airline it trends survey 2013

8/12/2019 Airline IT Trends Survey 2013

1/16


2/16

2 THE AIRLINE IT TRENDS SURVEY| SITA 2013


3/16

FOREWORD

The Airline IT Trends Survey, co-sponsored by Airline

Business and SITA shows an airline IT climate that is

cautiously improving. IT budgets are expected to improve at

the majority of airlines in 2013, while the global level of IT

operational spending should reach an estimated US$10 billion

in 2013.

Airline IT investment priorities continue to focus on mobilizingthe passenger journey, as they have done for the last three

years, but airlines are also showing a strong interest in

improving business intelligence to better understand their

operations and customers.

The overall impression from this years survey is one of an

industry that is fast adopting the digital world. This is bringing

many advantages in the form of automation and new services,

but also challenges in making sure these technologies can

be widely adopted so that passengers benefit at both ends of

their journey.

For the last 15 years we have been tracking the key technology

trends of airlines. More recently we have complemented

this research by publishing surveys on technology trends

in the wider air transport industr y, including airports and

passengers. Taken together, they provide a unique perspective

on the way technology is shaping the future of air travel.

For this we thank our survey respondents. We appreciate it is

only possible to provide such a comprehensive industry view

through their continuing support. We hope you will continue to

support our research in the years to come.

We welcome any feedback or comments on the survey.

For more information on all our surveys and accompanying

features and analysis, visit www.sita.aero/surveys.

For more information go to:

www.sita.aero/surveys

www.sita.aero/ittrendshub

Or search the App Store for SITA IT Trends Hub

Francesco ViolanteChief Executive Officer, SITA

Max Kingsley-JonesEditor, Airline Business

THE AIRLINE IT TRENDS SURVEY | SITA 2013


4/16

THE AIRLINE IT TRENDS SURVEY| SITA 2013


5/16

CONTENTS

Investment in IT is edging up 6

Mobile and business intelligence are top investment priorities 7

Deeper integration of mobile services 8

Mobile services are transforming operations 9

Direct channels drive ancillary revenues 10

Airlines want deeper insights 12

Check-in landscape is evolving 13

Methodology 14

5THE AIRLINE IT TRENDS SURVEY | SITA 2013


6/16

At the global level, operational IT spending remained stable

in 2012 at 1.46% of revenues. On the back of higher industry

revenues it meant IT spending in absolute terms stayed at the

same level as 2011.

This year, airlines are expecting IT spending to pick up slightly

to 1.52% of revenues. This will translate into an increase

in absolute IT spending, should the anticipated growth of

industry revenues for 2013 be confirmed.

This optimism for increased IT spend looks set to continue

with the majority of airlines anticipating further budget

increases in absolute terms in 2014, while less than one in

five is expecting a tightening in IT spend.

INVESTMENT IN IT IS EDGING UP

58%EXPECT IT SPENDING TO INCREASE IN 2013

1.46% 1.52%

2012(ACTUAL)

2013(PLANNED)

Increase Same Decrease

2012 2013 2014

29%

53%

17%21%

58%

22%

23%

58%

19%

Operational IT and telecoms spend as apercentage of revenues

Change in available absolute IT spending



7/16

MOBILE AND BUSINESS INTELLIGENCEARE TOP INVESTMENT PRIORITIES

Leveraging consumer mobile technology remains the hotspot

of IT investment. Offering mobile services to passengers has

topped the investment list for the last three years with almost

the entire industry now investing, or planning to invest, in

this area, of which 66% of airlines will make a significant

investment.

Another important area of IT investments this year is

business intelligence (BI). It was ranked fourth in last years

survey, when one in five airlines had no plans to invest. This

year, all airlines surveyed are showing interest, with nearly

two-thirds running a major investment programme.

A third area high on the investment agenda for airlines is

customer relationship solutions with 97% of airlines looking

at approaches such as personalization that build loyalty and

offer customized services to passengers. Almost all airlines

(92%) plan to monetize this investment through higher

ancillary revenues.

100%OF AIRLINES ARE MAKING BUSINESSINTELLIGENCE INVESTMENTS IN THE NEXT3 YEARS

Passenger servicesvia mobile device

Business Intelligence solutions

Customer relationshipmanagement e.g. personalisation

Expansion of ancillary services

Passenger services via social media

Wireless crew services in-flight

Wireless passenger services in-flight

Major program R&D/Pilot Program No plans

66% 32%

37%

3

3

8%

7%

29%

44%

44%

53%

36%

36%

39%61%

60%

49%49%

41%

35%

19%

Airline investments in IT over the next 3 years



8/16

Airlines are making a big commitment to a mobile future for

passenger services 97% of airlines are investing in this

channel with the intention of mobilizing the entire journey.

