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Air Transport IT Summit 2010
23-24 June, Brussels
The Next Digital Decade
How is technology supporting the airlines’ visionfor industry transformation?
The Airline IT Trends Survey 2010
Jürgen KölleSenior Director Portfolio Marketing
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Airline IT Trends | 23rd June 2010 | 3 ©SITA
17%
33%
19%
31%
Respondents breakdown
US$ 1,000-4,999 million
US$ <499 millionUS$ 500-999 million
US$ 5,000+ million
19%
33%
26%
22%
Africa/Middle East
EuropeAsia Pacific
Americas
Revenue Region
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The Airline IT Trends Survey 2010 | June 23, 2010 | 8 ©SITA
IT&T spend stabilises
Operational IT&T Spendin $bn
1.8%
5
10
2005 2006 2007 2008 2009 2010
2010 IT&T operationalspend as % of revenue
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The Airline IT Trends Survey 2010 | June 23, 2010 | 9 ©SITA
Spend 2011 compared to 2010:Positive outlook
• Increasing businessconfidence translates
into expectation forhigher IT spendingin 2011
• Regional Differences
Decrease
Increase
The same
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The Airline IT Trends Survey 2010 | June 23, 2010 | 10 ©SITA
IT priorities return from short-termback to long-term and strategic focus
IT staff hiring freeze
Defer IT projects(capital expenditure)
Renegotiate IT suppliercontracts
Accelerate IT projects
with short RoI
Extend partnerships withstrategic IT suppliers
23%47%
37%48%
48%76%
57%
54%
52%39%
2009
2010*
20092010*
2009
2010*
2009
2010*
2009
2010*
*Planned
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IT Priorities: Areas for investment
82%
Low High
44%
37%
35%
33%
35%
46%
41%
35%
Passenger operations& related services
Flight operations
Aircraft operations
Passenger security
“Reducing cost of business operations”is top priority in driving IT investments
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IT supporting the vision for industrytransformation, to
increase self-service in passengeroperations
change the channel mix in traveldistribution
grow ancillary revenue
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Travel Distribution:Continuous shift in distribution channels
Call CentresGDS (incl. OTA) Airline Direct
Today Today TodayBy 2013 By 2013 By 2013
50%
30%
40%
20%
60%
10%
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Travel Distribution Evolution:Web, Booking Portals & Mobile
Mobile as a sales channel
Adding web functionality
Next wave for online distribution
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Travel Distribution Evolution:Web, Booking Portals & Mobile
Adding web functionality:Change/Cancel/Rebook (52% done)Onsite shopping tools (61% done)Frequent flyer redemption (51% done)
Mobile as a sales channel
Next wave for online distribution
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The Airline IT Trends Survey 2010 | June 23, 2010 | 17 ©SITA
Travel Distribution Evolution:Web, Booking Portals & Mobile
Next wave for online distribution:Booking portals…for travel agencies (41% done, 43% with plans)for corporate customers (44% done, 38% planned)
Adding web functionality
Mobile as a sales channel
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The Airline IT Trends Survey 2010 | June 23, 2010 | 18 ©SITA
Travel Distribution Evolution:Web, Booking Portals & Mobile
Mobile as a sales channel:70% of airlines plan to use the passengers mobilephone as an additional sales channel
Adding web functionality
Next wave for online distribution
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The Airline IT Trends Survey 2010 | June 23, 2010 | 19 ©SITA
Grow ancillary revenue
63%of responding airlines will
invest in IT solutions thatcan support the
• expansion of ancillaryservices;
• unbundling; and• dynamic packagingwithin the next 3 years
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The Airline IT Trends Survey 2010 | June 23, 2010 | 20 ©SITA
17.0%
29.0%
50.4%
41.4%
Distribution strategy for service fees unbundled
Tickets Sold
Ancillary revenueStrategy for distribution
GDS (Including OTA) Airline Direct
Currently By 2013
41.0%
50.0%
25.8%
37.9%
Currently By 2013
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The Airline IT Trends Survey 2010 | June 23, 2010 | 21 ©SITA
Passenger Operations & Self Service
50,7%
28,9%
21,6%
35,5%
19,5%
19,9% 12,4%
Currently
By 2013
Check-In:• Key element in self-service
• Multi Channel as reality
0% 100%
Agent Internet Kiosk Mobilephone
2.4%
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The Airline IT Trends Survey 2010 | June 23, 2010 | 22 ©SITA
Passenger Operations & Self Service
end-to-end self service in passenger operations
by 2013
40%of
airlines have investment plans for
− Flight Transfer Kiosks
−Disruption Management(e.g. flight rebooking)
− Lost baggage reporting
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The Airline IT Trends Survey 2010 | June 23, 2010 | 23 ©SITA
Passenger Operations & Self Service
61%Kiosks as additionalsales channel
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The Airline IT Trends Survey 2010 | June 23, 2010 | 25 ©SITA
Mobile: Transition from“push information” to ...
Notificationsabout flight
status & delays
Online check-in
via mobilephone
Send BarCoded BoardingPass to mobile
45%
28%
23%
30%
32%
31%
11%
20%
22%
13%
20%
25%
Already doneBy end 2011
By end 2013No plans
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The Airline IT Trends Survey 2010 | June 23, 2010 | 26 ©SITA
44% 13%
21%
23%
32% 18%
26%
24%
Mobile: ...to “business transaction”
70%of airline plan to use thepassengers mobile phone asan additional sales channel
Targetingpassengerswith travel
offers
By end of 2013
Already doneBy end of 2011
Targetingpassengerswith retail
offers
No plans
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The Airline IT Trends Survey 2010 | June 23, 2010 | 27 ©SITA
39%
39%
21%
Mobile: Transition from“push information” to “business transaction”
Pricing Strategy forMobile Phone Services
Considerto charge
For Free
Undecided
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The Airline IT Trends Survey 2010 | June 23, 2010 | 28 ©SITA
Virtualisation: high expectations
Supports the
No. 1 IT
investment priorityto “reduce the
cost of business
operations”
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The Airline IT Trends Survey 2010 | June 23, 2010 | 29 ©SITA
Virtualisation: Strong adoption confirmed
of airlines state the ambition tohave a virtual infrastructureenvironment by 2013
of airlines claim to have somevirtual infrastructure alreadydeployed or will in 2010
prefer “Infrastructure as a Service”via private cloud instead of apublic/3rd party cloud
85%
40%
73%
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The Airline IT Trends Survey 2010 | June 23, 2010 | 1 ©SITA
The Airline IT Trends Survey 2010
For more info seehttp://www.sitasummit.aero/
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Air Transport IT Summit 2010, 23-24 June, Brussels
• Any use, republication or redistribution of this content is expressly prohibitedwithout the prior written consent of the Author. Permission to copy andreproduce content may be granted by the Author, at his discretion, and byrequest only.
• Source: Presentation of Juergen Koelle, SITA, at the 2010 SITA Air TransportIT Summit, Brussels.