airline it trends survey 2011 exec summary

8/2/2019 Airline IT Trends Survey 2011 Exec Summary

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The Airline ITTrends Survey

Executive summary

2011A joint Airline Business and SITA survey

The Airline ITTrends Survey


2/122 |The Airline IT Trends Survey| 2011

Foreword

Francesco ViolanteChie Executive Ofcer

SITA

Max Kingsley-JonesEditor

Airline Business

This year marks the 13th Airline IT Trends Survey, co-sponsored by Airline Business and SITA.

Over hal o the respondents to the global benchmarking survey are in the Airline Business

top 100 passenger ranking, providing a strong illustration o IT strategic thinking and trends

across the industry.

The last 12 months has seen passenger trac and airline prots recover to pre-recession

levels, but high uel prices and market uncertainty means concerns remain. Against this

backdrop the survey shows operational IT budgets have grown this year as revenues bounced

back and remained broadly unchanged as a percentage o total revenues.

The survey underlines the potential o mobile services as one o the lead developments, both

as a means o distribution and check-in. Almost nine out o 10 airlines are actively selling or

planning to sell tickets on mobile phones by 2014, while the survey shows ve times more

passengers are expected to use mobile check-in by the same date. Indeed mobile services

top the airline investment priority list, with a 40% increase in the number o airlines planning

major investment in mobile services compared to last year.

Also highlighted in this years survey is strong airline interest in virtualisation and cloud

computing. 93% o airlines have or plan to have virtualisation/technology as a service

implemented by 2014.

The trend data and insights into airline thinking on new technology provides a valuable insight

into airline IT strategy, and this survey is only possible with your continued support. We would

like to thank all those who took the time to participate in this years survey and hope you will

continue to support it in the years to come.

For more inormation on previous airline IT trends and our sister survey on airport IT trends,

together with all our accompanying eatures and analysis, visit the Airline Business IT zone at

fightglobal.com/ITzone.


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Purchase the full analysis atwww.fightglobalshop.com

2011 |The Airline IT Trends Survey| 3

expect IT budgets to

increase or remain

the same by 2012

The survey shows continued, but cautious, optimism about the

business environment in 2011.

Airlines operational IT&T spend has stabilised at 1.8% o

revenue, but on the back o rising revenues, represents an

increase in absolute terms or the second consecutive year.

The outlook or 2012 remains positive, with 54% o airlines

expecting IT&T spend to increase in 2012.

Management & Strategic Issues

83%

Operational IT&T spend as

% o revenueOutlook or 2012

0%

1%

2%

3%

2011201020092008

1.8%

Decrease

The same

Increase

54%

29%

18%

Expected

in 2012



91%of airlines to makeinvestments inpassenger mobile

services

The increasing spending optimism is driving a stronger

investment ocus on Improving customer service and

supporting revenue opportunities. Nevertheless, Reducing

cost o business operations still remains a high priority.

Mobile services top the investment priority list, with a 40%

increase in the number o airlines planning major investments in

the passenger area, compared to last year.* Passenger

processing such as check-in, fight status notications and

electronic boarding passes are the main ocus, while travel

distribution via mobile phones is also on the rise.

Upgrades to airline core passenger management and

customer relationship systems will also receive signicant

investments over the next three years.

*comparing the same respondents in 2010/2011

Priorities in the IT investmentdecision - investment drivers

IT&T investment programmesin the next three years

Industry mandates

and IT compliance

Improving workforce

productivity

Reducing the costs of

business operations

Enabling new marketand revenue

opportunities

Improving

customer service

26%

64%

69%

35%

63%

42%

22%

24%

52%

27%

Priority 4 (Highest) Priority 3

No planR&D/pilotMajor programme

Mobile device based

services for staff

Improve direct customer

relationship system

functionality (CRM)

Upgrade core passenger

management system

Integrating electronicdocuments (e.g. EMD, aircraft

parts, boarding passes)

Mobile device

based services

for passengers

54%

60%

47%

36%

44%

30%

31%

16%

36%

39%

16%

9%

36%

28%

17%


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Airlines are continuing to gain more control o ticket distribution

with the proportion o tickets sold via directly controlled channels

increasing. Airlines are on track to directly control the majority o

ticket sales in the next ew years, i the present progress is

maintained.

