CEO’s Statement

Weathering the storm

For the world’s travel industry, 2020 was an extraordinary year, presenting unprecedented challenges to everyone, including SITA, our customers, and our members.

Not since the Second World War have we seen such a drastic fall in demand for air travel. SITA’s air traffic figures for the year record a drop in air traffic of around 50%. IATA figures reinforce this, citing a 60% decrease in passenger numbers.

In response, we worked closely with our airline, airport, and other customers to help them in their hour of need. At the same time, we relooked at SITA’s own business, introducing cost-saving programs and measures to limit our workforce costs, such as voluntary pay cuts, time off, a hiring freeze, and reducing our contingent workers across the world.

Thanks to our efforts, we weathered the storm. We contained our fall in revenue to -27% for the year, at US$ 1.34 billion, compared to the previous year’s US$ 1.8 billion.

In reacting quickly to the crisis, we decreased our cost base in 2020 by 18% versus prior year, while reducing external support by 50%. We achieved more than US$ 300 million in cost reductions, including US$ 52 million in procurement savings, through our EVOLVE transformation program with 360° initiatives on our workforce management, technical costs, asset management and living standards. Through strict cost controls and careful cash management, SITA also managed to limit impacts on its free cash flow for the year.

Our concerted efforts to reduce our cost base and restructure our business were major factors in mitigating the impacts of the pandemic on our organization, creating resilience for the future, while protecting our margin and our EBITDA figures.

Focusing on customer care and needs during the pandemic, we delivered around 85%of projects on time, many remotely, while in our Customer First Feedback survey we achieved over eight out of 10 for customer satisfaction in 2020.

Continuity for customers and the industry

Being at the heart of the air transport community, it is SITA’s responsibility to support industry operations everywhere. We made an immediate shift in our support of customers through the pandemic, to ensure business continuity and maintain normal levels of service.

Our teams quickly implemented remote 24/7 support. We helped with repatriation flights across the world, and, through collaboration, we remotely implemented CUTE, Maestro, Bag Message, and other solutions. Vitally, we made use of reliable and secure video conferencing services to keep in touch with customers.

We delivered 54 projects in the first three months of lockdown. Examples include the remote delivery for San Francisco Airport of our new cloud-based platform SITA Flex, and the accelerated delivery of increased bandwidth for one of our major European airline customers.

We delivered against an urgent border requirement for one large South American airport, to identify passengers who might pose health risks. And we enabled the immediate implementation of Manila International Airport’s Business Continuity Plan and rapid consolidation of terminals. There are many other examples during and since those early days of the virus.

Pivoting to meet new industry needs

With the dramatic shift in industry needs, SITA pivoted to meet increased demands for a healthy, safe, and frictionless passenger experience – to reassure passengers and enable ‘COVID-compliant’ journeys.

We responded to rapidly emerging requirements for agility, resilience, efficiencies, and cost containment, as our airline, airport, and other customers expressed urgent imperatives to achieve more with less.

Our collaborations with customers made clear the importance of accelerated digital transformation to meet these requirements – both during and after the pandemic.

For these reasons, we switched portfolio developments and innovations rapidly to areas vital to recovery and survival, which we communicated to customers through ‘SITA’s Runway for Future Operations’.

We modified or launched eight solutions in 2020 to support COVID requirements, providing the ability to create safe and touchless travel, and to introduce cost-efficient, flexible, cloud-based business models. We continue to invest in these areas.

Digitally transforming travel

Digitalization remains a SITA priority. For many years, we have worked collaboratively to digitalize air transport industry processes. In 2020, we invested further in platforms to enable new digital ways of working, including Software Defined Networking (SDN), Software-as-a-Service (SaaS), and our shared cloud platform, SITA Flex.

Launched in the year, our cloud-based platform brings cost-effectiveness and agility in responding to travel changes and volatility, while enabling ‘Your mobile is your remote control for travel’ scenarios. It makes it easy for airlines and airports to deliver digital journeys using mobile, self-service, and automated solutions – for identity, kiosks, bag drops, self-boarding gates, fast touchless bag-tagging, and more.

At the same time, we continue to invest in next-generation passenger processing at airports, including SITA Smart Path. Utilizing digital identity management, SITA’s Smart Path biometrics self-service solution delivers a near walk-through, touchless airport experience – where ‘Your face is your boarding pass’.

We strengthened our proposition to customers in 2020 through a partnership with NEC, the world-leading provider of highly accurate and fast biometric capture and matching software. See Innovation.

2020 threw a bright spotlight on the need for digitalization at the border. We now provide digital and automated border solutions to over 60 governments, for air, sea, and land. They enable pre-checking of passengers, making travel safer by keeping passengers moving, automating systems, and avoiding the need to touch airport equipment surfaces.

The year saw preparations for two announcements, that came in early 2021. First, the launch of Health Protect to support industry adoption of multiple health pass solutions. And second, SITA’s ability to facilitate implementation of new European Union Schengen Zone border controls for 2022 (the EU Entry-Exit System).

For SITA’s aircraft business, our ‘Digital Day of Operations’ portfolio evolved to include a partnership with Safety Line, focusing on safer, more economical, intelligent, fuel-saving, and flexible flight plans, through our eWAS Pilot and OptiCruise solutions. In our aim to realize a digital shift around the aircraft, we set out the direction for emerging from the pandemic in our paper ‘Powering post-COVID-19 recovery with the connected aircraft environment’.

Data everywhere

Digitalization and data go hand-in-hand. We cannot underestimate the importance to air travel of data, along with Application Programming Interfaces (APIs) to free up that data, making it instantly available, intelligent, and usable.

