Airline industry in danger of travelling at two speeds


London (SITA) - The airline industry’s goal of sustainable profitability depends on speedy and universal adoption of information technology.

The results of SITA’s seventh annual Airline IT Trends survey, announced today, confirm there is a danger of a growing technology divide that threatens to split the airline industry into have and have-nots.

The pace-setting airlines are embracing new Internet Protocol (IP) and wireless-based technologies that underpin applications, such as e-ticketing and self-service kiosks. But the survey also highlights that a significant minority of airlines are still lagging behind.

“There is the spectre of a two-speed industry, with weaker airlines losing competitive advantage because of a lack of technology investment,” Peter Buecking, SITA President, commented. Statistics from the survey demonstrate the pattern:

  • Over 25% of airlines do not expect to sell a majority of tickets over the Internet for five or more years
  • Only 68% of airlines expect to have more than half their ticket sales fulfilled as e-tickets by the end of 2007
  • At least 18% of airlines have no current plans to deploy self-service kiosks
  • Nearly 40% of airlines see implementation of bar-coded boarding passes more than three years away.

“Much of the disparity is regional. Outside Europe and North America, Internet and wireless technology is less pervasive and what is available is less robust. Inevitably this is slowing take-up rates at some airlines,”

Buecking explained at the launch of the survey. Financial conditions are also partly responsible. There are still airlines within both Europe and North America that are not keeping up with the technology leaders. Results from the survey show that over 20% of airlines from these regions will not have the majority of their systems IP-enabled by the end of 2007 – more than a decade after its introduction to the airline industry.

The implication is that these airlines will inevitably lose ground to innovative ones that have embraced new technologies. Bridging the inequality could prove challenging, but is absolutely necessary, says Buecking.

“An inclusive approach to airline technology is vital if the aviation industry as a whole is to achieve the high level of network efficiencies needed to achieve sustainable profitability. E-ticketing is a topical example: it would be a costly duplication if the industry had to retain technology to process both paper and electronic tickets,” said Buecking.

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