Investment by airlines in IT is set to drop to 1.7% of revenue this year as carriers struggle to cope with the global economic downturn. This is the lowest level of IT investment since 2002.
The fugures come from the annual Airline IT Trends Survey co-sponsored by SITA and Airline Business. Recognising the state of the market in his introduction to the survey, SITA chairman Paul Coby commented, "If the amount being spent on IT hadn't gone down, I might have doubted the veracity of the document. We should not be surprised that when survival is the issue for many carriers, that all but the most essential of IT investments has been put on the back-burner."
Coby stressed the importance of recognising that IT is also part of the solution to the industry's challenges. "Used well and effectively IT will cut costs and protect revenues. The survey tells us that IT has already accomplished a great deal in reducing distribution costs and expanding self-service functionality."
In a bid to reduce distribution costs, the survey shows that airlines are keen to add more functionality to their websites by the end of 2010, particularly “change/cancel/rebook facilities” online, which 44% of respondents plan to offer, while 37% already do so. Other website functionality planned for 2010 includes: alternative payment options (34%); new products to improve revenue (34%); booking portal for corporate customers (33%); frequent flyer redemption functionality (29%); booking portal for travel agencies (28%); and on-line shopping tools (26%).
In passenger-related technology, while 38% of airline respondents do not provide any mobile services as yet, notifications about flight status and delays continue to be the most popular mobile-based service to passengers among those who do, with 38% providing this service currently while 42% have plans to do so within the next year.
The Airline IT Trends Survey is an independent poll of senior IT personnel working within the top 200 passenger carriers; 116 airlines responded to this year’s survey, including 11% classified as low-cost/low-fare carriers, and 27% were airlines carrying more than 20 million passengers annually.
Bernie Baldwin, editor, Low-Fare & Regional Airlines/LARAnews.net
Cannes, France
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