THE IMPLEMENTATION OF ANALYTIC HIERARCHY PROCESS TO IMPROVE DECISION MAKING PROCESS IN SELECTING BUSINESS PARTNER IN PT GARUDA INDONESIA (PERSERO) TBK CASE STUDY: SELECTION OF INFLIGHT WIFI PROVIDER FOR DOMESTIC FLIGHTS

Abstract

To cope with intense competition in the region, Garuda Indonesia is providing internet wifi to some of its passenger and planning to add more to make the service available across the fleet. Apart from adding competitive advantage, the purpose of providing the service is to establish solid foundation for broadband based ancillary revenue. Asia Pacific region, airlines revenue from broadband access service is forecasted to be over $5 billion by 2028. This huge amount of revenue pie also goes parallel with the massive penetration on uprising internet’s users in Indonesia. Equipping dozens amount (+/- 70) of aircrafts with such service is considered as a big strategic planning for the company as it involves a lot of complexity. The business partner selection needs to go to a very thoroughly procurement process in order to select the best partner. Analytical Hierarchy Process is one of the best tool that Saaty introduced to accommodate such situations. With the help of pairwise comparison, users can translate various needs and judgements from different profession’s perspective in the company into an agreed consensus that can accommodate all the requirements needed to determine the rank of importance for criteria and sub-criteria as the specifications to select the business partner for inflight wifi. Benefit, Opportunity, Cost and Risk was decided as the main drivers for selection, from which then translated into 11 sub-criterias (Satellite Capacity, Bandwidth Flexibility Model, Ancillary Revenue Platform, Revenue Share Scheme, Extended Partnership, Product Upgrade, Capital Expenditure, Operational Expense, Administration Expense, Product Maturity and Vendor’s Portfolio. With the help of SuperDecisions software, all the contributing factors for selection then being calculated against each candidate’s offer based to find out the winner for the procurement process of business partner for inflight wifi.
Keywords : inflight wifi, business partner selection, analytical hierarchy process