Airline wallets may see more IT spends

BRUSSELS, BELGIUM: Globally, 56 per cent of the 129 responding airlines expect an increase in IT spend next year with only 10 per cent 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.

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.

The charge for increased spending is being led by the Asian carriers; 75 per cent 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 per cent of revenue while capital spend is 1.4 per cent, meaning no major change from last year.

A significant number of small carriers were among the 45 per cent who reported an increase in their IT budgets this year compared to last year. At the same time, about 50 per cent 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 per cent of airlines have already created a virtual infrastructure environment and this is expected to rise to 85 per cent by 2013. Software and desktop virtualization 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 per cent classified as low cost carriers; 81 per cent full service carriers; and five per cent charter carriers.