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8/12/2019 Airline IT Trends 2012 Executive Summary[1]
1/12
The Airline ITTrends Survey
Executive summary
2012A joint Airline Business and SITA survey
The Airline ITTrends Survey
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Foreword
Francesco Violante
Chief Executive OfficerSITA
Max Kingsley-Jones
EditorAirline Business
The Airline IT Trends Survey, co-sponsored by Airline Businessand SITA, is now well
established as the leading global benchmarking survey for the airline industry. Now in its 14th
year, the 2012 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.
There were mixed results for airlines over the past year, with some markets and sectors
remaining robust while others struggled. High fuel prices and an uncertain economic outlook
are keeping the pressure firmly on airlines, particularly in Europe.
Against this backdrop, the survey shows cautious optimism on the level of IT investment. IT
spend as a proportion of revenue is expected to stay stable in 2012, and only half the
respondents expect IT spend in 2013 to increase in absolute terms.
Airlines are clear on the increasing importance of mobile phones to communicate with
passengers and enable them to purchase tickets and ancillary services, track baggage, and a
number of other functions. Mobile devices and social media are seen as key enablers in
airlines drive towards greater personalisation of service.
The Airline IT Trends Survey provides a valuable insight into industry strategic thinking on IT
and we appreciate it is only possible through your continuing support. We thank all those who
participated in this years survey and hope you will continue to support it in the years to come.
We welcome any feedback or comments on the survey. For more information on our previous
surveys and our sister survey on airport IT Trends, together with all our accompanying
features and analysis, visit the Airline BusinessIT zone atflightglobal.com/ITzone
8/12/2019 Airline IT Trends 2012 Executive Summary[1]
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expect IT spending
to increase by 2013
Global economic pressures are evident in the airlines spending
outlook for 2012 and beyond.
For 2012, the Airline IT Trends Survey shows continued, but
cautious, optimism, with stable operational IT&T spend (as % of
revenue) compared to last year.
Airlines are more guarded about their outlook for 2013, taking
into account a significant economic downside risk. Almost half of
the airlines surveyed are still expecting their absolute IT spend to
rise. However, the percentage of airlines anticipating growth in IT
spending has decreased over the last three years.
Management and Strategic Issues
49%
Operational IT&T spend as
% of revenue
Change in available absolute
IT spending
*Compared to the previous year
201320122011
The Same DecreaseIncrease
66%
51%49%
11%
23% 22%
26%
21%
29%
2012 (planned)2011 (actual)
1.65%1.57%
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56%of airlines to makeR&D investmentsin passenger
services via social
media
The top three investment priorities remain unchanged in
2012. The focus continues to be on investments that improve
customer service and support revenue opportunities.
Reducing cost of business operations is also still a top priority,
recognising the value of technology in improving operational
efficiency.
For a second consecutive year, mobile services for
passengers tops the list of investment programs for airlines,
with six out of ten planning major investments in the next three
years. Upgrades to airline core passenger management and
customer relationship systems also draws significant
investment for the same time period. Passenger services via
social media begins to feature on the agenda this year, with
almost 60% of airlines making R&D investments.
Priorities in the IT investment
decision - investment driversIT&T investment programmes
in the next three years
No plansR&D/pilotMajor programme
Passenger services
via social media
Expansion of ancillary
services
Business Intelligence
solutions
Improve customer
relationship management
e.g. service personalisation
Upgrade core passenger
management system
Passenger services
via mobile device
55%
58%
52%
35%
44%
22%
35%
28%
56%
38%
23%
6%
20%
9%
18%
55% 33% 12%
Enabling
new market/
revenue
opportunity
Reducing
the cost of
business
operations
Customer
service/passenger
experience
50%
56%
42%
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Airlines are continuing to expand their ticket distribution through
direct channels. Emerging sales channels such as mobile and
social media will have a significant impact on future growth in
direct sales.
In the past, selling on an airlines website has been crucial to
driving the transition to direct distribution. Although sales through
airline websites will continue to see growth, selling via smart
phones is set to become an almost equally important sales
channel in the future.
In addition, airlines continue to look for alternative ways to
increase control over their direct distribution channels. By 2015,
64% of this years respondents plan to have direct connections to
third party travel agents.
Travel Distribution
Dominant channels for direct
sales beyond 2015
70%believe that smart
phones will be one
of the top two
dominant sales
channels
Direct connection with selected
travel agents (excl. GDS)
Kiosk
Social media
Agent/staf
Smart phone app
Website
70%
86%
21%
6%
13%
34%
30%
36%
No plansBy end of 2015Currently
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of airlines plan to sell
via mobile phones by
201590%
Nine out of ten airlines are planning to sell tickets via mobile
phones by 2015, establishing mobile as a mainstream
distribution channel for airline tickets. Growing from zero just a
few years ago, mobile phones as a distribution channel are
expected to generate significant growth in years to come.
The survey also shows a significant increase in the number of
ancillary services airlines plan to sell via mobile phones in the
future. 83% of airlines have the ambition to sell ancillary service
on smart phones by 2015. The list of services sold on mobile
phones will replicate the airlines website sales functionality.
Sales via mobile phone Ancillary services strategy
through direct channels
No plansBy end of 2015Currently
Lounge access
Retail services
(e.g. in-flight,
merchandising)
Baggage fees
Ticket upgrades
On-board services
(seat allocation,
meals, etc)
Ticket modifications
Airline tickets
27%
51%
13%
11%
55%
39%
61%
35%
36%
18%
21%57%22%
23% 56% 21%
10%
26%
53%
60%
No plansBy end of 2015Currently
Airline - social media
Airline - kiosk
Airline - mobile app/web
Airline direct website
15%
71%
23%
57%
22%
42%
28%
8%
35%
26% 57% 17%
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believe that smart
phones will be one of
two dominant
channels for
passenger processing
71%The survey respondents believe that beyond 2015, websites
and mobile phones will be the two dominant channels for
processing passengers.
