SITA’s 8th Annual Airline IT Trends Survey carried out in conjunction with Airline Business magazine, indicates that aviation will become the world’s first totally IP (Internet Protocol)-enabled industry, putting the power of the world-wide web at the service of the airlines and passengers.
The survey results reveal for the first time that 82% of airline locations now have IP connectivity, rising to 89% by the end of 2007 and 93% by the end of 2008. In parallel, 78% of airline systems are now IP-enabled and this will reach 83% by the end of 2007 and 87% by the end of 2008.
Paul Coby, SITA Chairman, said, “This year’s Airline IT Trends survey provides the clearest evidence yet that the airlines will be the world’s first fully web-enabled industry. IP is the underlying communication technology that enables many new applications, such as online reservation systems, so it has brought a radical change to air travel ever since SITA developed the first internet booking engine just over ten years ago. It is also driving the self-service business model, which is both convenient for passengers and helps airlines keep ticket prices down.”
The survey shows just how rapidly airlines are deploying self-service technology and how quickly passengers are embracing it. Web check-in has now been implemented by 42% of airlines and this will increase to 72% by the end of 2007, while 27% of passengers are now using check-in kiosks and this number is expected to rise to 38% by the end of 2007.
The survey also found that only 31% of self-service kiosks are common-use i.e. can be used by customers of more than just one airline, but this is expected to rise to 40% by the end of 2007.
Francesco Violante, SITA CEO, said, “The speed at which the industry is moving towards a self-service passenger model is clearly borne out by the technology investment priorities of airlines. 80% of airlines responding to the survey see projects with proven payback and cost savings, such as on-line booking, bar coded boarding passes and self-service check-in as their highest priority, up from 50% last year.”
He also pointed to greater optimism among airlines about the savings to be derived from business to business e-commerce. “The trend for the last few years has been a declining expectation of savings from B2B investments, but this has now reversed with airlines anticipating savings in the order of 13% compared to traditional processes, up from the 10% we recorded in our last survey,” Violante said.
The survey establishes for the first time that the average airline IT headcount is 1.8% of the global airline workforce. 52% of airlines have higher IT headcount than five years ago and 52% expect to increase IT headcount over the next three years.
The on-line booking revolution which saves airlines significant amounts of money on distribution costs, continues to gain pace. 32% of tickets worldwide are currently sold on-line (compared to 20% in 2005) and 72% of these were sold through the airlines’ own web sites leaving room for improvement as airlines seek to eliminate commissions on ticket sales.
Just 8% of airlines sell no tickets through web-based channels. Call centre ticket sales are at 18% compared to 20% in 2005. The rise in online ticket sales is an indicator of further pressure on the traditional travel agent.
The major issues highlighted by airlines with regard to on-line sales were the complexity of airline pricing/fares, 30%; lack of payment security/fraud, 19%; and lack of interlining/ codesharing, 15%.
There has been growth in airlines issuing e-tickets, from 27% in the 2005 Airline IT Trends Survey, to 59% of this year’s respondents. This is expected to rise to 78% by 2007 and 90% by 2008. Just 7% of airlines now issue no e-tickets compared to 23% last year.
Bar coded boarding passes are also on the rise with 50% of airlines expecting to issue them by the end of this year and that number will rise to 79% by the end of 2007. This will facilitate self-service check-in, whether online or via kiosk. These two initiatives alone are saving the industry billions of dollars.
The survey also provides further confirmation of the industry’s appetite for inflight passenger communications. The percentages of airlines expecting to offer the following inflight communication channels by the end of 2008 are: internet access, 59%; email, 58%; SMS, 52%; and mobile phones, 46%.