The initial focus is on services already available via the airline

website, such as flight search and check-in. But this is giving

way to a new battleground of mobile functionality that offers

differentiated services to passengers on the move. The result

will be a much deeper integration of mobile services within

the passenger experience.

Check-in apps, for example, are already available from 61% of

airlines, while flight search is higher at 65% of airlines. The

focus for these airlines will now shift over the next three years

to add new services, such as missing bag reporting (61% of

airlines), re-booking (63%), and complaint handling (57%).

Mobile boarding passes

The replacement of magnetic strip boarding cards with the 2D

bar-coded version has been a major industry success story.The mobile variant is fast gaining momentum and looks set to

be the de facto boarding pass of the future.

However, the best method of storing and displaying the

mobile boarding pass on the passengers device is still being

debated within the industry.

Currently, 53% of airlines provide mobile boarding passes

through their own airline application and this will rise to over

80% in 2016, making it the dominant method in the short-term.

Third-party travel wallets, such as the Apple Passbook,

Samsung Wallet and Google Now, are also starting to feature.

Today, only 21% of airlines provide boarding passes throughother apps, but it will reach 62% in three years, giving

passengers the option to use their preferred method.

NFC has also been much talked about but it is still a work-

in-progress. A lack of standards, low global penetration of

enabled phones and the need to deploy new equipment at

airports is causing the majority of airlines (59%) to adopt a

wait-and-see approach.

DEEPER INTEGRATION OFMOBILE SERVICES

62%OF AIRLINES WILL INTEGRATE BOARDINGPASSES WITH 3RD PARTY WALLETS BY 2016

% Implemented

0 20 30 400

40

20

60

80

50 60

Missingbaggage

Rebooking

Onboard entertainment

NFC for boarding

Geo-location

Travel sales

Check-in

Flight search

Boarding

Flightnotification

Promotions

Baggagestatus

Customer complaints

%p

lannedby2016

Promotions

Niche Functionality

Established

Next Differentiator

Airline adoption of mobile services for passengers by 2016

Implemented by 2016Already implemented No plans

Airline App 3rdParty Wallet NFC Enabled

41%

3%

37%

38%

59%30%

53%

17%

21%

% of airlines offering mobile boarding passes



9/16

MOBILE SERVICES ARETRANSFORMING OPERATIONS

This years survey reveals a rapidly growing adoption of

mobile solutions not just for passenger services, but also for

the airline workforce.

The initial focus is on improving productivity in the aircraft

by moving from paper to digital processes using tablets and

wireless connectivity. Over the next three years around eight

out of 10 airlines plan to provide flight crews with electronic

flight bags (EFBs) and automate cabin crew services.

Passengers should see the benefit in improved onboard

service. By using tablets in the cabin, staff can access the

airlines customer relationship data to tailor their service to

the individual, as well as capture and resolve issues.

A second wave of services using tablets for airline workforce

will focus on airport operations such as ground operations

and aircraft maintenance. Up to now they have been a lower

priority, with only a few airlines implementing tablets in these

areas but over the next three years that will jump to over 70%

of airlines.

75%+OF AIRLINES WILL DEPLOY CREW SERVICESON TABLETS BY 2016

% Implemented

0 10 20 30 400

50

100

50

Electronic flight bag

Cabin crew servicesCrew rostering/comms

Ground operations

Aircraft maintainance

Flight dispatch

Flight planning

Passenger transfer

Runners-Up

Next Wave

Mainstream by 2016

%I

mplemen

tatedby2016

Airline adoption of tablets for operations by 2016



10/16

A recent analysis published by IdeaWorks showed ancillary

revenue can exceed 20% of total revenues for some airlines.

Ancillary services are now a much more important part of the

revenue mix. They not only offer airlines the potential to grow

revenue but also, importantly, the opportunity to dif ferentiate.

Results from this years Airline IT Trends survey show that

today the vast majority of ancillary revenues are earned

through direct sales channels, such as the airline website,

with the remainder through indirect channels. On average

airlines earn nine times more ancillary revenue through

direct channels than indirect, even though the indirect

channel accounts for nearly half of ticket sales.

A large part of the discrepancy is due to the lack of standards

and control over what is presented to the end customer, which

make ancillaries through indirect channels very challenging.

Recent new approaches may change this trend and enable

more transparency across all channels. However, for now

airlines see direct channels as by far the most significant

contributor to ancillary revenues, with 89% of non-ticketingsales expected through this channel by 2016, an increase

from 87% today.

