The Airline IT Trends Survey 2004 - Spec 2000 · The Airline IT Trends Survey 2004 - Executive...
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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
The Airline IT Trends Survey 2004
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.
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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.
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
Yes63%
No30%
No answer7%
Proportion of organizations who are using the Internet to undertake commercial transactions online(Base: All respondents)
2004 = 63%
1999 = 40%
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
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
The Airline IT Trends Survey 2004
100% of those surveyed agreed upon this single topic
Only truly stable software should be installed on
airplanes!
The Airline IT Trends Survey 2004
For further information:
www.sita.aero