Back to Air Transport IT Review - Issue 2, September 2009
Trends survey shows sharp investment decline
Airline investment in IT is set to reach a new low this year as aircraft operators cope with unprecedented financial losses, according to the 2009 Airline IT Trends Survey - co-sponsored by SITA and Airline Business.
IT and Telecommunications operating spend as a percentage of airline revenue is forecast to be just 1.7 percent. This is the lowest level recorded since 2002, as airlines seek to reduce costs against a backdrop of US$ 10.4 billion in losses last year and an IATA forecast of US$ 9 billion in losses this year.
To better manage costs, 72 percent of survey respondents intend to renegotiate IT supplier contracts and 70 percent will invest in solutions that lower overall enterprise costs. Most airlines have already put in place measures such as rationalization of IT suppliers, IT infrastructure consolidation, reduced head count and outsourcing.
Launching the survey, Paul Coby, SITA Chair and British Airways CIO, said: "The drop in IT investment by airlines is a direct response to the US$ 80 billion in revenue that is expected to disappear this year due to falling passenger demand in our industry.
"We are living in the most challenging times any of us have seen in the air transport industry. We should not be surprised that when survival is the issue for many carriers, all but the most essential of IT investments is put on the back-burner. This is an absolute necessity.
"But it is important to recognize that IT is also part of the solution to our challenges. Used well and effectively IT will cut costs and protect revenues. Airlines absolutely understand the importance of technology for the future."
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