Oracle lands deal to build airline marketplace
The database software maker says it has won a contract to provide the software that will run Aeroxchange, a new online marketplace planned by a consortium of airline giants.
The new online exchange will use Oracle's e-commerce software, which offers online auctioning, reverse auctioning, contract and spot-buying. It will also use the company's collaborative supply-chain planning tools to help participating suppliers automate their inventory demand and product-planning needs.
The new entity will handle more than $45 billion in airline purchases of goods and services, excluding aircraft and fuel, the database software giant estimated in a statement. Items that will be traded through Aeroxchange include a wide range of airline-specific products and services, such as engine components and maintenance.
Like a number of technology providers, including Commerce One, Ariba, SAP and IBM, Oracle has been moving aggressively to capture deals in the lucrative business e-commerce market. The database software giant has been developing large industry marketplaces that help connect businesses with their massive supply chains over the Web in an effort to cut costs and reduce the amount of paperwork involved in purchasing goods and services.
Founding members of Aeroxchange include Air Canada, All Nippon Airways, America West Airlines, Cathay Pacific Airways, FedEx Express, Japan Airlines, Lufthansa, Northwest Airlines, Scandinavian Airlines System and Singapore Airlines. Air New Zealand, Austrian Airlines and KLM Royal Dutch Airlines are additional equity partners.
Aeroxchange is one of several online marketplaces focused on the airline industry. In April, American Airlines, Air France, British Airways, Continental Airlines, Delta Air Lines and United Airlines unveiled plans to launch a United States-based company to build and operate an online marketplace that will handle purchases and sales of items such as fuel and fuel services, engine components and maintenance equipment.
Aeroxchange, which will officially launch in the next few months, will be open to its founding members, all airlines, other industry-related companies and their suppliers.
A number of aviation and aerospace players have also recently jumped on the business e-commerce bandwagon. Earlier this year, United Technologies, Honeywell and i2 Technologies said they intend to launch MyAircraft.com, an electronic marketplace for aerospace products and services.
The airlines follow companies in other industries, such as automotive, chemical, construction and retail food, that have adopted similar strategies to trim the costs of purchasing supplies.
One of the largest exchanges announced so far is Covisint, an industry marketplace formed by General Motors, Ford and DaimlerChrysler to connect the world's top automakers and their 30,000 suppliers. The marketplace is expected to boast annual transactions valued at more than $300 billion. Oracle, i2 and Commerce One are all involved in the development of the exchange.