Heavy losses deterring airlines from investing in IT: Report


New Delhi : Investment in information technology (IT) by airlines the worldover this year is likely to be the lowest since 2002, says SITA, an air transport communication provider.

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The 2009 Airline IT Trends Survey report by SITA and Airline Business magazine released Wednesday in Cannes, France, has forecast that spend on IT and telecommunications is likely to be just 1.7 percent of airline revenue.

“The survey found that many airlines are in survival mode. Most airlines have already put in place measures such as rationalisation of IT suppliers, IT infrastructure consolidation, reduced head count and outsourcing,” says the survey.

According to British Airways chairman Paul Coby, the drop in IT investment by the industry globally would primarily be on account of an expected revenue shortfall of $80 billion.

“We are living in the most challenging times any of us have seen in the air transport industry. We should not be surprised that when survival is the issue for many carriers, that all but the most essential of IT investments has been put on the back-burner,” Coby said while releasing the survey report.

“But it is important to recognise that IT is also part of the solution to our challenges. If used well and effectively, IT will cut costs and protect revenues,” he added.

“The airline industry understands the importance of technology for the future, and what we are seeing here is the immediate and necessary response to the global recession,” Coby said.

The industry totted up losses of $10.4 billion last year, and according to the International Air Transport Association (IATA), this year it would be around $9 billion.

Of this, air travellers in Asia-Pacific account for a third, with Indian carriers being the worst-hit.

According to the survey, airlines worldwide are prioritizing their investment such as Web 2.0 service, IP telephony, data security and biometrics.