Airlines on route to become the first totally web-enabled industry.
Aviation has the potential to become the world’s first totally Internet Protocol-enabled industry.
This one of the major findings of SITA’s eight Annual Airline IT Trends Survey. According to the report 82 percent of airline locations now have IP connectivity, anticipating a rise to 89 percent by the end of 2007 and a projection of 93 percent by the end of 2008.
It also states that 78 percent of airline systems are now IP-enabled or have the possibility to be. This is projected to reach 83 percent by the end of 2007 and 87 percent by the end of 2008.
The industry is embracing self-service technology and passengers are pleased to use it. Web check-in has now been implemented by 42 percent of airlines and this is projected to increase to 72 percent by the end of 2007, while 27 percent of passengers are now using check-in kiosks and this number is expected to rise to 38 percent by the end of 2007.
Francesco Violante, chief executive officer, SITA, said, “The speed at which the industry is moving towards a self-service passenger model is clearly borne out by the technology investment priorities of airlines. 80 percent of airlines responding to the survey see projects with proven payback and cost savings, such as on-line booking, bar coded boarding passes and self-service check-in as their highest priority, up from 50 percent last year.”
32 percent of tickets worldwide are currently sold on-line (compared to 20 percent in 2005) and 72 percent of these were sold through the airlines’ own web sites leaving room for improvement as airlines seek to eliminate commissions on ticket sales. Call centre ticket sales are falling in parallel.
The issues highlighted by the report still show there are great strides still to be made with regard to on-line sales. The complexity of airline fares, lack or low levels of payment gateway security and of course the old thorn in the side of interlining/ code-sharing, where airlines transfer passengers to other airlines or share the route with others. There has been considerable growth in airlines issuing e-tickets, but most of these are on a point to point basis rather than interlining.
Interestingly although the Airline and transportation industry as a whole is reputed to be very slow at accepting new technology, IP and its possibilities seem to have taken them on a fast roller-coaster ride to direct sell, distribution of content and inventory like nothing before.
The cargo side of the business has been slow to react even though they were first with such technology (as far back as 2000) and although they are now finally getting it together they have some way to go to catch-up the passenger side of the business. Perhaps if they think more on the benefits and less on the possibilities of a competitor finding out what they are charging they will be able to start to break-down the strangle hold the forwarders still have on the industry in much the same way as with the Travel Agencies 10 years ago.. In principle there is not reason why cargo tariffs and inventory cannot be distributed directly in much the same way as the complex pricing structures in passenger travel.
Airlines have realized the benefits in revenue growth, yields and cost outweigh any misconceptions they may have had in the reliability of such technology, which is fast becoming a necessary part of any strategy for the future.
Article written by Angelo Quinlan
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