2019 air transport it insights - sita · strategies on digital transformation, with cloud services...

AIR TRANSPORT

IT INSIGHTS2019

AIRLINE

AIRLINE | IT SPEND

AIRLINE INSIGHTS

AIR TRANSPORT

IT INSIGHTSPages 3-18 Pages 20-34

AIRPORT

2019

© SITA 2019 Air Transport IT Insights

AIRLINE IT TRENDSAirline CIOs share an expectation that IT spend will continue to increase in the medium term, reaching US$40bn in 2018 after several years of virtually flat growth. Top investment priorities include cloud computing, cybersecurity and business intelligence – technologies which airlines see as ‘doing the heavy lifting’ to realize digital transformation.

A key focus of airline technology investments is to deliver an ever-more efficient passenger journey by reducing queues, speeding the transition through airport processes and providing better information to travelers. Passengers are already reaping the benefits. Last year 60% of airline CIOs recorded up to a 20% year-on-year improvement in passenger satisfaction rate, while 45% recorded an improvement in processing speed of up to 20%.

Airlines continue to strive towards a fully self-serviced passenger journey by rolling out automated self-boarding. The introduction of biometric identity at the departure gate and self-boarding over the next few years will bring about the next phase of efficiency.

A similar evolution is underway in the functionality provided by passenger mobile apps. With check-in and mobile boarding apps becoming almost universal, airlines are turning their attention to personalized services as well as artificial intelligence (AI)-driven chatbot services. Increasing numbers are looking to enrich self-service by keeping passengers informed about missing bags, irregular operations and service issues.

The direction of airline IT over the longer term is strongly bound to what AI can deliver. Today’s key applications include virtual agents, chatbots, and predictive analytics, but as AI enters the mainstream, realizing the potential of this emerging technology promises to bring many exciting possibilities.

3© SITA 2019 Air Transport IT Insights

AIRLINE IT TRENDSAIR TRANSPORT IT INSIGHTS

PAGES 12-14

SELF-SERVICEINVESTMENT PLANS

PAGES 7-11 PAGE 16-18

TECHNOLOGIES

PAGE 15

MOBILE

PAGES 5-6

IT SPEND


AIRLINE | IT SPEND

5

AIRLINE | IT SPEND


AIRLINE IT SPEND ROSE SIGNIFICANTLY IN 2018

ANALYSIS

IT and Telecom spend for airlinesAirline IT budgets plateaued in 2016 - 2017at 3.12% total IT spend as a % of revenue. But in 2018, and as predicted by CIOs, we have seen a significant rise. Total airline IT spend has increased substantially in 2018 to 4.84% ofairline revenue.

Airline operating spend has now reached 2.89% of total revenue on IT compared to 1.90% in 2017. This level of spend is predicted to remain largely stable, with 2019 spend expected to be 2.91%.

Capital spend also increased in 2018 to reach 1.95% in 2018 – up from 1.24% in 2017. Airlines are predicting an increase in capital spend in 2019 to rise to 2.31%.

Looking at 2019, predictions are positive as airlines have gradually made more investment on growing business and enabling digital transformation. This increase is heavily influenced by a rise in CIO operating spend among Tier 1 airlines across all regions.

24.8

3.12% 3.14%

1.91% 1.90%

1.21% 1.24%1%

2%

3%

20US$BN

40US$BN

2016 (Actual) 2017 (Actual) 2018 (Actual)

40.8

4.84%

2.89%

1.95%

21.94%

Planned 2019

49.6

5.22%

2.91%

2.31%

5%

Estimated value of IT spendTotal IT spendOperating IT spendCapital IT spend

IT sp

end

as a

% o

f rev

enue

IT sp

end

in U

S$bn


AIRLINE | IT SPEND

2020

Operating spend Capital spend

28%

49%

23%

Expected change in IT spend as % of revenue.

2019

66%

22%

12% 2019

17%

76%

7%2020

25%

55%

20%

Increase

Stay the same

Decrease

Increase

Stay the same

Decrease

2019

17%

76%

7%2018

Operating spend Capital spend

40%

32%

28%

2018

40%

42%

18%

Expected change in IT spend as % of revenue.

2019

66%

22%

12%

6

AIRLINE | IT SPEND


ANALYSIS

Airline IT spend predictionsLooking ahead to 2020, 49% of airlines predict their operating spend will increase, 28% predict it will stay the same, while 23% forecast a decrease.

The majority of airlines (55%) also predict their capital expenditure will increase as we move into 2020, while 25% think it will remain unchanged.

CIOS ARE OPTIMISTIC ABOUT 2020 TRENDS FOR IT SPEND

% of airlines planning major programs / R&D by 2022.

Cybersecurity

Applications for passenger mobile services

Cloud services

Data centers

92%

95%96%

88%

100%

Business intelligence


Cybersecurity

Applications for passenger mobile services

Cloud services

Data centers

92%

95%96%

88%

100%



AIRLINE | INVESTMENT PLANS

TOP INVESTMENT PRIORITIES OF AIRLINES ARE HIGH ON AIRLINE CIO AGENDAS CLOUD, CYBERSECURITY AND BUSINESS INTELLIGENCEANALYSIS

Airline CIO priorities for IT Services by 2022 Airline CIOs are focusing their IT strategies on digital transformation, with cloud services (100%) and cybersecurity initiatives (96%) being the greatest areas for investment by 2020.

Investment in cloud services has increased since 2016 and is clearly the top priority on the CIO agenda across airlines: 83% of airlines have major programs in place for cloud and a further 16% are running a pilot.

Likewise, cybersecurity is a high priority, ranking second on the airline CIO agenda, with 86% having a major cybersecurity program in place and another 10% running a pilot.

BI Solutions (95%) and mobile apps for passenger services (92%) are also receiving significant investment.

% of airlines with cybersecurity investment priorities in 2019.

Achieve regulatory compliance

Threat intelligence

Cloud security

Identity and access management

Establish a security framework and program

Build/Enhance the Security Operations Center (SOC)

79%72%65%

64%61%56%

Employee awareness & training 83%

Telecommunications and network security 65%7%

5%

10%

2017 2018 2019

15%

7.19%

9.64%

% of IT budget spent on cybersecurity.

