Airlines defy tough trading conditions by increasing IT investment
Written by James West
Embattled airlines believe that effective IT is the best antidote to weak spending and are investing rapidly on mobile and telecoms services to offset rising fuel costs and dwindling passenger numbers.
50 per cent of global carriers polled by SITA say they are increasing their IT budgets this year, with 32 per cent maintaining spending at current levels. Despite the ongoing uncertainty about the global economy, just 18 per cent of airlines are cutting IT budgets. 2012 promises to be brighter still, with 54 per cent of respondents expecting an increase in funding.
Passengers will benefit from improved mobile services, with 91 per cent of airlines pledging to enhance the experience for customers using smartphones and tablets. As mobile usage and usability improves, airlines expect to sell more tickets online and in the process, increase cross-selling of other products. Virtualisation technology will play an important role controlling costs for carriers with 93 per cent of IT leaders questioned stepping up their activity in this area.
Paul Coby, chairman of SITA, says the results confirm the importance of IT to the transport sector. "We are seeing airlines focus precious investment funds on the areas that really make a strategic difference - like IT. Airline IT departments are delivering major transformational initiatives using advanced applications for areas like revenue management and optimising load factors.”