Back to Air Transport IT Review - Issue 2, August 2008

Strong results backed by future investment

Results for 2007 show SITA earned consolidated revenues of over US$ 1.4 billion, with more than US$ 1 billion in new business achieved, for the second consecutive year.

Francesco Violante, SITA’s CEO, said: “We signed more than 3,000 contracts in 2007. This has enabled the company to maintain particularly strong revenue growth on the applications side of the business.”

The company is investing for future growth – notably through the creation of a world¬class R&D facility, the SITA Lab – and continues to play an important role in the successful development of two joint ventures, OnAir and CHAMP Cargosystems.

IT to the rescue

Reaping the full benefits of the Internet for cost reductions and ancillary revenues can play a vital role in compensating for fuel costs

Speaking at the Air Transport IT Summit in Brussels, SITA Chairman Paul Coby said: “IT enabled airlines to make both major savings and improve customer service after 9/11. But there is now an even more urgent need to deploy technology to serve airline customers, save costs and equip airline staff with effective technology.

“For example, of the respondents to this year’s Airline IT Trends Survey, only 24 percent are generating online sales through their own website. A very important source of revenue is being lost to airlines not using Web selling at a time when everyone in the industry needs to maximize returns on their IT spend. Selling online has already saved airlines some US$ 2 billion."

Francesco Violante, SITA CEO, highlighted the “real incentive for airlines to explore every opportunity for generation of ancillary revenues. By acting as e¬commerce companies, rather than as traditional airlines, they can significantly broaden their services – using state of the art technologies such as Web 2.0 and Travel 2.0 applications."

He cited the example of Ryanair, which now sells 98 percent of tickets online and gains over 17 percent of revenues from ancillary sources. In contrast, for many established airlines, the figure is less than five percent.

Aviation action on climate change

SITA is the first IT provider to the air transport industry to throw its weight publicly behind the Aviation Industry Commitment to Action on Climate Change, launched earlier this year.

Signing the Commitment at the Air Transport IT Summit, CEO Francesco Violante called for a revolution across the air transport community, in order to achieve carbon neutral growth.

“Just as we made a great combined effort to become the first Web¬enabled global industry and to move towards eliminating paper for passengers and cargo, so the air transport community is coming together to have a meaningful impact on climate change,” he said.

“Governments, airlines, airports, air traffic management and IT providers must unite to make the quantum leap required for an immediate 12 percent reduction in carbon emissions, by eliminating airspace and airport inefficiencies".

“Smart investments in new aircraft and optimized route management will help achieve this realizable goal. Flight operations and better cooperation between all the stakeholders, through collaborative decision¬making systems, will be key to this effort.”

Four-pillar strategy

The Aviation Industry Commitment to Action on Climate Change was agreed in April 2008 at the 3rd Aviation and Environment Summit.

SITA has declared its own intention of delivering IT services that are ‘green by design’. This includes a 70 percent reduction in the number of servers the organization uses – from 2,000 to 600. This will save one megawatt of power a year, offsetting 15m kg of carbon dioxide over the next 30 years.

See www.environment.aero

Air Transport IT Summit: common issues and challenges for CIOs

In this edition of Air Transport IT Review we deal with several topics covered at our highly successful Air Transport IT Summit 2008, held in Brussels in June. Our objective for the annual Summit is to hold the leading IT event for the air transport industry, providing a platform for thought provoking sessions to address the current and emerging challenges facing our industry – from an IT perspective.

We certainly achieved what we set out to do, with a strong line up of speakers and an audience of around 240 CIOs and other senior managers from a cross¬section of airlines, airports and related sectors

We were delighted to have IATA’s Director General and CEO, Giovanni Bisignani, as our keynote speaker this year. Against the background of alarming oil price rises and the global credit crunch, he painted a realistic picture of the challenges facing all of us in the air transport industry.

He emphasized that CIOs and IT departments “will be stretched as never before to direct effective cost reduction and identify new revenue opportunities,” and that IT capabilities could be critical to survival.

The point was picked up by Paul Coby, SITA Chair and British Airways CIO, who underlined the importance of IT in driving business change, as well as CEO of Malaysia Airlines, Idris Jala, who outlined the crucial role of IT in the airline’s Business Turnaround Plan.

Facing common issues

Judging from my discussions with customers, they are aware of the increasingly critical role of IT in helping to deal with the new challenges facing our community. But as I said at our IT Summit, it also takes community action – collaboration across the industry – to get the best results from IT.

We all face common industry issues and overcoming them will demand teamwork, better technology, innovation and the sharing of information. Only then can we capitalize on the opportunities promised by evolving technology, such as collaborative decision making tools.

This year’s Air Transport IT Summit clearly provided an opportune moment to underline the importance of IT to our industry, and the need to embrace it most effectively on an industry¬wide basis. I look forward to charting our progress as an industry at next year’s IT Summit.

Francesco Violante SITA Chief Executive Officer

For information on the Summit agenda, speakers and presentations go to www.sita.aero/summit2008.

Charting two digital decades

This year’s Air Transport IT Summit in June marked the occasion of the 10th anniversary of the Airline IT Trends Survey, conducted by SITA and Airline Business.

The Survey has recorded huge changes during what SITA CEO Francesco Violante – in his speech at the IT Summit – referred to as a ‘digital decade’ for the air transport industry. The speech cited the impact of the Internet, the industry’s simplification effort and the revolutionary rise of e¬commerce.

Looking ahead, what about the next digital decade? Mobile and wireless technology, Web 2.0 and Travel 2.0 are going to have a huge impact over the next ten years of the IT surveys.

Zero IT downtime

As more IT is placed in the airline and airport environment, reliability will be critical. A 24x7 passenger¬connected industry demands around¬the¬clock service availability, which in turn means ‘Zero IT downtime’.

For the full speech see the News Centre at www.sita.aero.

Strong results backed by future investment