IT on the increase says SITA

Posted by- Neelam Mathews in Brussels

July 3, 2011

The 13^th annual SITA/Airline Business Airline IT Trends Survey says airlines carrying 57% of the world’s passenger traffic have reported a real increase in IT and Telecommunications (IT&T) expenditure and are ready to spend big on passenger mobile services and other transformative technology.

The Airline IT Trends Survey is an independent poll of senior IT personnel working within the top 200 passenger carriers.
Launching the 2011 Airline IT Trends Survey today, Paul Coby, Chair of the Board, SITA, said: “I see IT spend as the barometer of overall air transport industry confidence. Passenger numbers and revenues are picking up, so we are seeing airlines focus precious investment funds on the areas that really make a strategic difference – like IT.
“The air transport industry has been quick to capitalize on the mobile computing evolution which started three years ago with the arrival of the first 3G-enabled smartphones. The number of airlines actively selling tickets on mobile phones has almost doubled from last year and we see clear plans now to offer richer functionality in the form of ticket upgrades and modifications,” said Francesco Violante, SITA CEO.

Major Observations:

·         Overall, operational IT&T spending has remained stable at 1.8% but this represents a significant increase in actual expenditure following a return to profitability in the last 12 months after two years of recession.

·         Compared with 2010, 50% of airlines are reporting an increase in total IT&T spend while 32% report no change and 18% state there has been a decrease.

·         The outlook for 2012 is also positive with 54% of survey respondents expecting budgets to increase, and 29% expecting them to remain the same. 91% of airlines plan to invest in passenger mobile services and 93% are prioritizing virtualization technology.

·         Virtualisation and cloud computing are going to be critical for both IT efficiency and managing cost. 93% of this year’s survey respondents plan to implement virtualization technologies.

·         Survey respondents spoke of success in pushing more traffic and sales through their websites with corresponding improvements in ancillary sales and up-selling.

·         Airlines continue to increase the proportion of tickets sold via their directly controlled distribution channels.

·         Passenger mobile service offerings from airlines are set to explode in the next three years with 91% of responding airlines planning to invest in mobile device-based services for passengers over the next three years.

·         85% of airlines either already sell (33%) or plan to sell (52%) tickets through mobile phones by 2014, and most plan to extend mobile functionality to include ticket modification/upgrades and sales of onboard services.

80% of airlines either already have or plan to have some presence on social networks and using social networks for “Promotion of products and services” has the highest level of implementation to date (41%).

This year’s survey underlines how travel distribution has become a multi-channel environment with kiosks and social networks joining mobile phones as important emerging sales channels; 70% of airlines already sell, or plan to sell, tickets through kiosks and social networks by 2014. At present, 19% sell tickets through kiosks, and 16% through social networks.