Cybersecurity spend Cybersecurity investment priorities

AIRLINE | INVESTMENT PRIORITIES FOR AIRLINE OPERATIONS



ANALYSIS

Airline cybersecurity plansThe importance of cybersecurity for airlines continues to grow.

Airlines spent 7% of their IT budget on cybersecurity for two years in a row from 2017 to 2018. This is set to rise to 9.64% in 2019.

Cyber investment priorities are reflective of the challenges airlines face. Top of the list is ‘employee awareness & training’ with 83% of airlines investing in this area in 2019 (same as 2018). This is closely followed by investment in ‘regulatory compliance’ (79%). Those are common spending priorities in 2019.

We see an emerging technology trend with 72% of airlines prioritizing ‘threat intelligence’ investment to help them collect and analyze threat data. This is ranked third, up from 2018.

AIRLINES INCREASE CYBERSECURITY FOCUS IN BUDGET AND INVESTMENT PRIORITIES

AIRLINE | INVESTMENT PRIORITIES

0%

Baggage processing

Passenger processing for retail

Aircraft turnaround

Passenger processing for operations

20% 40% 60% 80% 100%

17%

25%

11%

12%44%

36%39%

50%33%

% of airlines with implemented and planned business intelligence initiatives.

39% 50%

45%

Implemented By end of 2022 No plans ImplementedBy end of 2022No plans

0%

Baggage processing

Passenger processing for retail

Aircraft turnaround

Passenger processing for operations

20% 40% 60% 80% 100%

17%

25%

11%

12%44%

36%39%

50%33%

% of airlines with implemented and planned business intelligence initiatives.

39% 50%

45%

Implemented By end of 2022 No plans



THE LEADING USE OF BUSINESS INTELLIGENCE FOR AIRLINES IS PASSENGER PROCESSING

ANALYSIS

Airlines’ business intelligence plans‘Passenger processing for operations’is currently the leading use of business intelligence with 44% of airlines having implemented an initiative so far. A further 45% plan to invest in this area by 2022.

‘Aircraft turnaround’ is ranked as the second business intelligence investment area this year: 39% of airlines have implemented initiatives relating to aircraft turnaround, and a further 50% have plans by 2022.

AIRLINE | INVESTMENT PRIORITIES

Implemented

By end of 2022

No Plans

Passenger processing at off-airport locations(e.g. hotels/intermodal transport locations)

0%

Customer service staff queue checking withmobile device

Wait time notifications to passenger mobile devices

Wait time information embedded in airline app

Screens displaying real-time wait time information

Wait time monitoring (e.g. via sensors/beacons)

10% 20% 30% 40% 50%

35%8%

28%

31%

32%

32%

47%

% of airlines with passenger flow management solutions.

Mobile electronic capture of requirements pre-boarding 56%

60% 70% 80% 90% 100%

21%23%

33%21%

38% 30%

30%38%

43% 26%

31% 41%

57%


Passenger processing at off-airport locations(e.g. hotels/intermodal transport locations)

0%

Customer service staff queue checking withmobile device

Wait time notifications to passenger mobile devices

Wait time information embedded in airline app

Screens displaying real-time wait time information

Wait time monitoring (e.g. via sensors/beacons)

10% 20% 30% 40% 50%

35%8%

28%

31%

32%

32%

47%

% of airlines with passenger flow management solutions.

Mobile electronic capture of requirements pre-boarding 56%

60% 70% 80% 90% 100%

21%23%

33%21%

38% 30%

30%38%

43% 26%

31% 41%

57%




AIRLINES WANT TO PROVIDE MORE MOBILE SERVICES FOR PASSENGER FLOW MANAGEMENT

ANALYSIS

Passenger flow investment plansInvestment in landside areas of the airport is also on the increase.

Mobile electronic capture of requirements preboarding continues to be the largest investment area. 56% of airlines have now implemented this (up from 50% in 2018). A further 23% plan to invest by the end of 2022.

Passenger processing at off-airport locations has also increased significantly with 47% having implemented this compared to 37% in 2018.

By 2022, 74% of airlines also plan to have wait times embedded in their mobile app. 31% have already done this - up from 17% in 2018.

AIRLINE | INVESTMENT PRIORITIES ON-BOARD

% of airlines with passenger processing performance rate in 2018versus previous year.

% of airlines with KPIs measuring passenger processing performance.

64%Passenger satisfaction rate

Average processing speed(pax per hour)

Business performance(ROI, revenue)

63%

42%

Over 20% increase Up to 20% increase Same Up to 20% decrease

Passenger satisfaction

13%

18%

9%

60%

Average processing speed

26%

21%

8%

45%

Business performance

20%

3%

0%

77%

Passenger processing KPIs Passenger processing performance in 2018

Over 20% increase

Up to 20% increase

Same

Up to 20% decrease% of airlines with passenger processing performance rate in 2018

versus previous year.





63%

42%



13%

18%

9%

60%


26%

21%

8%

45%


20%

3%

0%

77%


% of airlines with passenger processing performance rate in 2018versus previous year.





63%

42%



13%

18%

9%

60%


26%

21%

8%

45%


20%

3%

0%

77%


11

% of airlines with KPIs measuring passenger processing perfomance.

% of airlines with passengerprocessing performance rate in 2018 versus previous year.



ANALYSIS

Passenger flow performanceAirlines measure the performance of their passenger self-service processing using two primary metrics:

• their passenger satisfaction rating, which is used by 64% of airlines.

• an average processing speed measure (i.e. number of passengers per hour) as used by 63% of airlines.

Where airlines are measuring the performance of their self-service passenger processing using their average passenger satisfaction rating, 60% of those airlines confirm an improved passenger satisfaction rate of up to 20% in 2018 compared to previous year.

Of those measuring their average processing speed, 45% saw an increase in performance in 2018 compared to the previous year.

AIRLINES CONFIRM AN IMPROVED PASSENGER SATISFACTION RATE DUE TO PASSENGER FLOW INVESTMENT

AIRLINE | SELF-SERVICE

Assisted

Unassisted

Real-timeinfo for staff

Real-time infofor passengers

Off site

Bag-drop

Baggage tracking

Printing bag-tagsat home

Web check-in

Mobile deviceassistance from staff

Printing bag-tags at airport

2%

Check-in

Bag-tag

Automatic check-in(no passenger self-service)

% of airlines with implemented or planned self-service initiatives.

