2005 results of SITA - optimistic industry outlook
London (SITA) - SITA today reported aggregated revenues of $1.554 billion (€ 1.295bn) for the year 2005. The company is moving towards a consolidated organization, boosted by record volumes of new business over the last three years, combined with investment in ground-breaking ventures such as Aviareto, CHAMP Cargosystems, CertiPath and OnAir.
“Now like the air transport industry as a whole, we are growing healthily in terms of volume and looking for new ways to help our customers. SITA has come out of this challenging period in better business and financial shape and is now ready to lift its performance to the next level.
“In 2005, SITA did a good job supporting our air transport community. Both the applications services and the communications services businesses exceeded their new business targets by 30%. This has helped create a solid foundation for integration into a single SITA organization planned to start this July.
“This change, which is designed to deliver a clear shareholder strategy, a stronger position in the market place, a single integrated approach to the customer and a simple and cost effective governance, management and organization structure, will be subject to member approval at our Annual General Assembly in June.”
SITA INC, the applications services business, recorded revenues of $726 million, 13% above 2004 revenues of $642 million – four times the industry growth pattern. SITA INC achieved several breakthroughs in 2005, namely the incorporation of OnAir, the launch of CHAMP Cargosystems, and the $200 million outsourcing agreement with Düsseldorf airport.
Francesco Violante, MD of SITA INC and CEO designate of the new consolidated SITA organization, commented: “In 2005 we won new business to the value of $582 million which brings the Total Contract Value for new wins over the last three years to $1.386 billion, a clear vindication of our business strategy. We do expect that our investments in both OnAir and CHAMP Cargosystems will result in significant financial benefits for the company in the coming years.”
SITA INC performed particularly well in Europe where revenues were up 20% to $310 million. The Asia Pacific region last year saw many large airport deals for SITA in Bangkok, Kuala Lumpur and Beijing and revenue figures grew accordingly by 15% to $136 million. In the Middle East and Africa, revenues grew 16% to $148 million. Revenues in the Americas remained stable at $132 million.
SITA SC revenues were $828 million last year while at the same time the company continued to deliver communications cost savings to the industry of $111 million. Total cost savings to the industry over the last two years come to $230 million. The company also brought in $158 million of new business in 2005. Customer satisfaction ratings stood at a record 4.06 / 5, higher than our customers’ next best provider.
Hans-Peter Kohlhammer, CEO and Director General of SITA SC, said: “Customer satisfaction levels are high which gives us a solid foundation to develop our new higher value added services and firmly establish ourselves as the only communication services integrator dedicated to the industry. The ultimate gauge of success however, is customer retention, which stood at 91 percent at the end of 2005.”
Paul Coby said: “The management of Francesco Violante, Hans-Peter Kohlhammer and Peter Buecking as Group President, SITA has delivered an exceptional turn-round performance in the last three years. They have turned SITA from a disconnected set of legacy businesses and systems, into a growing business, focused tightly on the air transport industry, delivering massive savings to the community, and building value for customers and owners with new solutions and businesses, right across the whole industry.
“I look ahead with confidence to going forward, with a single SITA organization with Francesco Violante as CEO. With the support of our members, we will be well placed to further grow the value of SITA to its customers and owners.”
Paul Coby concluded: “The smart use of information and communications technologies drives simplification into the airline and airport business. Working with IATA we have supported the drive to a simpler business model. This increases operational flexibility and lowers costs, so helping to reduce our industry’s vulnerability to external shocks. Overall, this industry is in its best shape for some years. SITA is proud to have played its part, and this is reflected in SITA’s impressive achievements in 2005.”
Some highlights. In 2005 SITA ….
- Launched: CHAMP Cargosystems, a joint venture with Cargolux. CHAMP is the only IT company dedicated solely to air cargo which now has 60 airline customers.
- Launched: OnAir, a joint venture with Airbus, which has agreed trials with three airlines for the use of its in-flight mobile phone solution.
- Prepared for 2006 launch: Aviareto, allowing Aircraft financiers and lessors to register their financial interest in airframes, aircraft engines and helicopters providing them with lien security in the ratifying countries of the Cape Town Convention.
- Prepared for 2006 launch: CertiPath which leverages Public Key Infrastructure (PKI) to drive down the cost of establishing and maintaining secure relationships with global customers, partners and suppliers.
- Established partnership with Swissport, to deploy CUSS and web check-in and maintained a leading market share of airport common-use systems.
- Established partnership with INS, to provide a broad range of technology-based professional services, managed services, and network software solutions.
- Won ten-year, $200 million outsourcing contract with Düsseldorf Airport to look after all its IT needs, an industry first.
- Acquired SMG Technologies based in Vancouver, Canada, which is now part of SITA INC’s Passenger and Travel Solutions business unit. SMG has developed the most advanced airline fare management and pricing decision support system in the market.
- Signed an outsourcing contract with IATA, enabling them to centralize field operations and support for one of its business units through a flexible, cost efficient and fully managed Internet Protocol (IP)-based call center solution.
- Installed the Wi-Fi network in Hartsfield-Jackson, Atlanta International Airport, which allows unimpeded internet/mobile phone use.
- Implemented a secure Internet offload solution, which was deployed across 61 sites for our launch customer, freeing up network bandwidth for mission critical applications and extending network redundancy, providing a more cost effective network solution.
- Deployed Asia’s largest RFID project in Hong Kong airport, which is among 30 of the world’s leading airports using SITA’s baggage reconciliation systems.