Currently, ancillary services are primarily sold through airlines

own distribution channels. This will remain the main channel

enabling expansion o ancillary revenues or some time. However,

airlines expect to increase ancillary service sold via indirect

channels over the coming years.

Travel Distribution

Strategy or travel distribution

0%

50%

100%

Indirect distribution

e.g. GDS, OTA,

interline

Direct distribution

e.g. online,

call centres

201420112009

% of tickets sold

58%of tickets sold

directly by 2014

Ancillary revenue strategy

GDS including OTAAirline direct channels

None of the above

Sell non-air services

(hotel, car, insurance)

Un-bundle by charging

for airline services

(bags, meals etc.)

Upsell using

fare families/

marketing types

23%

71%

56%

29%

50%

46%

12%

25%



of airlines sell or plan

to sell tickets via

social media networks

by 2014

69%Mobile phones are set to become a signicant sales channel

in the uture. Almost nine out o 10 airlines are actively selling,

or planning to sell, tickets on mobile phones by 2014. In

addition, airlines plan to extend mobile distribution services to

include ticket modication/upgrades and sales o onboard

services.

Airlines are also looking to add new sales channels. Kiosks

and social network sites are the latest addition to a growing

channel mix. Early adopters are already integrating social media

sites in the sales process.

Emerging sales channels Sales via mobile phones

0%

20%

40%

60%

80%

100%

Social

networks

KiosksMobiles

33%

19%16%

30%28%

36%

No plans

By the end of 2014

By the end of 2012

Already done

16%

14%

23%

30%

23%

30%

No plans

By the end of 2014

By the end of 2012

Already done

Ticket

modications

Ticket

upgrades

Onboard services

(seat allocation,

meals etc.)

17%

28%

34%

29%

28%

26%

27%

32%

29%

28%

12%

11%


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of passengers

expected to use

mobile phones for

check-in by 2014

15%Airlines continue to reduce agent-led passenger operations in

avour o more sel-service options. Progress is steady, but lags

behind airlines ambitions. Airlines will need to signicantly

increase their eorts i they are to reach their planned levels by

2014.

The number o passengers using kiosks or check-in is

expected to grow. Check-in via Internet, and in particular mobile

phones, are predicted to grow astest. Compared to today, ve

times more passengers are expected to use mobile check-in by

2014.

Passenger Operations

Strategy or kiosks Use o sel-service check-in

26%

51%

37%

5%6% 1%

Increase total number of kiosks

for other usage

Keep total number of check-in

kiosks the same

Increase total number of check-in

kiosks

We have no kiosks and no plan

to implement

Keep total number of kiosks,

but change its usage

Reduce the number of kiosks 0%

25%

50%

Mobile

Kiosk

Internet

201420112008

31%

21%22%

15%

19%

3%

% of passengers



of airlines reach or

plan to reach

passengers via social

networks by 2014

80%Kiosks will remain essential to provide sel-service in the

uture. The number o airlines with check-in kiosk capabilities is

orecasted to rise rom 66% to 85% by 2014. In addition to

check-in, implementations o kiosks or alternative usage is

increasing in priority, with our times more Flight Transer

Kiosks since last year.*

Social networks are emerging as a new channel to reach

passengers, providing opportunities or ticket sales and

customer service. Currently, promoting products and services is

the main area o ocus or airlines.

