Airline IT Trends Survey Shows Industry is on the Road to Recovery

A record number of airlines, carrying over one billion passengers annually, took part in this year’s 12th annual SITA/airline business airline IT trends survey which strongly supports growing optimism that the worst may be over for an industry which sustained record losses over the last two years.

Globally, 56% of the 129 responding airlines expect an increase in IT spend next year with only 10% expecting a decrease in 2011. However, the numbers of airlines stating an expected IT budget increase in highly developed markets such as Europe and North America are below the global averages.

The charge for increased spending is being led by the Asian carriers; 75% of the responding carriers in this region are confident that IT spending will increase further next year.

After year on year declines, overall airline IT budgets in 2010 have stabilised, even showing a slight increase. The operating spend this year is an average 1.8% of revenue while capital spend is 1.4%, meaning no major change from last year.

A significant number of small carriers were among the 45% who reported an increase in their IT budgets this year compared to last year. At the same time, about 50% of the airlines who stated budget decreases this year were European airlines.

Launching the 2010 Airline IT Trends today, Paul Coby, chair of the board, SITA, said, “The stabilizing budgets and increasing business confidence translates into a change in spending behaviour for airlines away from short-term tactical remedies needed in 2009 and a return towards long-term strategic thinking.

After the last two incredibly difficult years there is an emphasis still on accelerating IT projects which promise an early return on investment. The majority of airlines also want to extend their partnerships with strategic IT suppliers like SITA and IT outsourcing is a major element in this.

The survey confirms a strong ambition among airlines to implement virtualisation technologies, with the initial priority on the IT infrastructure; 40% of airlines have already created a virtual infrastructure environment and this is expected to rise to 85% by 2013. Software and desktop virtualisation are the next steps in this transition.

The Airline IT Trends Survey is an independent poll of senior IT personnel working within the top 200 passenger carriers; 129 airlines responded to this year’s survey, including 14% classified as low cost carriers; 81% full service carriers; and 5% charter carriers.

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