What`s IT got to do with air travel?

Announcing the outcomes of the 10th airline IT trends survey, SITA chairman Paul Coby said airlines had been the first industry to fully automate all parts of their business, allowing the air transport industry to "become the world`s first truly web-enabled industry".

Speaking at SITA`s annual IT summit in Vlaamsbrabant near Brussels in Belgium, he said that with the price of oil at over $130 a barrel, there is now an even more urgent need to deploy IT.

Twenty four International Air Transport Association (IATA) member airlines have already collapsed this year at least partly because of the fuel price and many more are grounding aircraft and retrenching staff in a desperate attempt to stay in business.

"Among the record 121 airlines responding to this year`s survey, the online sales average is only 24% with their own website. This varies from 43% in North America to just under 10% in Africa and the Middle East," Coby said.

"A very important source of revenue is clearly being lost to those airlines not using web selling at a time when everyone in the industry needs to maximise returns on their IT-spend. Selling online has already massively helped to drive down distribution costs, saving airlines in the region of $2 billion."

WEB 2.0 GETS WINGS

Coby added that: "the adoption of the new generation Web 2.0 technology can deliver greater sales and greater savings across the industry, and better returns from the $11 billion invested annually."

SITA CEO Francesco Violante added that the price of fuel is providing the economic incentive for the airlines to tap further into ancillary revenues "by acting not as traditional airlines but e-commerce companies offering every type of service to their global consumer market of 2.3 billion passengers using state of the art technologies such as Web 2.0 and Travel 2.0 applications".

This, he says, can greatly help to withstand expected losses of more than $6 billion this year.

Examples of success include Ryanair of Ireland that now sells 98% of its tickets online and gains over 17% of its revenues online from ancillary sources while for many established airlines the figure is less than 5%.

Since the first Airline IT Trends survey in 1999, airlines have invested around $100 billion in IT and communications, Violante adds.

"As a percentage of revenue the average airline IT spend is now 2.2%. At the industry level, this equates to around $11 billion this year which represents an increase of 5% on last year. This increase is seen as recognition that IT plays a strategic role, generating revenue as well as helping deliver cost reductions and customer service improvements through self-service and smoother passenger management."

Research shows that the mobile phone will become an indispensable air travel tool within five years - and if used as a passenger tracking and messaging device, it could save cash-strapped airlines up to $600 million a year by reducing flight delays. SITA chief technology officer Jim Peters says new technologies such as near field communication and existing means such as Bluetooth also offer the possibility of further automating the airline - passenger interface by turning the mobile phone into an "e-wallet" as well as an identity management tool carrying an "e-boarding pass".

At current growth rates, there will be five billion mobile customers by 2011 and functionality on mobile devices will be increasingly sophisticated. For the air transport industry this opens the door to a new way of doing business as mobile phones are currently used by 90% of airline passengers.

AIRLINES PLAN TO GO GREEN

SITA has thrown its weight publicly behind the aviation industry`s green push. SITA CEO Francesco Violante signed the aviation industry`s Commitment to Action on Climate Change at SITA`s Annual IT Summit, and called for "a revolution in how the air transport community works in order to achieve carbon neutral growth".

International Air Transport Association CEo and director-general Giovanni Bisignani said his industry body`s goal was to keep the enormous economic benefits of aviation while eliminating the climate change impacts.

"IATA`s four pillar strategy - invest in technology, fly planes effectively, build efficient infrastructure and implement positive economic measures - is now an industry commitment. Technology is the first of the pillars. IT is critical to the further optimisation of fuel efficiency by improving air traffic management, flight turnaround times and route planning."

Violante said as a first step, SITA, which relies on massive data centres for its daily operations, will be reducing the numbers of servers it uses from 2 000 to 600, saving one megawatt of power annually, offsetting more than 33 million pounds of carbon dioxide over the next 30 years.

IATA CHIEF SLATES "GREEDY" VENDORS

INTERNATIONAL Air Transport Association (IATA) director-general and CEO Giovanni Bisignani has fired a broadside at airline ICT vendors, particularly those that provide ticket booking systems to the airline and travel industries.

Bisignani says the airlines have become hostages to an industry they created - the Global Distribution System that is used by IATA members and travel agents to book tickets.

"It`s no secret that airlines are held hostage to GDSes," says Bisignani. He said the airline industry had created the business and had then sold it in a moment of crisis years ago to gain revenue.

"We sold them and were quickly taken hostage. The GDSes took advantage of their position to charge enormous fees supported by government regulation," Bisignani charged. "Deregulation helped but even while airlines struggle for profitability, double digit margins are the norm."

The pugnacious IATA chief says the internet was a "golden opportunity for airlines" giving them direct contact with their customers and bypassing the GDS.