Kiosks will continue to play a significant role, with of
airlines increasing the number of check-in kiosks. When it
comes to new functionality, however, opinions are split. About
half of the respondents do not plan to deploy kiosks for flight
transfer or lost baggage reporting. Only 39% of airlines believe
kiosks will remain one of the dominant channels to process
passengers in the future, highlighting that mobile phones and
websites are set to play a more important role for passenger
operations in the long-term.
Passenger Operations
Dominant channels for passengerprocessing beyond 2015
Emerging kiosk functionality
Social media
Agent/Staf
Kiosk
Website
Smart phone 71%
39%
13%
3%
71%
Flight
transfer
Lost
baggage
Bag-tag
printing
66%
37%
5%
No plans
SameIncrease
46%
48%
10%
53%10%
24%
Decrease
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of airlines believe
social media
provides the greatest
value as a marketing
channel
57%
Nine out of ten airlines plan to engage with passengers
through mobiles by 2015, and the adoption of new services
provided on mobile phones is speeding up. Airlines believe that
smart phones can support most, if not all, customer facing
interactions including customer service, commerce, in-flight
entertainment and passenger processing.
Social media will feature most strongly in promoting services
and supporting customer service according to the survey
respondents. 57% of airlines believe social media will play a
more significant role in the communication and marketing of
service offers, while fewer airlines see its role in passenger
processing (13%) or travel searching (19%).
Plans for mobile service Plans for social media
integration
Passengerprocessing
Salestransactions
Travel planning
Customer servicecommunication
Communication& marketing of
service oers57%
39%
19%
19%
13%
High value
23%
24% 27%
No plans
By end of 2015
In evaluation
Implemented
Utilise NFC technology
for passsenger processing
Access to entertainmenton-board on passengers
own device
Re-booking from
irregular operations
Missing baggage
communication
Notication about
ight status
Send mobile boarding
passes to mobile phones
Check-in 50% 22%
27%
21%
43%
18%
25%
23%
33%
24%
31%
49%
10%
46% 23% 15% 15%
10% 25% 43% 22%
32% 17% 43%
10%
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Personalisation & Business Intelligence
already, or plan to,
personalise service
offers to their
passengers
78%Almost eight out of ten airlines already, or plan to,
personalise communication and service offers to their
passengers. The current focus is personalisation via the direct
distribution channels. Websites, smart phones and social
media provide great potential for more personalisation in travel.
The richness of data from these channels gives significant
opportunities to tailor messages to the specific passengers
needs.
Service personalisation as well as efficient operation,
depends on the availability and analysis of data. The sharing of
data between stakeholders becomes essential. In recognition of
this dependency, around half of the airlines already share or
planning to share data with third parties.
Plans to provide Personalisation
by 2015
Attitude to share data for
better business intelligence
Indirect channelsDirect channels
78%
47%
Government
organisation
Airport
operators
Ground
service
providers
In-house
25%30%
78%
28%
23%
By end of 2015Curently
25%
49%
28%
30%
34%
19%
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The statements below have been selected as they reflect issues or projects frequentlymentioned by all respondents in this years survey. Please note that these statements are
directly taken from the survey responses and reflect the opinions/wording of our respondents.
Within your airline what do you consider were the major IT successes of the last 12 months?
l Reducing costs, ancillary services, mobile services
l Crew rescheduling system delivery. E-ticketing database migration. Departure control
system migration
l Implemented new MRO, flight operation, customer service and e-commerce all together
l Baggage reconciliation system; mobile boarding pass; simplified interline settlement
l Data collection and integrity
Within your airline what do you consider were the major IT failures of the last 12 months?
l Using a consulting firm to effect an IT transformation programme
l Lack of integration/coordination across silos
l Adapting to social media challenges and opportunities
l Securing adequate skilled staff. Improving IT staff remuneration. Procrastination in
evaluation of business systems
l It has taken longer to scale up the IT organisation and to refresh/renew the skill base in line
with what is needed for the future
What do you see as the biggest future IT challenges facing your airline?
l Integration and business intelligence; resourcing and skills; managing a range of vendors in
general cloud/outsource space
l IT transformation programme (reduce IT costs while not decreasing the value of delivered
services)
l Too many projects with limited specified field knowledge and resource of project team staff
l Consumerisation of corporate IT
l Data warehouse, revamp of e-commerce, enterprise resource planning and more
Verbatim Responses
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The survey was first launched in 1999 and comparisons are made where appropriate withprevious surveys, although the 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 2012.
The survey objectives are to monitor key IT trends within the airline industry including:
l Management/Strategic Issues
l Travel Distribution
l Passenger Operations
l Infrastructure
l Successes & Challenges
A comprehensive 100+ page PDF report is available to purchase, this will include commentary &
analysis covering all of the following survey questions:
l Priorities for investment decisions
l Key technology investment trends and areas in the next three years
l Long-term strategy for implementing virtualisation technology
l Strategy for selling products/services via passengers mobile phones
l Strategy for the integration of social networks
l Evolution of self-service technology (including via passengers mobile phones)
Methodology & Further Analysis
8/12/2019 Airline IT Trends 2012 Executive Summary[1]
12/12
www.sita.aero
www.flightglobal.com/airlines