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The Airline ITTrends Survey
Executive summary
2011A joint Airline Business and SITA survey
The Airline ITTrends Survey
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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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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
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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%
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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
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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%
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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