Global management consulting firm Accenture plc (ACN) appears to be on a contract winning spree. Recently, the company announced that Hong Kong's low-fare airline HK Express has implemented Navitaire-hosted New Skies® passenger reservation and SkyLedger® revenue accounting services.
Navitaire — a wholly-owned subsidiary of Accenture — offers technological and business solutions to the airline, high-speed rail and bus industries. The company mainly focuses on revenue generation and streamlining costs across reservations, ancillary sales, loyalty, revenue management, revenue accounting and business intelligence areas. Operating through offices in North America, Europe, Asia and Australia, Navitaire provides industry-leading technology services to more than 50 airlines and rail companies worldwide.
Technology has changed the way people do business and consequently, there is scope for increasing efficiencies and lowering costs by automating and streamlining routine functions. Navitaire’s technologies will facilitate HK Express in differentiating its services and creating tailored up-sell and cross-sell opportunities, in turn, driving revenue growth and profitability as well as enhancing customer experience.
Since it started operating as a low-cost carrier in Oct 2013, the company has witnessed substantial growth as over 1 million passengers have chosen HK Express within just a year.
Therefore, HK Express believes that Navitaire’s technologies will help it in achieving revenue generation targets as well as expanding footprint to 30 destinations by 2015-end from the 15 destinations that it currently caters to. Moreover, the company intends to add up to 25 aircraft by 2018.
Though the financial benefits of the deal are not yet clear, it is expected to generate additional revenues for Accenture capabilities in the airline vertical.
In spite of regular alliance formation and deal wins, competition continues to intensify steadily, especially from International Business Machines Corporation (IBM). Additionally, a strained spending environment may temper growth to some extent.
Stocks to Consider
Currently, Accenture carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the consulting industry are Stantec Inc. (STN) and Franklin Covey Co. (FC), both sporting a Zacks Rank #2 (Buy).
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