SITA’s 8th Annual Airline IT Trends Survey
carried out in conjunction with Airline Business magazine, indicates that
Asia Pacific’s airlines are embracing self-service air transportation,
shifting to a traveler-centric model to facilitate passenger movement.
The survey shows just how rapidly airlines in the region are deploying
self-service technology and how quickly passengers are adopting it. There
has been growth in Asia Pacific airlines selling e-tickets, from 22% in the
2005 Airline IT Trends Survey, to 50% of this year’s respondents. This is
expected to rise to 76% by 2007 and 94% (compared to the global figure of
90%) by 2008. Just 4% of airlines in the region issue no e-tickets compared
to 9% last year.

Bar coded boarding passes are also on the rise with 60% of airlines
expecting to issue them by the end of this year and that number will rise
to a leading 88%  (compared to global 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.

Web check-in has now been implemented by 50% of airlines and this will
increase to 77% by the end of 2007, ahead of the 72% globally.

By the end of 2007,  the number of passengers using check-in kiosks is
expected to rise from the now 22% to 29%. The survey also found that only
28%  of self-service kiosks are common-use i.e. can be used by customers of
multiple airlines, but this is expected to rise to 41% 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,” added Violante.

This year’s survey indicates that aviation will become the world’s first
totally IP (Internet Protocol)-enabled industry, putting the power of the
worldwide web at the service of the airlines and passengers.

The survey results released today reveal that 82% of airline locations
worldwide 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 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 also establishes for the first time that the average IT
headcount at Asia Pacific airlines is the highest globally with 2.2%
compared with 1.8% of the global airline workforce. In terms of percentage
of revenues spent on IT, the region has one of the lowest at 2.1%.

58% of respondent airlines in the region have higher IT headcount than five
years ago and 54%  expect to increase IT headcount over the next three
years.

The on-line booking revolution, which saves airlines enormous amounts of
money on distribution costs, continues to gain pace in the region. 19% of
tickets are currently sold on-line (compared to 10% in 2005), leaving room
for improvement as airlines seek to eliminate commissions on ticket sales.

Just 8%  of airlines sell no tickets through web-based channels, and call
centre ticket sales are at 14% compared to 12% in 2005. The rise in online
ticket sales is an indicator of further pressure on the traditional travel
agent.

The major issues highlighted by Asia Pacific airlines with regard to
on-line sales were the complexity of airline pricing/fares - 40%, and the
desire not to upset traditional channels - 16%.

Violante also pointed to greater optimism among airlines globally about the
savings to be derived from business to business e-commerce. “The trend for
the last few years has been a decline in 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.”

The survey also provides further confirmation of the region’s appetite for
inflight passenger communications. Airlines using SITA-owned OnAir onboard
mobile   communications   solutions   include Singapore Airlines,  Asiana
Airlines,  EVA Air, Malaysia Airlines, Qantas Airways, bmi and Ryanair. The
percentages   of airlines in the region expecting to offer inflight
communication channels by the end of 2008 are: internet access - 66%; email
- 62%; SMS - 50%; and mobile phones - 46%.
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