Airlines put break on IT spending

Airlines expect to cut their IT spending as a percentage of their overall revenues next year as the recession continues to bite.

The decline in spending is despite airlines expanding their IT operations in growing areas such as social media, smartphone sales and passenger self-service.

At the SITA Air Transport IT Forum in Brussels this week delegates were told just 49 percent of airlines expected to increase IT spending in 2013. This decline compared to 66 percent of airlines planning to increase spending in 2011.

The results of the annual SITA/Airline Business Airline IT Trends Survey were an indication that the airlines were still overseeing a struggling industry, while at the same time they were facing operational demands from passengers who wanted an increase in customer service through new sales channels.

Francesco Violante, CEO of SITA, said the survey showed "cautious optimism" on the level of IT investment. He said IT spend as a proportion of revenue was expected to "stay stable" in 2012, but acknowledged a minority of airlines expected IT spend in 2013 to increase "in absolute terms".

In 2011, SITA said extra cash was spent by the airlines on areas such as mobile transaction systems, support for commercial social networking efforts, virtualisation technology and cloud computing. The total airline IT and telecoms spend estimated for 2011 was $20 billion (£12.5 billion).

In the new 2012 survey, 56 percent of airlines expected to make further investments in social media R&D, and 70 percent believed smartphones would represent the second largest business sales channel behind their own websites by 2015 - ahead of agents, social media and self-service kiosks.

For it's research SITA surveyed top IT executives at 200 airlines. The results include responses from half the top 100 airlines, it said. SITA is an air transport IT provider owned by the airlines and other industry players.

Copyright © 2012 IDG Communications, Inc.

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