In airports around the world, for example, our airport management solutions depend on up-to-the-minute data to manage and monitor operations, keep airport stakeholders and workers instantly informed, ensure passenger flow and distancing, and perform data and predictive analytics.

Our API developer portal, developer.aero, remains a critical resource as we digitalize and mobile-enable our industry, from passenger travel planning and booking, to airport operations, baggage, boarding, aircraft connectivity, and more.

SITA is strongly positioned as the air transport industry’s data partner of choice, bridging as much as 60% of the air transport industry’s data exchange among airlines, airports, aircraft, and border agencies.

Proving our resilience

Our ability to pivot helped our resilience during the year. While we saw an impact on business, we continued to sign contracts with customers seeking to digitalize processes, create ‘COVID-compliant’ journeys, and improve business, operational, and cost efficiencies.

The contracts came from far and wide, including a touchless solution for Mumbai’s Chhatrapati Shivaji Maharaj International Airport; mobile passenger and baggage self-service for Lufthansa; airport collaborative decision-making (A-CDM) for the Greater Toronto Airport Authority; and mobile-controlled self-bag drop for Los Angeles Airport.

Our biggest SITA Smart Path achievement came with a deployment covering 600 biometric checkpoints – delivering a contactless environment for the second largest airport in the world, Beijing Capital International Airport. SITA works with airports right across the Asia-Pacific region, and we were delighted to receive the 2020 ‘Frost & Sullivan Excellence Award for APAC Airport Accomplishments’.

We continue to see a growing number of customers using Smart Path, ranging from trials and Proofs-of-Concept to full-scale implementations. They include Hamad International Airport, Istanbul Grand Airport, Orlando and Miami Airports, Athens International Airport, Bahrain International Airport, and others.

On the border front, we collaborated with governments to ensure the agility of their borders, while also offering our new health solutions. For example, we worked closely with the Australian Government, airlines, and airports to help implement strong border controls to minimize and manage the impacts of the pandemic nationally. This positions Australia well for the safe reopening of borders in the future.

So all in all, looking at our contracts and collaborations in 2020, we proved our resilience, limiting the pandemic’s impact on our ability to provide solutions relevant to immediate and future industry needs.

Looking forward: SITA’s transformation

Looking to SITA’s future, our EVOLVE transformation program is enabling us to achieve our strategic priorities, with multiple projects spanning our people, our portfolio, and our financial sustainability as an organization.

Priority number one is caring for our people. In 2020, we responded quickly to the pandemic, keeping employees safe through remote working and promoting well-being. Our efforts were appreciated, as SITA came 24th in the Forbes list of the world’s best multinational employers in 2020.

Our success depends on our people, and strengthening their capabilities drives our organizational transformation and culture. This is why, despite the virus, we made every effort during the year to develop, skill, and reskill our employees, building on targeted professions such as customer solutions, product management, technology management, and others. See Human Resources.

Another key priority is staying close to customers, as part of SITA’s role as a trusted partner to the air transport industry. This means constantly evaluating the relevance of our portfolio and innovations to meet urgent and future demands. We worked hard in this area during 2020, and it is a major ongoing initiative.

To meet customer needs, we must also be agile to achieve best-in-class delivery. Through 2020 we continued to build excellence in DevOps practices and integration services, for those particular instances where our standard products require customization for customers.

Caring for customers

As we build a sustainable SITA, we will become an increasingly lean and efficient organization. Our initiatives will minimize technical costs and optimize systems performance and availability for customers, with new and better ways to support customers through SITA Group Services (SGS).

This major undertaking is transforming the way SITA delivers its services. We made good progress through the year with our work to automate services, to enable better service and infrastructure management, along with enhanced monitoring, zero touch deployment and improved Airport Device Management.

We are optimizing local support, too, to deliver services more efficiently and ensure greater up-time for customers, and we are finalizing our Smart Infrastructure Management Program as we move our services to the cloud.

Preparing for the years ahead

Let me conclude by referring to three other initiatives in our EVOLVE transformation program – all of which will determine SITA’s long-term growth and success.

The first, SimplySITA, is a multi-year program to move SITA from its hybrid commercial-cooperative model to a fully commercial business. We accelerated our efforts in 2020 and continue to move quickly in 2021. SimplySITA will bring great agilities and efficiencies to SITA, as the Chair statement explains.

Second, SITA remains committed to creating a sustainable future for its employees, business, communities, and the air transport industry. That commitment includes our Planet+ ambition to be a certified carbon neutral company by 2022, as explained in our latest Corporate Social Responsibility (CSR) report.

And third, during 2020, we began evaluating the potential to provide our solutions and services in adjacent markets, such as railway and maritime. The travel industry faces many common requirements to improve passenger flow, manage disruption, and exploit operational and passenger data. We believe our air travel experience and portfolio may bring many benefits to the wider travel industry.

Thank you

I will finish by first thanking SITA’s staff and management teams for their commitment during 2020. In these extraordinary times, they should be proud of their efforts to simplify our organization, build a leading portfolio, and strengthen our relationships with customers.

And let me thank the SITA Board and Council for their support and guidance as we navigated the storm and continued to transform SITA. We have ambitions to grow SITA, enhance our EBITDA, and drive up revenues – with a rising proportion from new products and markets. We are reassured by the SITA’s Board and Council’s continued insights and expertise as we undertake this journey.

Finally, of course, I would like to thank our customers and members. As a part of the air transport industry, SITA works collaboratively with customers through good times and bad. We are grateful for your continued support and look forward to working together as we recover through 2021 and emerge into a new operating environment.