Cyber security and cloud services lead airline and airport USD33 billion annual investment

It is estimated that airlines and airports will spend nearly USD33 billion on IT this year, according to SITA’s 2017 edition of its Air Transport IT Trends Insights. The air transport communications and IT solutions specialist says they are focusing their technology investments on similar priorities… cyber security and cloud services. In addition, they are also prioritising investments in passenger self-service to enable travellers to take better control over their journeys.

Cyber-attacks are a very real threat in the highly interwoven air transport industry so building solid defences is becoming an essential investment. Cloud services provide important efficiencies which play a key role in keeping airline and airport costs down, while investments in self-service improve passenger satisfaction as they welcome the independence and efficiencies it delivers.

SITA’s research of the world’s airlines and airports has become established as a global benchmark for the air transport industry. It shows that IT spend remains strong. Airlines’ spend as a percentage of revenue will rise to an estimated 3.30% or USD24.3 billion in 2017. For airports, the rise is to an expected 5.05% for this year or USD8.43 billion. Looking ahead to 2018 over 70% of airlines and 88% of airports are expecting IT spend to increase or remain at the same levels as today, says SITA.

CHART – Operating spend on IT as a percentage of revenue increased slightly in 2016 and will remain similar in 2017Source: SITA

“The air transport industry is going through digital transformation and focusing its attention on protecting the business and passengers; making it more efficient; and improving the passenger experience,” says Ilya Gutlin, president, air travel solutions, SITA.

As IT spend increases, both airlines and airports agree that the number one priority for their investments is cyber security. Nearly all of them – 95% of airlines and 96% of airports – plan to invest in major programs or R&D on cyber security initiatives over the next three years. This shows alignment across the industry on the importance of investing in this area.

Cloud services are another top investment priority with 95% of airlines and 85% of airports planning to invest over the next three years, continuing an upward trend that SITA has recorded since 2015. The third key area of investment that was highlighted by both airlines and airports is to provide extra self-service options to passengers.

Airlines are focusing on providing mobile services. Today the vast majority of airlines provide check-in (73%), boarding (70%) and flight status notifications (68%) via mobile and by 2020 more than 97% plan to do so. A key area of growth will be providing real-time flight updates over social media which will jump from 31% of airlines doing so to 92% in the next three years.

CHART – There has been no noticeable decline in traditional desk check-in but airlines still expect self service to account for almost three quarters of check-ins by 2020Source: SITA

Providing a seamless experience is key to the airlines. In total, 94% rate streamlining services into a single app as a priority, with 58% rating this as a high priority. Mobile app capabilities and usability are developing quickly and an increasing number of airlines plan to use mobile as a customer service tool, including at times of disruption.

At airports, self-service processes at check-in, bag drop and boarding are increasingly popular with passengers and 89% of airports are investing in these processes. Airports operators have a keen focus on improving the journey through the terminal and are looking to new technologies such as the Internet of Things, beacons and sensors, to support their goals.

CHART – Connected aircraft to enable new era of on-board services by 2020Source: SITA

SITA’s insights show that 80% are investing, or planning to invest, in these technologies over the next three years. Nearly three quarters, 74%, are investing in way-finding solutions and 68% in solutions to improve personalisation for the passenger.

“When it comes to IT investment, airports and airlines are aligned to provide better, more secure service to customers,” adds Mr Gutlin. “The interdependencies built into air transport systems mean investments and improvements in all these areas, by airlines and airports alike, will continue to contribute to a strong global industry.”