Global airline industry spends US$11bn on IT each year

10 Sep 2008

The global airline industry is spending 2.2pc of revenues, or US$11bn, on IT investment this year, with self-service, security and on-board communications standing out as important areas, according to the annual Airline IT Trends Survey by SITA.

When considering investment priorities, projects with proven payback or cost savings are the first priority for 62pc of airlines. A close second is ‘improving customer service’.

Regarding self-service, the study found the proportion of passengers using the internet to check-in has caught up with those using airport kiosks: 18pc of passengers arrive at the airport already with a boarding pass, while kiosk usage stands at 17pc.

For the first time the survey measured the trend towards the use of mobile devices – currently 1pc of passengers use them for check-in. Airlines forecast this to climb to 6.5pc of passengers by the end of 2009, with 67pc of airlines offering the service.

Online ticket sales make up 26pc of the total globally. In the mature North American market, they stand at 50-60pc, while Europe’s figure is 36pc.

Since 2001, airlines and their customers have paid more than US$30bn for security measures, the study says. The cost to the industry is going to rise as more countries put stricter border controls in place.

Currently only 16pc of airlines provide no passenger data to governments. By 2009, this is predicted to drop to 3pc. Of airlines providing passenger data, 26pc provide it to six governments or more, with this figure expected to go up to 60pc in 2009.

With more passenger data required, the case for a common collection and distribution process is very strong, according to SITA. The number of airlines outsourcing this has gone up from one third of airlines last year to just under 50pc this year.

The convergence of wireless and internet is shifting passenger expectations. Since 2003, when the SITA survey first looked at SMS, email and internet access on board, results show the market has evolved as quickly as expected. This is partly because of the lack of mature technology and a clear business model.

However, most airlines now expect to have deployed at least one of these services within three years, for example Bmi, Ryanair and Air France.

By Sorcha Corcoran