DIRECT CHANNELS DRIVEANCILLARY REVENUES

Direct

Channel

89%

ry sales

14%OF SALES FROM MOBILE, KIOSK, ANDSOCIAL MEDIA BY 2016

Proportion of ancillary revenue for 2016 by channel

1 IdeaWorks press release dated 05 June 2013. Available at www.

ideaworkscompany.com/category/press-releases



11/16

Using new sales channels saves distribution costs and

boosts ancillary opportunities

Airlines are aiming to use new direct sales channels to

strengthen their grip on ticket sales at the expense of indirect

channels. New channels via mobile phones, kiosks and social

media will represent nearly 14% of ticket sales by 2016, while

indirect sales through GDSs will reduce further in the same

time period.

Investment in mobile services is one of the main IT priorities

with nine out of ten airlines planning to sell tickets via mobile

phones by 2016. Airlines expect to be rewarded with a leap in

mobile sales, estimated to reach over $70 billion by 2016, or

10.3% of total sales, up from just below 3% today.

Sales through kiosks more than doubled over last year

as airlines enhance their capabilities beyond check-in.

Today kiosk sales accounts for over 1% of sales and survey

respondents expect this to double again by 2016.

Social media as an alternative sales channel remains behind

expectations with only 1.6% of ticket sales generated this

way despite 22% of airlines having invested in social media

embedded apps for ticketing. The volumes through social

media have not visibly increased from last year, indicating

non-sales activities, such as marketing and customer service,

offer the most beneficial use of this channel.

Mobile apps for ancillary sales to become mainstream

Airlines expect mobiles to contribute 9.9% of ancillary

revenue by 2016, more than seven times the figure of today.

But the ability of airlines to boost non-ticketing revenuesthrough mobile apps depends on multiple developments in

many airlines. Today, 58% of airlines can sell tickets through

a mobile app but only 30% of airlines can currently sell any

kind of ancillary service via this channel.

However, airlines are star ting to ramp up their mobile

capabilities. For example, only 12% of airlines today can

collect baggage fees through this channel, but by 2016 this

will have increased to 84%, while 90% of airlines will be able

to offer priority boarding, lounge access and seat booking.

US$70BOF SALES THROUGH MOBILE BY 2016

Already implemented Implemented by 2016

Established Emerging

Mainstreamadoption

Airline Services

e.g. Seats, Priority

Tickets Other travel

services e.g.

car hire, parking

95%90%

Baggage

Fee

84% 74%

Percentage of airlines with sales capabilities viamobile devices

2.0%

1.6%

10.3%

2012 2013 2016PLANNED

mobile

social

kiosk

Percentage of total sales through new channels



12/16

This years survey shows business intelligence (BI) has moved

up the IT agenda. Airlines want to know more about their

customers and have better information for decision making in

their operations.

72% of airlines rate Sales and Marketing as the highest

priority area for BI investments, indicating a strong desire by

airlines to drive revenues higher using techniques borrowed

from the retail industry such as personalization, which

depends on having access to customer interactions.

Using BI for improving operational awareness is another

area getting serious attention. 88% of airlines rate it a high,

or moderately high, priority over the coming years. Having a

clearer picture of operations will allow airlines to optimize

performance across their route network and enable them to

proactively mitigate disruption.

Underlying BI systems is the need for timely and accurate

data. Achieving this remains a common issue across the

industry with only 9% of airlines rating data quality as meeting

all their requirements, while only 7% of airlines have achievedall the necessary integration of different data sources from

across their company.

AIRLINES WANT DEEPER INSIGHTS

72%OF AIRLINES RATE SALES AND MARKETINGAS THE HIGHEST PRIORITY AREA FORBUSINESS INTELLIGENCE INVESTMENTS

Areas of priority for business intelligence investments

Sales

& Marketing

Passenger

Experience

Operational

Awareness

1st 2nd 3rd



13/16

While the majority of passengers still check-in with an agent

at the airport, self-service continues to become more popular

with passengers. However, the landscape for self-service

check-in is shifting as mobile phones become a serious

option for passengers and airlines explore the possibility of

eliminating the check-in process altogether.

Since 2009, the rate of growth of passengers using web

check-in, as well as kiosk check-in, has slowed. Today, mobile

represents only 3% of check-ins, but by 2016 it is expected

to climb five-fold to 15% and in doing so will have taken just

three years to exceed the number of passengers using kiosk

check-in today.

Airlines still see passenger demand for kiosk check-in, with

usage expected to increase to 18% of passengers by 2016

from 14% today.

Early adopters are focusing attention on alternative

approaches such as automatic check-in systems that can give

passengers a passive role in the check-in process with seats

allocated automatically based on pre-defined preferences.By 2016, 8% of passengers plan to use automatic check-in.

Kiosks will offer more options

The role of kiosks is evolving with airlines packing in

additional functionality to make them a far more versatile

tool. While check-in is the primary purpose, passengers can

now purchase a range of airline ser vices and complete a

number of tasks.