13%90% 74%

55%28%38%

44%

24%27%37%

34%

59%32%

25%26%

22%55%

16%74%

Self-boarding(assisted)

23%44%

Boarding

2019 2022

Assisted

Unassisted

Real-timeinfo for staff

Real-time infofor passengers

Off site

Bag-drop

Baggage tracking

Printing bag-tagsat home

Web check-in

Mobile deviceassistance from staff

Printing bag-tags at airport

2%

Check-in

Bag-tag

Automatic check-in(no passenger self-service)

% of airlines with implemented or planned self-service initiatives.

13%90% 74%

55%28%38%

44%

24%27%37%

34%

59%32%

25%26%

22%55%

16%74%

Self-boarding(assisted)

23%44%

Boarding

2019 20222019

2022


AIRLINE | PASSENGER SERVICES

MAJORITY OF AIRLINES PROVIDE UNASSISTED BAG-DROP SERVICE TO PASSENGERS

ANALYSIS

Airline self-service investmentWeb check-in and static kiosks are theprimary self-service check-in methods, but the self checkin trend is moving towards automatic check-in. This is implemented by 34% of airlines in 2019 (up from 24% in 2018), and 37% are planning to do so by 2022.

Assisted bag-drop is widely available with 74% of airlines having implemented this in 2019. We see a growing focus area as well towards unassisted bag-drop with 55% having implemented it in 2019, up from 45% in 2018. Off-site bag drop is also offered by 24% of airlines and is expected to rise to 51% by the end of 2022.

In the context of IATA’s Resolution 753, 59% of airlines have implemented real-time bag tracking information for staff in 2019. While only 22% have implemented real-time bag tracking information for passengers, 77% plan to have it implemented by the end of 2022.

AIRLINE | SELF-SERVICE

Below 50% ofroute network

% of airlines with bag tracking capabilities across their network routes.

More than 50% of route network

0%

10%

20%

30%

40%

60%

50%58%

54%

25%

19% 18% 19%

Over 75% ofroute network

6%

14%

48%

No compliancereadiness

17% 15%

7%

2018 2019 2022

Below 50% ofroute network

% of airlines with bag tracking capabilities across their network routes.

More than 50% of route network

0%

10%

20%

30%

40%

60%

50%58%

54%

25%

19% 18% 19%

Over 75% ofroute network

6%

14%

48%

No compliancereadiness

17% 15%

7%

2018 2019 20222018

2019

2022



ANALYSIS

Bag tracking solutionsOver the past year, a growing number of airlines have introduced baggage tracking at key points in the journey – check-in, loading onto the aircraft, transfers and arrival – in response to IATA’s Resolution 753 that bags should be tracked from start to finish.

Airlines’ momentum around baggage tracking shows little improvement since 2018 with just 14% of airlines able to track baggage across more than 75% of their route network (up from 6%).

The vast majority of airlines in 2019 have capabilities to track bags below 50% of their route network.

Airlines are optimistic though for 2022, with 48% of airlines planning to have bag tracking capabilities over 75% of their network routes.

AIRLINES STILL WANT TO SCALE UP THEIR BAG TRACKING CAPABILITIES

AIRLINE | MOBILE

% of airlines with an implemented or planned passenger ID management solution.

63%77%

22%Staff checking &

scanning ID documentation

12%5%

56%Self-boarding gates using

biometric & ID documentation

7%5%

33%Self-boarding gates

using biometric only

ROME

08.3023D

520192022

2018

% of airlines with an implemented or planned passenger ID management solution.

63%77%

22%Staff checking &

scanning ID documentation

12%5%

56%Self-boarding gates using

biometric & ID documentation

7%5%

33%Self-boarding gates

using biometric only

ROME

08.3023D

520192022

20182018

2019

2022



ANALYSIS

Passenger identity management In 2019, 63% of airlines have staff checking and scanning ID documentation during aircraft boarding (down from 77% in 2018).

Airlines are looking to invest further in selfboarding automation:

• Self-boarding gates using biometric & ID documentation are also beginning to be embraced, with 12% having implemented this already (up from 5% in 2018) and a further 56% planning to do so by the end of 2022.

• Self-boarding gates using only biometric data are less common, with just 7% of airlines having implemented them and only a further 33% planning to implement them by the end of 2022.

AIRLINES PLAN MORE INVESTMENT FOR SELF-BOARDING AUTOMATION

AIRLINE | MOBILE

83%

28%30%

33%27%

25%13%

NotificationsSend baggage location status

updates

Baggage locationstatus

Location-basednotifications

16%16%

7%8%

E-commerceSell Newspaper/

Magazines

Sell Movies/TV

Promotion ofairline offers

Flight discovery

BARCELONA

10.10

00123

% of airlines with implemented passenger mobile services.