*comparing the same respondents in 2010/2011

Usage or kiosksPlans or social network

integration

0

20

40

60

80

100

Flight

transfer kiosk

Sales via

kiosk

Kiosk

check-in

16%

19%

66%

5%

28%

11%

No plans

By the end of 2014

By the end of 2012

Already done

23%

49%

23%

30%

14%

14%

23%

24% 27%

No plans

By the end of 2014

By the end of 2012

Already done

Flight information

and operational

updates

Disruption and

emergency

communication

Customer

relationship handling

e.g. complaints

Promote products

& services41%

25%

23%

24%

23%

25%

16%

27%

37%

18%

20%

33%

24%

31%

16%

16%


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Infrastructure

of airlines have or plan

to have Infrastructure

Virtualisation/Service

implemented by 2014

93%Implementation o all virtualisation and cloud services has

increased, with Inrastructure-as-a-Service as the airlines main

area o investment.

Almost nine out o 10 respondents chose Inrastructure

Virtualisation/Service in order to achieve Better agility &

fexibility. Priorities or Sotware-as-a-Service/Sotware

virtualisation dier slightly, with 72% o respondents considering

it or its potential to lower cost.

Level o implementation or

virtualisation and cloud

computing

Top reasons or choosing

virtualisation and cloud

computing

0%

20%

40%

60%

80%

100%

Desktop as a

service/desktop

virtualisation

Software as a

service/

application

virtualisation

Infrastructure as

a service/Server

and storage

virtualisation

8%

16%

11%

19%

14%

15%

55%

15%

40%

18%

21%

26%

By the end of 2014

By the end of 2012

Already done

In evaluation

No plans

6%12%

23%

IAAS (Infrastructure-as-a-Service)

SAAS (Software-as-a-Service)

0% 20% 40% 60% 80% 100%

Better agility

& exibility

Lower cost

Increased

availability &

service levels

61%

61%

72%

61%

50%

89%



The statements below have been selected as they refect issues or projects requentlymentioned by all respondents in this years survey. Please note that these statements are

directly taken rom the survey responses and refect the opinions/wording o our respondents.

Within your airline what do you consider were the major IT successes o the

last 12 months?

l Advanced applications or better managing revenue and load actor

l An improved inrastructure consisting o virtualisation and better security

l Continued business investment in IT solutions and delivery o large transormational

initiativesl Pushing more trac and sales via the website

l Improve ancillaries sales, up selling process, customer relationship management initiative,

fexibility to adjust rules and ares depending on market needs

Within your airline what do you consider were the major IT ailures o the

last 12 months?

l Not proceeding with new technology, virtualisation/cloud computing

l Tackling the challenges and constraints across common-user and international airport

operations

l Lack o innovation and orward drive caused by lack o sta and budget

l Insucient power and capacity o data centres

l Better management o IT vendors supporting IT inrastructure

What do you see as the biggest uture IT challenges acing the airline industry?

l Speed o delivery which matches the pace o the changing airline and technology market

place

l Implementing o cloud services; identity and access management

l Online sales via social networks

l Managing IT suppliers as more services/applications are outsourced

l Supporting ever increasing unbundling and ancillary revenue opportunities

Verbatim Responses


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The survey was rst launched in 1999 and comparisons are made where appropriate withprevious surveys, although the sample may vary between years. Questionnaires were sent to a

senior IT executive in each o the top 200 passenger carriers, including low cost operators,

together with carriers representing important players in the regional and leisure sectors during

spring 2011.

The survey objectives are to monitor key IT trends within the airline industry including:

l Management/Strategic Issues

l Travel Distribution

l Passenger Operations

l Inrastructure

l Successes & Challenges

A comprehensive 100+ page PDF report is available to purchase, this will include commentary &

analysis covering all o the ollowing survey questions:

l Priorities or investment decisions

l Key technology investment trends and areas in the next three years

l Long-term strategy or implementing virtualisation technology

l Strategy or selling products/services via passengers mobile phones

l Strategy or the integration o social networks

l Evolution o sel-service technology (including via passengers mobile phones)

l Plans to implement wireless connectivity on board aircrat

For urther details: www.fightglobalshop.com

Methodology & Further Analysis


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www.sita.aero

www.fightglobal.com/airlines

airline it trends survey 2011 exec summary

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