03 July 2009

Airlines slash IT investment

CANNES - Airline investment in IT will slump to unprecedented low levels this year as the industry struggles to cope with huge losses.

Figures released at the SITA Air Transport IT Summit indicate that operational spend for IT and telecommunications will be 1.7 per cent of airline revenue ââ¬' the lowest since 2002.

According to a survey, which polled 200 IT decision-makers in the sector, airlines are in ââ¬Åâœsurvival modeââ¬~, with 72 percent of firms looking to renegotiate vendor contracts and 70 percent investing in IT that helps bring down operating costs.

ââ¬ÅâœThe drop in IT investment by airlines is a direct response to the $80bn in revenue that is expected to disappear this year due to falling passenger demand in our industry,ââ¬~ said Paul Coby, SITA chairman and British Airways chief information officer.

ââ¬ÅâœFor the first time in several years, there will be a year-on-year decline in IT spend. The focus everywhere is on doing even more with even less,ââ¬~ said Coby
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ââ¬ÅâœWe 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.

ââ¬ÅâœBut it is important to recognise that IT is also part of the solution to our challenges. Used well and effectively IT will cut costs and protect revenues,ââ¬~ he said.

"Every airline IT department in the world is contributing to the fight for survival not just with cost saving systems and automation such as online check-in and selling, but they themselves are saving costs,ââ¬~ he said.

Source: Computing

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• You bloody geniuses!
  
  

  Well done BA accounting. Cutting commissions is really working for you isn't it. Bottom line brainiacs - if a suitable carrier is flying alongside you (as they do) and paying 5 7 or 9 % comission, who do you think will be offered? 1% internal Europe sold in Australia? Blow it out your ear - 5% on LH. The fact is Ba cannot provide the staff to service the system they have built and will not pay Agents to to the job for them. You are in coffin corner BA - now is the time to switch back on the lights for Agents and we may well be able to get you out of the stall. We do not blindly follow, but with incentive may deem you worth rescuing. If not we will submerge and sail away from potential survivors. Best all Ron

  By Ron Knight, Saturday, July 4, 2009