IT cos hope to ride out aviation turbulence

Indian IT firms say that despite turbulent times for the global aviation sector, their airline clients are only changing priorities on technology investments and are not cutting down on IT budgets.
This means that anything that improves efficiency is in. But investments in projects that require a high investment upfront or where there is no guarantee of immediate savings are out.
“Even though corporate earnings are under pressure, airlines will never curtail investments in technology projects as they are closely linked to safety, security and other operational aspects. If they do so, their airworthiness will be adversely impacted and it will send out the wrong message to customers,” said Mr Kapil Arora, Partner – Aviation Sector, Ernst & Young.
There is a parallel that industry watchers draw to the slowdown that happened in 2000.
Though airlines were affected by events following 9/11 and the dotcom meltdown, the average IT budget of these companies has always remained above 2 per cent (of individual company revenues), said Mr Reji George, Global Head, TTHL Practice of Hexaware Technologies. This year, IT budgets are expected to be in the range of 2 to 3 per cent at least till the end of this year, say analysts.
Indian IT firms provide services related to customer solutions (integrated IT and BPO), development and maintenance of reservation systems and airline cargo systems, and fares filing, among others.
04/08/08 Adith Charlie/Business Line

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Categories: Indian Aviation- In General Aug 2008