Strong SITA Performance Indicates Brightening Future for Air Transport Industry

SITA today announced strong results for 2004, following a successful

restructuring of the company since 2003 with the group as a whole posting

combined revenues of US$1.58 billion, well above budget.
SITA’s robust results were achieved by its two operating entities - SITA SC

and SITA INC..


SITA SC 2004 revenues came it at US$940 million. The result reflects of

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SITA SC’s continued success in migrating the air transport industry from

‘legacy networks’ to Internet Protocol (IP) - based networks. SITA SC has

reduced the industry’s overall network costs by about US$80 million in

price reductions, across both legacy and IP connections. Total sales

performance as measured by total contract value reached US$317m.

SITA INC recorded revenues for the year of US$642 million, ahead of target.

The company also exceeded budget for pre-tax profits, improved free

cash-flow and comfortably met budget for return on investment. Total

contract value stood at US$792 million, 82 percent above 2003.

 

The strong performance from both businesses is an indication of SITA’s

success in helping the air transport industry to drive down its operational

costs through business simplification and through savings on their

communications systems and IT infrastructure and systems.


Paul Coby, Chairman of SITA, said: “Three things matter to the Air Transport Industry (ATI) these days - cost, cost and cost!” He continued: “The best and fastest way to cut costs is to simplify your business and the smart use of technology is a fantastic driver of business simplification

and process standardisation.  SITA as the ATI’s own provider of

telecommunications and IT solutions, knows what our industry needs, and is

committed to providing it at an economical cost.”

 

Coby added: “In 2004, SITA made strong progress in all areas and really turned the

corner. Both of our businesses did exceptionally well.

 

Our communications services unit, SITA SC, saved the industry US$80m in

price reductions, adapted its offering to better meet the needs of airlines

and started new services such as consulting and network integration. This

led to new business of US$109 million - 28% over budget.  This shows the

health of our business model.  SITA’s network traffic grew by over 20% in

2004, which is an indication of the returning strength of the Air Transport

Industry.”

 

 


“For SITA INC the year was marked by three exciting new ventures. First,

the OnAir venture launched with Airbus will make mobile phone use a reality

on aircraft soon.  Second, we are transforming the air cargo business

through the development of next generation IT solutions in partnership with

Europe’s largest all-cargo airline, Cargolux. Through the merger of SITA

and Cargolux subsidiaries, we have created the world’s only company

dedicated to providing IT solutions for the air cargo industry.  Third,

partnering with Siemens, we are turning the mobile phone into an essential

tool for passengers wishing to check-in remotely.

 

“As I said, cost reduction is driven by simplification which is driven by

technology.  So we are ready to simplify passengers’ journeys through our

e-ticketing, booking and self-service kiosks. I believe that SITA is now a key enabler of global recovery for the air transport industry.”

 

Coby concluded:  “We are a 55 year old organisation, written off by many

just a few years ago.  We are now playing a key role in our industry’s

drive to cost driven simplicitiy.  SITA is turning the corner, and so is

our industry.”

 

Peter Buecking (pictured), President of SITA, added: “SITA’s business is about simplifying operations, not just for the sake of

doing so, but because with simplification comes reduced cost, increased

efficiency and increased profitability.

 

“Simplification, with all its benefits, has never been needed more than at

a time when high demand, increased traffic, low cost point-to-point travel

and high oil prices combine to put huge financial pressures on the

industry.

 

“Our strong operational performance in 2004 show that SITA is playing a key

role in improving the industry’s financial health.”

 

Hans-Peter Kohlhammer, Director General of SITA SC, commented:

 

“SITA SC has ended 2004 in a position of financial strength, having gained

a record amount of new business. Our customer retention rate remains a

phenomenal 95 percent. We are in a stronger market position and we are

focusing on expanding our community role to provide new services which help

the industry reduce costs today, and help build tomorrow’s future. SITA SC

is transforming itself into to a communication services integrator, making

dramatic progress in enhancing the value we provide to the air transport

industry that created us and whom we serve with dedication.”

 

After his first full year as managing director of SITA INC, Francesco

Violante said: “Business volumes in 2004 showed remarkable double-digit

growth in key areas including passenger boarded volumes of 105 million, up

18%; ACARS traffic, up 16%; and Cargo Air Way Bills, up 20%. We have

re-organised and established a momentum for continued growth in both

existing and new markets.”

 

Paul Coby concluded by paying tribute to the SITA Executive Committee -

Peter Buecking, Hans-Peter Kohlhammer and Francesco Violante - and the

dedication and commitment of everyone in SITA. He added:

 

“SITA has now turned the corner and is on the way up.”
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