8%

8%

81%

67%

90%83%

71%

38%36%

Real-time flightupdates via

social media

81%90%

Notification aboutflight status

7%

2%

7%

31%

68%

39%

37%27%

40%39%

Customer ServiceAI driven

chatbot services

Missing baggagecommunication

Self-service forirregular operations

Customerrelationship

e.g. issues resolution

14%

11%

43%

13%

49%54%

32%

Boarding 84%78%

Airport process

Check-In

Check-in 87%

91%

70%

73%

2019 2018 2017

83%

28%30%

33%27%

25%13%


updates



16%16%

7%8%


Magazines

Sell Movies/TV


Flight discovery

BARCELONA

10.10

00123


8%

8%

81%

67%

90%83%

71%

38%36%


social media

81%90%


7%

2%

7%

31%

68%

39%

37%27%

40%39%


chatbot services





14%

11%

43%

13%

49%54%

32%

Boarding 84%78%

Airport process

Check-In

Check-in 87%

91%

70%

73%

2019 2018 2017

83%

28%30%

33%27%

25%13%


updates



16%16%

7%8%


Magazines

Sell Movies/TV


Flight discovery

BARCELONA

10.10

00123


8%

8%

81%

67%

90%83%

71%

38%36%


social media

81%90%


7%

2%

7%

31%

68%

39%

37%27%

40%39%


chatbot services





14%

11%

43%

13%

49%54%

32%

Boarding 84%78%

Airport process

Check-In

Check-in 87%

91%

70%

73%

2019 2018 2017

83%

28%30%

33%27%

25%13%


updates



16%16%

7%8%


Magazines

Sell Movies/TV


Flight discovery

BARCELONA

10.10

00123


8%

8%

81%

67%

90%83%

71%

38%36%


social media

81%90%


7%

2%

7%

31%

68%

39%

37%27%

40%39%


chatbot services





14%

11%

43%

13%

49%54%

32%

Boarding 84%78%

Airport process

Check-In

Check-in 87%

91%

70%

73%

2019 2018 2017

2017

20192018

83%

28%30%

33%27%

25%13%


updates



16%16%

7%8%


Magazines

Sell Movies/TV


Flight discovery

BARCELONA

10.10

00123


8%

8%

81%

67%

90%83%

71%

38%36%


social media

81%90%


7%

2%

7%

31%

68%

39%

37%27%

40%39%


chatbot services





14%

11%

43%

13%

49%54%

32%

Boarding 84%78%

Airport process

Check-In

Check-in 87%

91%

70%

73%

2019 2018 2017


AIRLINE | MOBILE

INFORMATION SERVICES – THE NEXT WAVE OF AIRLINE MOBILE APP ENHANCEMENT

ANALYSIS

Passenger mobile services Many mobile app services are becoming universal when it comes to mobile check-in and mobile boarding services. These are provided by more than 8 out of 10 airlines in 2019.

Airlines have also implemented mobile app services to promote flight discovery (83%) and airline offers (81%).

The next wave of mobile app services implemented by airlines aim to provide more personalized services.

In 2019, the majority of airlines (54%) provide customer service issues to mobile apps and are looking to enrich customer services on mobile apps related to irregular ops (43%) and chatbots services (37%).

More airlines are also adding notification services to enhance the value of their mobile app:

• A quarter of airlines provide location-based notifications (up from 13% in 2018).

• 33% of airlines have implemented baggage location status updates in 2019.

AIRLINE | INVESTMENT PRIORITIES FOR TECHNOLOGIES

Artificial intelligence Blockchain Robots/Autonomous machines

Wearable technology for staff


45%

44%

13%

36%

Mixed reality

7%

48%

57%

15% 14%

40%

Major Program

R&D

Major Program

R&D

Artificial intelligence Blockchain Robots/Autonomous machines

Wearable technology for staff


45%

44%

13%

36%

Mixed reality

7%

48%

57%

15% 14%

40%

Major Program

R&D


AIRLINE | TECHNOLOGIES

ANALYSIS

Airline CIO priorities for technologiesArtificial intelligence (AI) continues to bea focal point for airline investment. AI has become the most common technology that airlines are currently investing in: 44% have a major program (up from 32%) and a further 45% are running a pilot.

Blockchain is also on the rise with 72% of airlines investing (compared to 69% in 2018), 15% in a major program and 57% in a pilot.

Investment in other emerging technologies is less common. The majority of airlines have a major program and R&D in mixed reality (7% major, 48% pilot), autonomous machines (14% major, 40% pilot) and in wearable tech for staff (13% major, 36% pilot).

AIRLINES INVESTMENT IN EMERGING TECH: AI AND BLOCKCHAIN TO BE A FOCAL POINT

AIRLINE | INNOVATION

% of airlines with AI use cases currently implemented or planned by 2022.

SPECIALOFFER

44%

Automatic scheduling (e.g. of repairs/maintenance)

89%

Virtual agents and chatbots

51%

Pattern recognitionPredictive analytics

75%64%

Targeted advertising/personalization

47%

Brand perception improvement (e.g. social

media/customer feedback analysis)

HI TIM

% of airlines with AI use cases currently implemented or planned by 2022.

SPECIALOFFER

44%


89%


51%

Pattern recognitionPredictive analytics

75%64%


47%



HI TIM



ANALYSIS

Use of AI for airlines ‘Virtual agents and chatbots’ are the mostcommon use of AI at present with 89% of airlines currently using or planning to use the technology in this way.

‘Predictive analysis’ is the second use case of AI for 75% of airlines (up from 66% in 2018), while ‘targeted/personalized advertising’ is being used by 64% of airlines (similar to 2018).

Applying AI for ‘automatic scheduling’ use is also on the increase, with 44% of airlines using or planning to use it by 2022 (up from 37% in 2018).

AIRLINES ARE LOOKING AT THE POTENTIAL OF USING AI FOR VIRTUAL AGENTS AND CHATBOTS

Data privacy & security

0%

Business KPI

Storage capabilities

Workforce skills

Service level agreement

Long term strategy

20% 40% 60% 80% 100%

7%

3%

81%19%

60%37%

56%37%

52%48%

50%50%

49%51%

% of airlines ranking capabilities for ‘Data Lake’ strategy in 2019.

Architecture 41%59%

% of airlines with ‘Data Lake’ strategy plans in 2019.

31%

38%

30%

Currently being developed

Implemented

No plans

Implemented

By end of 2022

No plans

‘Data Lake’ strategy plans Capabilities for ‘Data Lake’ strategy

AIRLINE | INNOVATION

ImplementedBy end of 2022


0%

Business KPI


Workforce skills


Long term strategy

20% 40% 60% 80% 100%

7%

3%

81%19%

60%37%

56%37%

52%48%

50%50%

49%51%


Architecture 41%59%


31%

38%

30%


Implemented

No plans

Implemented

By end of 2022

No plans



0%

Business KPI


Workforce skills


Long term strategy

20% 40% 60% 80% 100%

7%

3%

81%19%

60%37%

56%37%

52%48%

50%50%

49%51%


Architecture 41%59%


31%

38%

30%


Implemented

No plans

Implemented

By end of 2022

No plans


No plans

Currently being developedImplementedNo plans



AIRLINES ESTABLISH DATA LAKE STRATEGY TO PERFORM ARTIFICIAL INTELLIGENCE

ANALYSIS

AI practices for airlines Overall 69% of airlines have a Data Lakestrategy implemented or currently being developed. Airlines have implemented several capabilities to support it:

• The architecture is the first capability in place for 59% of airlines in 2019.

• Data privacy and security is also an important capability implemented by 51% of airlines.

• Business KPI is the third capability being put into place by the majority of airlines.

All airlines expect to have those three main capabilities in place by 2022.

AIRPORT IT TRENDSIn 2018, airport IT spend reached a new high, with most airports forecasting further increases. The investment priorities of airport CIOs include cybersecurity, cloud services and business intelligence (BI) –technologies which are key enablers of the continued airport digital transformation.

