Reduce costs by spending more on IT

SITA has issued some headline findings from a couple of its reports, angled around how the airline industry can use technology and IT to address the bottom-line impact of the hike in fuel prices.

The IT specialist claims that online booking has already saved the industry $2bn in distribution costs. And there’s more to come – from the 121 airlines in its sample, the average level of direct bookings is 24%.

But reducing costs remains the most common reason for investing in IT. Industry body IATA’s latest estimate for the aviation industry’s losses this year is $2.3bn. And IT accounts for an average of 2.2% of an airline’s revenues.

The increasing importance of mobile phones is highlighted in a separate paper. SITA says that ‘location sensing via mobile devices could save airlines up to $600 million by tracking passengers, sending messages and moving them to gates more efficiently; improving turnaround times and reducing delays.’

It also predicts an evolution of self-service to mobile devices. ‘Airlines are forecasting that while only 1% of passengers use mobile phones for check-in today, this will rise to 6% next year by which time more than half of airlines will offer the service.’

And 85% of the sample is now providing passenger data to the world’s governments. Last year it was only 4%.

Martin Cowen, chief writer, Travolution