The priority today for most airlines is adding baggage

functionality to bring self-service to those passengers with

more than hand luggage. Almost eight out of 10 airlines will

offer bag tag printing in 2016, up from 29% today.

A quarter of airlines have kiosks that provide important

information, such as flight status and gate direction, and

nearly half of airlines expect to introduce this functionality in

the next three years.

As their functionalities broaden, kiosk will provide a greater

opportunity to upsell services by offering upgrades, priority

boarding, lounge access and enable passengers to add

additional baggage.

CHECKIN LANDSCAPE ISEVOLVING

8%OF PASSENGERS WILL USE AUTOMATICCHECKIN BY 2016

Proportion of passengers using check-in channel

Airline adoption of kiosk functionality by 2016

Runners-Up

Next Wave

Mainstream by 2016

% Implemented

%I

mplementatedby2016

0 10 20 300

50

100

Flight transfer

Rebooking services Ancillary service sales

Lost baggage reporting

Ticket sales

Info services kiosk

Bag tag printing



14/16

ABOUT SITAS AIRLINE SURVEY

The Airline IT Trends Survey, co-sponsored by Airl ine

Business and SITA, is a well established as the global

benchmarking survey for the airline industry. The SITA

surveys (www.sita.aero/surveys) investigate emerging trends

and technologies that are set to transform the industry in

the years to come. Business Intelligence, Mobile Travel andPassenger Management are at the forefront of this change,

and tracking their evolution is an important element in this

survey. Many other emerging and established trends will be

tracked, and, as every year, we benchmarked the industry IT

spending in 2013 and beyond.

The survey was first produced in 1999, and was designed

to offer all air transport industry stakeholders the latest

facts, figures and trends related to technology adoption and

spending. Comparisons to previous surveys are made where

appropriate, although the respondent sample may vary

between years.

Questionnaires were sent to a senior IT executive in each of

the top 200 passenger carriers, including low cost operators,

together with carriers representing important players in

the regional and leisure sectors during spring this year. The

survey represents the views and insights of over half of the

top 100 carriers, providing a clear insight into IT strategic

thinking and developments for the industry. The response to

this survey is confidential, and the responses are received by

an independent research company. The data analysis is based

on the aggregated response of all airlines.

For more information go to:

www.sita.aero/surveys

www.sita.aero/ittrendshub

Or search the App Store for SITA IT Trends Hub

RESPONDENTS PROFILE

The respondents this year are passenger airlines including

low cost operators, together with carriers representing

important players in the regional and leisure sector. The

Survey is truly a global one, and we received a significant

response from major carriers in every geographical region.

METHODOLOGY

Total passengers carried by respondents

Split of respondents

500

1,000

1,500

2010 2011 2012 2013

Millions

Africa/Middle East

Asia-Pacific

Europe

Americas

23%

32%

30%

15%

Regions

10 19.9Million

5 9.9Million


15/16


16/16

For further information,

please contact SITA by

telephone or e-mail:

Americas

+1 770 850 4500

[email protected]

Asia Pacific

+65 6545 3711

[email protected]

Europe

+41 22 747 6111

[email protected]

Middle East, India & Africa

+961 1 637300

[email protected]

SITA AT A GLANCE

The air transport industry is the most dynamicand exciting community on earth and SITA is its heart.

Our vision is to be the chosen technology partner of

the industry, a position we will attain through flawless

customer service and a unique portfolio of IT and

communications solutions that covers the industrys

every need 24/7.

We are the innovators of the industry. Our experts

and developers keep it fuelled with a constant stream

of ground-breaking products and solutions. We are

the ones who see the potential in the latest technology

and put it to work.

Our customers include airlines, airports, GDSs and

governments. We work with around 500 air transport

industry members and 2,800 customers in over 200

countries and territories.

We are open, energetic and committed. We work in

collaboration with our partners and customers to

ensure we are always delivering the most effective,

most efficient solutions.

We own and operate the worlds most extensive

communications network. Its the vital asset that

keeps the global air transport industry connected.

We are 100% owned by the air transport industry

a unique status that enables us to understand and

respond to its needs better than anyone.

Our annual IT surveys for airlines, airports and

passenger self-service are industry-renowned and

the only ones of their kind.

We sponsor .aero, the top-level internet domain

reserved exclusively for aviation.

In 2011, we had consolidated revenues of

US$1.517 billion (1.09 billion).

For further information, please visit www.sita.aero

SITA 2013All trademarks acknowledged. Specifications subject to change without prior notice. This literature provides outlineinformation only and (unless specifically agreed to the contrar y by SITA in writing) is not part of any order or contract

Follow us on www.sita.aero/socialhub

airline it trends survey 2013

Documents