A major trend is the growth of investment in automating the passenger journey, to provide a faster, more pleasant airport experience. Facing the challenge of ever increasing passenger numbers, the vast majority of airports are leveraging BI to improve passenger processing.

Investment in passenger flow management has already delivered increased satisfaction among passengers. As many as 68% of airport CIOs reported a year-on-year improvement of up to 20% in passenger satisfaction levels, while 44% saw an increase in average processing times.

Airports are now turning their attention to further reducing passenger frustration by providing personalized communications over mobile devices, including wait-time alerts as part of a flow management solution.

The trend over the past three years has seen airport mobile apps providing the core services of flight status notices, customer relationship management and airport status information. Looking ahead, the emerging trends will result in more personalized information for passengers, including real-time bag tracking information and artificial intelligence (AI)-driven chatbot services.

High on the agenda is biometric identity management, enabling airports to better utilize existing resources to handle greater passenger flows. This emerging technology is set to gain greater traction with airports of all sizes. Most airports plan to invest in initiatives

to process passengers without them having to present documents at every step of the journey. The next few years will see biometrics move out of small scale experimentation and into the mainstream.

What is clear is that airport and airlineIT spend, technology investment priorities, and process solutions are becoming increasingly similar. As these synergies become more profound, there is potential for collaboration between the two key stakeholders to result in an even more seamless journey for the passenger, along with enhanced operations and business results for all.

19© SITA 2019 Air Transport IT Trends Insights


AIRPORT IT TRENDSAIR TRANSPORT IT INSIGHTS

PAGES 28-30

SELF-SERVICEINVESTMENT PLANS

PAGES 23-27 PAGES 32-34PAGE 31

MOBILE

PAGES 21-22

IT SPEND TECHNOLOGIES

AIRPORT | IT SPEND

21

10

4.39%

6.06%

3.19%

2.44% 2.87%

2016 (Actual) 2017 (Actual) 2018 (Actual)

8.6

7

1%

2%

3%

4%

6US$BN

2.70%

5.14%

2.45%

1.94%

6%

5%

8US$BN

10US$BN

7%

IT sp

end

in U

S$bn

IT sp

end

as a

% o

f rev

enue

2019 (Planned)

6.26%

3.18%

3.08%

11.8



AIRPORT | IT SPEND


AIRPORT IT SPEND CONTINUES TO INCREASE, REACHING A NEW HIGH

ANALYSIS

IT and Telecom spend for airportsIT&T spend as a percentage of revenuecontinues to increase, reaching a new high of 6.06% in 2018 and expected to go up slightly to 6.26%, in 2019.

Last year airports estimated that their 2018 spend would be 5.69% so it is a positive sign to see that the actual growth was higher. 2019’s operating spend is predicted to remain static, whereas capital spend is expected to jump to 3.08%.

The results reveal a total airport IT spend of approximately US$10 billion in absolute spend in 2018.

Investment priorities and programs have broadly remained similar to 2018, with ‘running the business’ continuing to account for just under two thirds of spend.

6%

71%

23%

5%

31%

64%

7%

79%

14% 2018 (Actual) 2019 (Planned) 2020 (Expected)

Expected change in IT spend versus previous year.

Increase

Stay the same

DecreaseIncrease

Stay the same

Decrease

24%

73%

3%

68%

11%

Expected change in IT spend versus previous year.

21%

64%

6%

30%

2017 (Actual) 2018 (Planned) 2019 (Expected)

22

AIRPORT | IT SPEND


ANALYSIS

Airport IT spend predictionsAbsolute IT&T spend for most airportshas also continued to increase. 64% of airports say that absolute IT&T spend has increased in 2018 and only 5% say it has decreased.

Most airports predict continued growth over the next two years with 79% planning for an increase in 2019 compared to 2018 and 71% expecting an increase in 2020 compared to 2019.

AIRPORT SPEND PREDICTIONS ARE POSITIVE

% of airports planning major programs / R&D by 2022.

Cybersecurity

Common use infrastructure

Cloud services

Self-service processes

86% 85%

95%


87%88%

AIRPORT | INVESTMENT PRIORITIES


Cybersecurity

Common use infrastructure

Cloud services

Self-service processes

86% 85%

95%


87%88%


THE TOP AIRPORT INVESTMENT PRIORITIES ARE CYBERSECURITY, CLOUD AND BUSINESS INTELLIGENCES

AIRPORT | INVESTMENT PLANS

ANALYSIS

Airport CIO priorities for IT ServicesAirport priorities for IT investment by2022 are:

• Cybersecurity initiatives, with 95% having plans: 84% of airports have major programs inplace for cybersecurity and a further 11% are running a pilot.

• Cloud services (88%).

• Business intelligence (87%).

These areas of investment are greatly enabling airports’ digital transformation.

Facilitating passenger services remains a high priority for airports as well. Airports have major programs and R&D plans for common use infrastructure by 2022 (86%) and self-service processes (85%).

% of airports with cybersecurity investment priorities in 2019.

Achieve regulatory compliance

Identity and access management

Telecommunications and network security

Threat intelligence

Establish a security framework and program

Cloud security

64%

59%

72%69%

64%

49%

Employee awareness & training 79%

Build/Enhance the SecurityOperations Center (SOC) 45%

10%

5%

10%

2017 2018 2019

15%

8%

12%

% of IT budget spent on cybersecurity.

Cybersecurity spend Cybersecurity investment priorities


ANALYSIS

Airport plans for cybersecurityAirport spend on cybersecurity as apercentage of IT budgets has dropped very slightly in 2018 – from 10% to 8%. However it is forecast to grow to 12% in 2019.

CIO initiatives for cybersecurity have increased over the past few years due to industry focus, shared best practices, education, and a benchmarking tool provided by Airport Council International (ACI).

Investing in ‘employee awareness and training’ is a key component when it comes to improving cybersecurity in 2019 – with 79% of airports stating it as an investment priority.

New focus areas for cybersecurity investment priorities in 2019 are ‘telecommunications and network security’ (72%) and ‘threat intelligence’ (69%) ranked respectively second and third.

AIRPORT CYBERSECURITY INITIATIVES HAVE INCREASED OVER THE PAST FEW YEARS


0%

Baggage processing

Asset management (check-in, parking stand, gates...)

