New e-marketplace set to save airlines £80m a year

15 March 2001
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15 March 2001 | Liam O'Brien

Nine of the world's largest air carriers are planning to save more than £80 million a year within three years through a major new trading exchange.

Cordiem aims to help streamline the aviation industry's £300 billion supply chain.

The carriers - Air France, American Airlines, British Airways, Continental Airlines, Delta Air Lines., Iberia Airlines, SAirGroup, United Airlines and United Parcel Service - want the site, which launched this month, to move swiftly from indirect goods to high-value direct goods such as aviation fuel, spare parts and services after its first year.

Their partners in the venture are technology companies Honeywell International, United Technologies and BF Goodrich.

Existing exchanges, which is backed by the airlines, and, supported by the technology companies, will close to make way for Cordiem, which is costing around £70 million to launch.

Paul Alexander, manager of Washington DC-based Cordiem, told SM: "However many paper clips you buy on this sort of site, you'll never save a lot of money. But if you sort out the supply chain, there are massive savings."

Fuel is expected to be one of the main areas of savings.

And the industry is estimated to hold more than £50 billion of spare parts held at airport workshops and stores. "If we can shave a couple of per cent off this alone, Cordiem will have paid for itself," said Alexander.

Cordiem, which is 60 per cent owned by the airlines and 40 per cent by the technology companies, is available for trading to any company that makes aviation industry purchases, he added.


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