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 released today reveal for the first time that 76% of airline locations in the Middle East now have IP connectivity, rising to 78% by the end of 2007 and 80% by the end of 2008. In parallel, 65% of airline systems in the Middle East are now IP-enabled and this will reach 81% by the end of 2007 and 93% 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 in the Middle East are deploying self-service technology and how quickly passengers are embracing it. Web check-in has now been implemented by 8% of airlines and this is to increase massively, up to 54% by the end of 2007, while only 10% of passengers are now using check-in kiosks in the Middle East this number is expected to rise to 27% by the end of 2007.
Hani El-Assaad, SITA RVP Middle East & Turkey, 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. 62% of airlines responding to the survey in the Middle East 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 44% last year.”
Against his expectations there can be found lesser optimism among airlines in this region compared to the international survey results about the savings to be derived from business to business e-commerce. “Globally, 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. However, the survey showed that airlines in the Middle East expect the savings from B2B e-commerce compared to traditional processes to be only 9%, while the last survey discovered a saving expectation of 14%,” Hani El-Assaad said.
The survey establishes for the first time that the average airline IT headcount is 1.9% of the regional airline workforce. 46% of airlines in the Middle East have lesser IT headcount than five years ago and 69% 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. Still the Middle East consumers seem to be less enthusiastic to purchase their ticket online than the rest of the world. 32% of tickets worldwide are currently sold on-line (compared to 20% in 2005), but only 1% of tickets are sold online in the Middle East. The major reason for this is to be found in the fact that still 23% of the regional airlines do not offer their costumers the possibility to purchase tickets through web-based channels. The survey discovered that in the Middle East call centers still remain a key medium to sell tickets distributing 27% of flight tickets in the region.
23% of the interviewed airlines called the fact that not enough customers in the Middle East were buying their tickets online yet as the major reason for not offering this service.
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 on a global basis while in the Middle East a total of 38% of airlines does still not issue e-tickets. Nevertheless, 14% of total sales in the Middle East are currently fulfilled as e-tickets. This is expected to rise to 61% by 2007 and 82% by 2008. This rise in online-ticket sales is an indicator for further pressure on the traditional travel agents.
Bar coded boarding passes are also on the rise with 16% of airlines in the Middle East expecting to issue them by the end of this year and that number will rise to 47% 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 in-flight passenger communications. The percentages of Middle East airlines expecting to offer the following in-flight communication channels by the end of 2008 are: internet access, 69%; email, 69%; SMS,77%; and mobile phones, 53%.
The Airline IT Trends Survey 2006 can be ordered through www.flightglobal.com by clicking on “products.” Contact [email protected] to order your copy. Now in its eight year, it is well established as the industry’s leading benchmark study into the world of IT. The research provides a detailed snapshot of where the airline industry stands in embracing new technology, gives trends on where investments are being made, and pointers on future developments and challenges.
About SITA
SITA is the world's leading service provider of IT business solutions and communications services to the air transport industry. SITA manages complex communication solutions for its air transport, government and GDS customers over the world’s most extensive communication network, complemented by consultancy in the design, deployment and integration of communication services. Its extensive range of airline and airport applications and services includes airport operations and integrated baggage services, common use and desktop services, flight operations and air-to-ground communications and end-to-end airline distribution and fares services.
SITA has two main subsidiaries: OnAir, which is leading the race to bring in-flight mobile telephony to the market, and CHAMP Cargosystems, the world's only IT company solely dedicated to air cargo. SITA also operates two joint ventures providing services to the air transport community: Aviareto for aircraft asset management and CertiPath for secure electronic identity management and they sponsor the Internet's top level domain reserved exclusively for aviation - .aero.
SITA covers 220 countries and territories and the head office is in Geneva, Switzerland. SITA had aggregated revenues of US$ 1.554 billion in 2005 (€ 1.295 billion).