A-CDM - Total Air Management

Aircraft turnaround

20% 40% 60% 80% 100%

22%

24%

30%

30%19%

42%34%

43%35%

% of airports with implemented and planned business intelligence initiatives.

32% 39%

50%


Passenger processing andflow management

Flight operations(flight, arrival, prediction)

17%

20%44%

44%39%

36%


ImplementedBy end of 2022No Plans

0%

Baggage processing

Asset management (check-in, parking stand, gates...)

A-CDM - Total Air Management

Aircraft turnaround

20% 40% 60% 80% 100%

22%

24%

30%

30%19%

42%34%

43%35%

% of airports with implemented and planned business intelligence initiatives.

32% 39%

50%


Passenger processing andflow management

Flight operations(flight, arrival, prediction)

17%

20%44%

44%39%

36%


ANALYSIS

Business Intelligence plansWhen it comes to business intelligence andanalytics initiatives, the area where most airports have implemented or have plans to implement is ‘passenger processing and flow management’ at 83%.

This is followed by ‘flight operations’ (80%) and ‘baggage processing’ (78%).

Business intelligence initiatives focus mainly on improving airport operations including the majority of airports (50%) having business intelligence investment plans for aircraft turnaround by 2022.


THE LEADING USE OF BUSINESS INTELLIGENCE FOR AIRPORTS IS PASSENGER PROCESSING

% of airports with solutions to reduce passenger wait-time in airport landside by 2022.

Wait-time monitoring(e.g. via sensors/beacons)

Screens displayingreal-time wait-time

information

Wait-timenotifications to

passenger mobiledevices

Mobile electronic capture of

requirements pre-boarding

Wait-timeinformation embedded

in airport app

Passengerprocessing at

off airport locations

HOTEL

01.05

By 2022 46% 36%54% 34%31%

37%2018 17% 10% 11%17%42%

2019 50% 37% 20% 21% 12% 12%

37%

AIRPORT | INVESTMENT PRIORITIESFOR ID MANAGEMENT

% of airports with solutions to reduce passenger wait-time in airport landside by 2022.

Wait-time monitoring(e.g. via sensors/beacons)

Screens displayingreal-time wait-time

information

Wait-timenotifications to

passenger mobiledevices

Mobile electronic capture of

requirements pre-boarding

Wait-timeinformation embedded

in airport app

Passengerprocessing at

off airport locations

HOTEL

01.05

By 2022 46% 36%54% 34%31%

37%2018 17% 10% 11%17%42%

2019 50% 37% 20% 21% 12% 12%

37%


ANALYSIS

Passenger flow investment plans‘Wait-time monitoring’ is the one areathat has seen a significant increase in implementation over the last year in order to reduce the amount of time passengers spend waiting at the airport.

The implementation of ‘wait-time monitoring’ has jumped from 31% of airports in 2017 to 42% in 2018. In 2019, the vast majority of airports have ‘wait-time monitoring’ solutions and only 19% have no plans to introduce this measure.

54% of airports are also looking at providing wait-time notifications to passengers’ mobile devices by 2022.

THE MAJORITY OF AIRPORTS NOW HAVE ‘WAIT-TIME MONITORING SOLUTIONS’ FOR PASSENGER FLOW MANAGEMENT



Over 20% increase

Up to 20% increase

Same

% of airports with passenger processing performance rate in 2018versus previous year.

% of airports with KPIs measuring passenger processing performance.




68%

40%



14%

63%

12%

11%

26%

44%

16%

14%

19%

68%

9%

4%

Average processing speed Business perfomance


Up to 20% decrease






68%

40%



14%

63%

12%

11%

26%

44%

16%

14%

19%

68%

9%

4%








68%

40%



14%

63%

12%

11%

26%

44%

16%

14%

19%

68%

9%

4%





ANALYSIS

Passenger flow performanceThe most common KPI used tomeasure the performance of passenger flow management is ‘passenger satisfaction’ according to 73% of the airport respondents. This is followed by ‘average processing speed’ (68%); 40% of airports use ‘business performance’ as the KPI for passenger flow management.

Airports confirm positive performance results from their passenger flow monitoring investment in 2018:

• 74% confirmed a passenger satisfaction increase in 2018 and up to a 20% performance increase (for 63% of airports).

• 44% of airports measuring ‘average processing speed’ said the performance had increased up to 20% and 14% confirmed a performance increase greater than 20%.

AIRPORTS CONFIRM AN IMPROVED PASSENGER SATISFACTION RATE DUE TO PASSENGER FLOW INVESTMENT

% of airports with implemented self-service initiatives.

Check-in via kiosk 91%

Bag-drop (assisted)

Bag-tag at kiosk

Biometric boarding gates

85% 88% 81%

51% 55% 56% 51%

61% 59% 63% 59%

28% 26% 36% 36%

0% 5% 10% 9%

Self-boarding gates 19% 21% 26% 31%

Bag-drop (unassisted)

2016 2017 2018 2019

2018 2021

% of airports implemented self-service initiatives.

Transfer

Check-in

7%88%

Flight transfervia kiosk 30%

21%

Check-in via kiosk Bag-tag printing at kioskBag-tag

24%63%

56%28%

21%30%

Bag-drop (off-site)

Bag-drop

Bag-drop (assisted)

Sales transactions at akiosk (e.g. ground

transport, lounge access)

19%34%

Sales

26%45%

Self-boarding (assisted)

Boarding

Biometric boardinggates (unassisted)

Self-service lost bagregistration (bag recovery)

Baggage tracking

36%10%

BAGSTATUS

Info services at a kiosk(e.g. flight status, gate info, etc.)

Information

29%43%

INFO

36%42%

Bag-drop (unassisted)

10%58%


AIRPORT INVESTMENT IN UNASSISTED BAG-DROP IS ON THE RISE

ANALYSIS

Airport self-service investmentAirport self-service investment hasevolved since 2015. Check-in via kiosk has remained stable and is implemented by 81% of airports in 2019.

While the implementation of assisted bag-drop has plateaued over the past three years, the implementation of unassisted bagdrop has doubled to 36% of airports, up from 18% in 2015. The trend towards unassisted is expected to accelerate over the next three years, with 75% of airports globally implementing unassisted bag-drop by 2022.

