SITA: Airlines to step up IT investment

IT budgets are expected to improve at the majority of airlines this year - 58 percent - while the global level of IT operational spending at airlines should reach an estimated $10 billion, according to research from industry-owned IT supplier SITA.

Operational IT spending is said to have remained "stable" in 2012 at 1.46 percent of revenues. On the back of higher industry revenues it meant IT spending in absolute terms stayed at the same level as 2011.

But this year airlines are expecting IT spending to pick up slightly to 1.52 percent of revenues. This optimism for increased IT spending looks set to continue with the majority of airlines also anticipating further IT budget
increases in absolute terms in 2014, while less than one in five is expecting a tightening in IT spend.

Over the next three years, all airlines plan to invest in IT systems which will allow them to "get to know their passengers better" and deliver tailored services directly to them, according to the 15th annual SITA/Airline Business magazine IT Trends Survey.

This year 100 percent of airlines surveyed planned to invest in business intelligence (BI) solutions, which allow them to know more about their customers and have better information for decision making in their operations.

This is a huge jump from last year, when one in five airlines had no plans at all. By 2016, 97 percent also plan investments in mobile passenger services and personalisation. Together these will help boost sales via direct channels, from 54 percent up to 67 percent, and change how airlines deliver services to passengers - much to the pain of the travel agents who are being continually squeezed in the market

At the publication of the 2013 Airline IT Trends Survey Results in Brussels this week, Francesco Violante, SITA CEO, said, “All airlines are investing in business intelligence to improve their operations and boost revenues. We see a strong desire to increase revenues using techniques borrowed from the retail industry, including personalisation."

He said, "Nearly three quarters of airlines rate business intelligence for sales and marketing as a high priority. The airlines’ investment plans show the future of the industry is smarter, more mobile and more personal.”

The need for investment in business intelligence is evident. Only 9 percent of airlines currently rate data quality as meeting all their requirements, while just 7 percent have achieved the necessary integration of different data sources from across their company.

Violante said, “Sharing and integrating data is fundamental to successful business intelligence solutions. To make it work all parties across our industry need to collaborate. By sharing data and working together, we can maximise return on investment and deliver a better passenger experience, as well as improved financial performance.”

Over the last three years, offering mobile services to passengers has topped airlines’ investment list. It retains the number one place with 97 percent of airlines now investing, or planning to invest, in this area in the coming three years. By 2016, nine out of ten airlines plan to sell tickets via mobile phones.

Currently, 53 percent of airlines provide mobile boarding passes through their own airline application and this is set to rise to over 80 percent in 2016.

The Airline IT Trends Survey is an independent poll of senior IT personnel working within the top 200 passenger carriers. Airlines representing half of the global passenger traffic responded to this year's survey.

At the SITA Air Transport IT Summit, where the research was published, the 300 delegates from airlines and airports heard of mammoth IT upgrades at important airport hubs such as South American gateway Miami and Sao Paulo in Brazil, which is being updated for next year's football World Cup.

Miami is spending a further $300 million on new IT infrastructure to help support a $6 billion capital investment programme, with near field communications and self boarding systems set to be tested in the near term as part of that investment.

Asked by as to whether US airport technology investment could be hindered by over zealous US airport security - Miami has been evacuated twice in just over two months as a result of false alarms - Maurice Jenkins, director of information systems and telecoms, said, "I hear what you are saying but everything we do is about enhancing the customer's experience."

Jenkins said self boarding gates at Miami would be tested in parts of the airport where certain airlines repeatedly flew from, and the systems would be benchmarked before further deployments. Such self-boarding systems would have to comply with stringent US airline security regulations, otherwise the airport would face fines, said Jenkins.

Gatwick Airport is currently trialling self-boarding systems using iris scanning technology that allows passengers to get through plane boarding gates.

Now read: SITA loses airport technology lawsuit as delegates gather for key IT summit

Copyright © 2013 IDG Communications, Inc.

Download: EMM vendor comparison chart 2019
Shop Tech Products at Amazon