the airline it trends survey 2004 - spec 2000 · the airline it trends survey 2004 - executive...

The Airline IT Trends Survey 2004- Executive Summary -

Brijdeep SahiVice-President, Marketing

SITA SC

The Airline IT Trends Survey 2004

SITA & the Air Transport Industry

• SITA’s unique position as a neutral customer-driven cooperative, necessitates our constant assessment of industry needs, in order for us to provide solutions which match these business needs

• Surveys, such as this one with Airline Business magazine, are part of this assessment


Introduction and ObjectivesAirline IT Trends Survey

• Sixth year and most comprehensive research of its kind.

• Provides benchmarks for individual airlines and the industry as a whole to measure progress against.

• NSM Research, an independent market research agency, polled senior IT personnel working within the top 220 passenger carriers together with key players in cargo, charter and regional markets.

• 109 responses now received (roughly 50% of the sample) accounting for around 67% of world airline revenue.

• CD-ROM to all responding airlines.

Airport IT Trends Survey

• Earlier this year SITA and Airline Business joined with ACI to undertake the first Airport IT Trends Survey

• 48 airports responded, representing around 50% of top 200 airports by revenue.

• Cross referencing the two Surveys provides a detailed insight into the current aviation IT landscape.


Airline Type & Location(Base: All respondents)

22%

14%

33%

29%

2%

Mainline scheduledpassenger airline

(ranked 1-25)

Mainline scheduledpassenger airline(ranked 26-50)

Mainline scheduledpassenger airline(ranked 51-99)

Mainline scheduledpassenger airline(ranked 100+)

Cargo

28%

25%

14%

14%

12%

7%

Europe

Asia-Pacific

North America

Africa

Central / South America

Middle East


SITA’s view of the key business issues highlighted in the Airline IT Trends Survey

• IT investment must be aligned to strategic business objectives

• Profit recovery rests on cost reduction and efficiency gains

• So IT must play its central role in:

– Helping to cut costs

– Common sense solutions such as ‘Common Use’

– Simplifying the business» 100 per cent e-ticketing by 2007 (interline e-ticketing to become a common standard)

» universal acceptance of common use self-service kiosks

» implementation of bar code standards to replace costly magnetic stripe boarding passes

» the rapid adoption of Radio Frequency Identification (RFID) baggage tags

Management Issues


Planned investment in IT and telecommunications for 1999 - 2004(Base: All respondents)

0

0.5

1

1.5

2

2.5

3

3.5

4

1999 2000 2001 2002 2003 2004

Average

Wgt Average

Average WeightedAverage

2004 2.1 2.5

2003 2.4 2.8

2002 2.2 2.6

2001 2.8 3.4

2000 2.5 n / a

1999 2.4 n / a

The average and weighted average investment in IT&T have fallen

Low Cost Carriers invest 1.2%

Larger spending by major carriers


Increase56%

Decrease16%

Stayed the same26%

No answer2%

Expected change in investment in 2005(Base: All respondents)

(2003 = 39%)

(2003 = 20%)

(2003 = 35%)

More are expecting increased budgets next year. Optimism – but smart investing is crucial

Airport IT Trends: 60% expected increase

30% the same budget next year.


Investment priorities for future IT projects(Base: All respondents)

High Priority Low Priority

53%

43%

22%

20%

19%

17%

32%

28%

31%

32%

48%

23%

12%

20%

30%

34%

25%

40%

1%

6%

15%

6%

7%

14%

1%

2%

0%

2%

0%

3%

1%

2%

2%

6%

1%

4%

Short Term Projects with provencost savings

Customer Services or marketingadvantage

Simplifying internal processes

Running existing infrastructure

Medium Term Projects to cutcosts

Long Term Strategicinfrastructure upgrades

'1' '2' '3' '4' '5' No answer


Obstacles to achieving IT strategy(Base: All respondents)

top 3 issues for 6 years

61%

55%

51%

43%

40%

20%

41%

30%

28%

41%

28%

17%

16%

7%

6%

6%

16%

9%

4%

2%

Lack of investment/reduced budget

Lack of skilled IT people

Lack of IT people with airline experience

Development of applications internally takes too long/ is tooexpensive

Tactical projects taking up too much resource

Resources focussed on maintaining legacy systems

Lack of executive management/ board level support/vision

Technology is not yet ready

Poor outsourcing experience

Resources focused on meeting additional security regulations

Any obstacles

Main obstacle


IT functions already outsourced / plan to outsource(Base: All respondents)

44%

43%

45%

32%

29%

28%

28%

21%

11%

15%

12%

19%

18%

19%

14%

23%

19%

12%

35%

40%

26%

42%

36%

48%

37%

46%

50%

6%

5%

10%

8%

16%

10%

12%

14%

27%

Supply of Airline Specific Applications (front office)

Network Management

Web hosting

Application maintenance

Desk-Top Management

Datacentre operations

Supply of general business applications (back office)

Security and electronic detection systems

Majority of IT functions

Already outsourced Plan to outsource by 2006 Keep in-house No answer

Business-to-Business


Yes63%

No30%

No answer7%

Proportion of organizations who are using the Internet to undertake commercial transactions online(Base: All respondents)

2004 = 63%

1999 = 40%


Areas currently/plan to use the Internet to undertake commercial transactions online(Base: All respondents)

35%

26%

25%

18%

15%

21%

20%

16%

11%

34%

30%

15%

12%

5%

6%

8%

3%

4%

4%

3%

4%

8%

11%

5%

Spare part purchases

Engine Manufacturer

Airframe Manufacturer

Maintenance services

Other manufacturer

Catering services

Airport

Handling agent

ATC Agencies

General office supplies & equipment

IT supplies

Fuel

Currently use Plan to use

Aerospace:

Operations:

Purchasing:

Expected cost savings:Average

2004 = 9.47%2003 = 9.71% 2002 = 7.46%2001 = 12.2%2000 = 12.8%

Open Responses


19%

14%

11%

7%

6%

E-ticketing/online sales

Migration to newplatform systems

Web/internetdevelopment

Systems integration

Cost cutting/costcontainment

Major IT successes of the last 12 months(Base: All respondents)

79% responded


22%

6%

6%

5%

5%

2%

Too slow/delays with implentation

Budget constraints

Lack of strategy/unable to establish strategy

Lack of support/managed support

All refs systems failures

Security/virus

Major IT failures of the last 12 months(Base: All respondents)

53% responded


20%

14%

7%

7%

6%

5%

4%

3%

2%

Budget/cost constraints

Upgrading/modernising infrastructure

To be seen as a business unit

Security

Eticketing

Competitiveness

CRM

Web applications

Revise/establish IT strategy

Biggest future IT challenges(Base: All respondents)

74% responded

Budget / cost constraints are

consistently reported the

biggest future IT challenge


100% of those surveyed agreed upon this single topic

Only truly stable software should be installed on

airplanes!


For further information:

www.sita.aero

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