The next wave of self-service initiatives relates to passenger boarding automation:

• One area of high implementation is ‘automated boarding gates’ with nearly a third of airports already having these in place (31%) and another 40% planning to implement them by the end of 2022.

• Self-boarding gates using biometrics are yet to take off with many trials. Currently only 9% of airports have implemented them, but 44% expect to do so by 2022.

AIRPORT | PASSENGER SERVICES

39%

32% 26%

50%33%

34%

Make-up area Transfer Aircraft loading

33%

28%

Arrival

24%

33%

29%

39%

% of airports with implemented or planned bag tracking touch-points by 2022.

2019

By end of 2022

No plans

By end of 2022

2019

No plans

39%

32% 26%

50%33%

34%

Make-up area Transfer Aircraft loading

33%

28%

Arrival

24%

33%

29%

39%

% of airports with implemented or planned bag tracking touch-points by 2022.

2019

By end of 2022

No plans


ANALYSIS

Bag tracking solutionsThere have been no major changes inthe airports’ ability to track baggage across the four main areas: make-up, aircraft loading, transfer and arrivals. Aircraft loading has increased from 37% to 39% implementation – but this is a minor uplift.

Variations based on airport revenue rankings indicate that three quarters of the Top 50 airports have implemented tracking points at make-up and aircraft loading areas, and almost half have tracking capabilities for the transfer and arrival areas.

However, the Top 100+ airports have much lower bag tracking readiness.

AIRPORTS ARE UPPING THEIR INVESTMENT IN BAG TRACKING


AIRPORT | MOBILE

% of airports with implemented or planned ID management solutions by 2022.

58%59%

Enrolment atthe airport

74%88%Self check-in

70%85%Self bag-drop

75%68%Airport security

67%64%Self boarding

gates atdeparture

48%36%

Automatedself-service

transfer gates

59%61%

Self-boarding gatesusing biometric and

travel documents

52%61%

Self-boarding gatesusing biometric only

48%47%Secure single

biometric token forall touch-points

55%58%Automated arrival

border gates

By end of 2021 By end of 2022

PASSPORT

PASSPORTROME

08.3023D

By end of 2022By end of 2021

% of airports with implemented or planned ID management solutions by 2022.

58%59%

Enrolment atthe airport

74%88%Self check-in

70%85%Self bag-drop

75%68%Airport security

67%64%Self boarding

gates atdeparture

48%36%

Automatedself-service

transfer gates

59%61%

Self-boarding gatesusing biometric and

travel documents

52%61%

Self-boarding gatesusing biometric only

48%47%Secure single

biometric token forall touch-points

55%58%Automated arrival

border gates

By end of 2021 By end of 2022

PASSPORT

PASSPORTROME

08.3023D


ANALYSIS

More investment for ID managementAirports are looking at implementingidentity management solutions to facilitate secure passenger journey flow.

The most common is ‘self-check in’ with 88% implementation now and by the end of 2022. The implementation is mature in other airport areas such as self bag-drop (85%) and airport security (75%).

Airports are looking at implementing identity management solutions at self-boarding gates by 2022 with 61% of airports having plans for self-boarding gates using biometrics – with ID documentation.

59% of airports are also planning identity management solutions to access lounges by 2022 which may improve customer loyalty.


AIRPORTS PLAN MORE SELF-BOARDING GATES TO TACKLE ID MANAGEMENT

% of airports with implemented passenger mobile services.

E-commerce

39%34%Cashless

payment32%

39%40%Retail

promotions32%

44%42%Purchase of

airport services35%

Customer Service

11%15%AI driven

chatbot services9%

25%19%Access to lounge,

transit, or othersecure areas 24%

25%30%Personalized

information servicefor passengers 16%

43%43%Passenger surveys

and focus groups40%

52%51%Customer

relationshipmanagement 33%

2019 2018 2017

Notifications

41%45%Navigation/wayfinding

within the aiport37%

40%46%Notifications about

airport status28%


flight status54%

BARCELONA

10.10

00123

2019

2018

% of airports with implemented passenger mobile services.

E-commerce

39%34%Cashless

payment32%

39%40%Retail

promotions32%

44%42%Purchase of

airport services35%

Customer Service

11%15%AI driven

chatbot services9%

25%19%Access to lounge,

transit, or othersecure areas 24%

25%30%Personalized

information servicefor passengers 16%

43%43%Passenger surveys

and focus groups40%

52%51%Customer

relationshipmanagement 33%

2019 2018 2017

Notifications

41%45%Navigation/wayfinding

within the aiport37%


airport status28%


flight status54%

BARCELONA

10.10

00123

2017


AIRPORT | MOBILE

AIRPORT MOBILE SERVICES SEE RISE IN PERSONALIZED SERVICES FOR PASSENGERS

ANALYSIS

Passenger mobile servicesThe provision of services via passengers’mobile devices is key for the digital transformation of airports.

Over the last three years the trend confirms the following two main services have been included in airport mobile apps:

• 64% of airports provide notifications about flight status.

• The majority of airports provide customer relationship management to raise compliments or complaints.

• The next most common feature among airports for their passenger mobile services are notifications about airport status and location-based services.

The survey does not indicate that e-commerce services provided to passengers via mobile apps is a high priority, despite the importance of non-aeronautical revenue for airports.

56% 33% 44%

41%

30%

47%

29%

38%

22%

37%

Business intelligence Biometric IDmanagement

Interactive navigation Artificial intelligence Digital tags


Major Program

R&D

R&D

Major Program

56% 33% 44%

41%

30%

47%

29%

38%

22%

37%

Business intelligence Biometric IDmanagement

Interactive navigation Artificial intelligence Digital tags


Major Program

R&D


ANALYSIS

Airport CIO priorities for technologies Airports have strong investment plansfor emerging technology, with ‘business intelligence’ being the most important: 89% of airports have investments planned in this area by 2022 and a majority have major programs in place.

There are also big increases across airports of all sizes for biometric, interactive navigation and artificial intelligence technologies:

• 85% of airports are investing in ‘biometric identity management’ solutions with significant growth in the deployment of major programs – rising to 44% from 25% in 2018.

• 77% of airports will have ‘interactive navigation’ investment plans by 2022, the same as the previous year.

• ‘Artificial intelligence’ investment is an important area of focus with the deployment of major programs reaching 29% up from 9% in 2018.

