Qantas failing on IT cost cuts?

The IT-related expenses of Australia's largest airline Qantas remained flat over the last six months of 2009 compared to the same period in 2008.

Six months ago, Qantas' self-described "quasi chief information officer" David Hall, whose formal title is executive manager of corporate services and technology, told a business lunch in Sydney that he believed Qantas could cut its IT costs by $100 million over the succeeding financial year.

However, for the half year to 31 December 2009, Qantas' computer and communications costs were $212 million, down only slightly compared with the $215 million costs for the half year to 31 December 2008. The airlines' IT costs for the year to 30 June 2009 had actually risen 6.3 per cent overall to reach $406 million.

Qantas did today list $24 million of benefits in the half attributed to technology improvements as part of its QFuture transformation program. The 2010 target for benefits realised from the program is $500 million, with some of that to come from IT transformation.

The airline has been substantially changing the make-up of its technology support operation over the past couple of years. For example, in August about 200 of its staff were offered positions at IBM as part of an outsourcing arrangement targeting Qantas' program delivery arrangements.

Qantas also undertook a number of other outsourcing arrangements last year — it switched suppliers for desktop services from Telstra to Fujitsu and inked a deal with Perth-based IT services group ASG for application support.

Today the airline included scant details on any of its technology initiatives in its results presentations documents, saying only that its Frequent Flyer division had committed investment in customer relationship management systems and was expanding new in-flight entertainment systems across additional planes.