Airline CIOs have cause for optimism, says SITA
Recession, volcanic ash and industrial action: the airline industry has not had an easy ride of late - and IT is still feeling the pain.
According to new research by airline IT body SITA, tech budgets have not increased on last year, with both IT capex and opex as a percentage of revenues remaining static across the airline industry globally at 1.4 per cent and 1.8 per cent respectively.
"IT budgets are stabilising but with regional differences. Asia is leading the charge... Europe is still suffering the hangover accounted for by the last two years," a spokesman for the organisation told the Air Transport IT Summit in Brussels this week.
While 2009 may have been a historic low for the industry and 2010 not much better, the research found that CIOs in the industry have some cause for optimism - just over half (56 per cent) believe budgets will increase, while another 34 per cent predict they will stay the same. Just 10 per cent are forecasting a drop in tech spending.
IT budgets still have some way to go to reach their pre-recession glory days but some measures put in place to curb tech spending are beginning to be relaxed: 2009 saw 47 per cent of airlines putting a freeze on IT hiring, while just 23 per cent say they are doing the same this year.
While "IT is viewed primarily as a way to reduce the cost of business operations", according to SITA's spokesman, there is something of a "shift to more long term strategic spending patterns".
Consequently, virtualisation is growing in popularity in the air travel industry - 40 per cent of airlines questioned said they have already virtualised some of their infrastructure, while 85 per cent plan to do so by 2013.
However, IT chiefs are wary of giving away control of their IT estate, with 73 per cent saying they prefer to use infrastructure as a service from within a private cloud, rather than using third party services.
Self-service technologies too are also in the ascendancy for many airlines, thanks to the opportunities they present to cut carriers' costs.
The report found that airlines are hoping to cut the number of people checked in by agents from more than 50 per cent this year, to just under 30 per cent by 2013, with internet and mobile check-in likely to take up the slack.
Web check-in is expected to grow from 22 per cent to 36 per cent over the same period, while mobile check-in is predicted to see an even greater leap - from just over two per cent to just over 12 per cent.
The airlines are also planning to increase the travel functionality available to passengers over their mobile phones - 80 per cent of airlines plan to offer online check-in via mobile by 2013, while 76 per cent say they will send electronic boarding passes to mobiles.
The mobile is also in the ascendancy as a sales tool - 68 per cent said that by 2013 they will be targeting travellers with offers using their mobiles.
However, for all the airlines' focus on new channels for sales and marketing, there is something of a lukewarm reception for social media - just 27 per cent of airlines say they have integrated it with their websites.