AIRPORT INVESTMENT IN EMERGING TECH: BI AND BIOMETRIC ARE ON THE RISE

AIRPORT | TECHNOLOGIES

% of airports with AI use cases currently implemented or planned by 2022.

48%


73%


27%

Predictive analytics

61%

38%


47%



HI TIM

Pattern recognition

AIRPORT | INNOVATION

% of airports with AI use cases currently implemented or planned by 2022.

48%


73%


27%

Predictive analytics

61%

38%


47%



HI TIM

Pattern recognition


ANALYSIS

Use of AI for airportsThere has been further investment inArtificial Intelligence (AI) initiatives over the past year with the main objective of ‘improving the passenger experience’.

The primary areas where it is or will be applied are ‘predictive analytics’, (73%), and ‘virtual agents and chatbots’, (61%). In 2019 we see that almost half of airports (48%) are also looking at applying AI for ‘automatic scheduling’ (e.g. of repairs/maintenance).

AIRPORTS ARE LOOKING AT THE POTENTIAL OF USING AI FOR PREDICTIVE ANALYSIS



0%

Business KPI


Workforce skills


Long term strategy

20% 40% 60% 80% 100%

14%

70%22%

60%26%

63%32%

49%44%

48%45%

41%50%

% of airports ranking capabilities for ‘Data Lake’ strategy in 2019.

Architecture

39%54%

% of airports with ‘Data Lake’ strategy plans in 2019.

41%

43%

16% 7%

7%

7%

5%

9%

8%

No plans Implemented Currently being developedImplemented By end of 2022 No plans


AIRPORT | INNOVATION

No plansBy end of 2022Implemented

No plansImplementedCurrently being developed


ANALYSIS

AI practices for airportsOverall 59% of airports have aData Lake strategy implemented or currently being developed.

Among those that do have a strategy, the main capabilities currently implemented are - ‘storage’ at 54%, ‘business KPI’ at 50% and ‘data privacy & security’ at 45%.

AIRPORTS ESTABLISH DATA LAKE STRATEGY TO PERFORM ARTIFICIAL INTELLIGENCE


METHODOLOGY

SURVEYSITA’s Airline IT Trends Survey is well established as the global benchmarking survey for the airline industry.

The survey was first produced in 1999, andwas designed to offer all air transport industry stakeholders the latest facts, figures and trends related to technology adoption and spending. Comparisons to previous surveys are made where appropriate, although the respondent sample may vary between years.

During Q2 this year, questionnaires were sent to senior IT executives in each of the top 200 passenger carriers, including low cost operators, together with carriers representing important players in the regional and leisure sectors.

The survey represents the views and insights of carriers representing 30% of global passenger traffic, providing a clear insight into IT strategic thinking and developments for the industry.

WEIGHTINGA weighting system is applied, based on annual passenger traffic statistics, to ensure that the results are a representative sample in relation to global passenger traffic and to compensate for annual fluctuations in the respondent group. This year, we have implemented a slightly altered version of the weighting for the non-IT-spend elements of the survey which better accounts for airline size.

Direct comparisons from previous years’ data should therefore be treated with caution, although we have included references to re-weighted 2017 data in this report, which is comparable. Questions regarding IT spend remain weighted in the same way as previous years and therefore can be compared directly.

RESEARCHIndependent market research agency Savanta was commissioned to undertake the research on behalf of SITA. The research was conducted in strict confidentiality and the results are presented in an aggregated form. All source data remains confidential and the results of individual returns are not disclosed to the research stakeholders.

SURVEYThe 16th annual Airport IT Trends Survey continues to be the most extensive study of IT trends within the global airport industry. The study took place during May and June of 2019 and focused on senior IT executives at the world’s airports.

This year’s survey results came from 101 respondents who collectively represent the views of 264 airports. The airports participating in this year’s research represent 36% of global traffic (source: 2018 Airports Council International passenger traffic data) or 3.26 billion passengers.

WEIGHTINGA weighting system is applied, based on ACI annual passenger traffic statistics, to ensure that the results are a representative sample in relation to global passenger traffic and to compensate for annual fluctuations in the respondent group. This year, we have implemented a slightly altered version of the weighting for the survey which better accounts for airport size. Direct comparisons with previous years’ data should therefore be treated with caution, although we have included references to re-weighted 2016 and 2017 data in this report, which are comparable.

RESEARCHIndependent market research agency Savanta was commissioned to undertake the research on behalf of ACI and SITA. The research was conducted in strict confidentiality and the results are presented in an aggregated form. All source data remains confidential and the results of individual returns are not disclosed to the research stakeholders.


AIRLINE | IT SPENDIT spend Investment priorities Self-service Mobile Technologies

TITLE

AIRLINE INSIGHTS VIEW AIRPORT INSIGHTS

ANALYSIS

xxxx

All trademarks acknowledged. Specifications subject to change without prior notice. This literature provides outline information only and (unless specifically agreed to the contrary by SITA in writing) is not part of any order or contract.

SITA AT A GLANCE

Easy air travel every step of the way.

• Through information and communications technology, we help to make the end-to-end journey easier for passengers – from pre-travel, check-in and baggage processing, to boarding, border control and in-flight connectivity.

• We work with about 400 air transport industry members and 2,800 customers in over 200 countries and territories. Almost every airline and airport in the world does business with SITA.

• Our customers include airlines, airports, GDSs and governments.

• Created and owned 100% by the industry, SITA is the community’s dedicated partner for IT and communications, uniquely able to respond to community needs and issues.

• We innovate and develop collaboratively with our air transport customers, industry bodies and partners. Our portfolio and strategic direction are driven by the community, through the SITA Board and Council, comprising air transport industry members the world over.

• We provide services over the world’s most extensive communications network. It’s the vital asset that keeps the global air transport industry connected.

• With a customer service team of over 2,000 people around the world, we invest significantly in achieving best-inclass customer service, providing 24/7 integrated local and global support for our services.

• Our annual Air Transport and Passenger IT Insights for airlines, airports and passengers are industry-renowned, as is our Baggage IT Insights.

• In 2018, we had consolidated revenues of US$1.7 billion.

For further information, please visit www.sita.aero

For further information, please contact SITA by telephone or e-mail:

Americas+1 770 850 [email protected]

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2019 air transport it insights - sita · strategies on digital transformation, with cloud services...

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