automation it helps in reducing labour and operation costs and at the same time it improves the accuracy of revenue accounting.


It provides accurate accounting and invoicing information about credit card and debit card sales. Sales include internal (internet, call centre) external sales information (i.e. agents) and also in-flight sales and cargo business. Customer billing, credit card clearing, claim and charge back handling all these operations are done using SiraxCredit.


SiraxLink links different airlines and helps them to settle inter-airline claims reducing errors and thus workload and increases speed of payment. Transfer, loading and processing of invoices takes place in SiraxLink.


It includes commission, fare and tax audit and thus it forms the complete sales audit solution. It also processes agent debit memo and controls the payment process. Reports are generated from tax and fare audit in an ad hoc manner. It also manages balanced accounts.


There is a large amount if credit card data involved in airline revenue accounting. These data are very sensitive and their security and confidentiality is a very important issue. SiraxPCI fulfils the requirements of International Payment Card Industry Security Data Security Standard (PCI-DSS) and is certified by the latest PCI standard. In short, SiraxPCI maintains the security of important data and protects sensitive customer data.


It optimises complete cargo revenue accounting processes and stores in-depth information about cargo system. Interline billing and auditing are used an ad hoc reporting tool.

Sirax Cost Accounting

The Sirax Cost Accounting module is a very useful tool for airlines to optimize airport charges, fees, fuel costs and other flight related costs. It is divided into two sub modules:


It is an airport invoice verification system. It involves automation of auditing of station costs. It helps to identify discrepancies in the airlines own data and the airport data using high degree of automation.


It controls the charges involved in flight movements. It calculates costs like costs of take-offs and landings along with parking and handling charges and the other costs can be added manually. It consists of a general ledger where all these amounts are booked. Also SiraxCharge also helps in planning of budgets and simulation of flight events using the information it stores. In short, SiraxCharge is an effective monitoring system.

Sirax Business Intelligence

This module is very important as far as decision making and future planning is concerned. Depending upon the information provided by the previous two modules, Sirax Business Intelligence provides valuable, accurate and timely information through management reports. It provides the mangers with real time reports of airlines sales figures, flight revenue information which helps airlines to monitor their operations, optimize network and route structures and make quick and optimal decisions. It is also divided into two sub modules:


It integrates the business intelligence software with the data contained in Sirax Revenue Accounting. This helps to generate reports, charts, statistical data which can be used to make productive and quick analysis. It also helps to perform ad hoc queries. Sirax View Contains four major information sources namely sales, revenue, interline and productivity which it uses for the generation of reports.


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It provides updated (real-time) information about the profitability of the airlines by taking into account airlines revenues and costs. The analysis of the profitability helps the airline to make necessary changes in its operations, route and network structure to quickly adapt to the new circumstances. Also this tool helps the airlines to compare current profits with previous data. It also helps them to assess the current situation of the company and demand for services which can assist the airlines to make decisions about future plans and strategies to capitalize on future growth opportunities. The accuracy of the results is defined by the integration of various flight operations like flight planning, departure control all within SiraxCockpit. Thus in short, SiraxCockpit is a very useful, accurate and fast reporting tool.

Thus, Sirax Airfinance platform is a comprehensive tool which can be used an airline company to get real-time accurate information on its financial and accounting operations and thus it can become a very effective information system in the finance and accounting department of aviation sector.


Information systems not only help in improving the quality of service in the aviation industry but its ability to provide timely and accurate information also helps the airline to reduce costs increase its profits. As technology is changing and improving day by day along with continuous economic growth of developing countries like India there is still a large scope for further development of information systems in the aviation industry.