Sharp decline in new investment as airline losses mount: SITA

Airline investments in IT is set to reach a new low this year as aircraft operators cope with unprecedented financial losses, according to the 2009 Airline IT Trends Survey by SITA and Airline Business, which was launched at the annual SITA Air Transport IT Summit in Cannes.
IT and Telecommunications operating spend as a percentage of airline revenue is forecast to be just 1.7%, the lowest level recorded since 2002, as airlines seek to reduce costs against a backdrop of US$10.4 bn in losses last year and an IATA forecast of US$9 bn in losses this year Carriers in Asia-Pacific account for one-third of the losses and airlines in India account for most losses in the Asia-Pacific region.
With the minister of Civil Aviation Mr Praful Patel recently asking airlines not to go for "reckless" expansion and avoid financial misadventure in these testing times the reduction in airlines investment in IT is most likely to affect infrastructure up gradation, passenger experience and security in Indian air transport industry.
The survey found that many airlines are in survival mode; 72% of survey respondents intend to renegotiate IT supplier contracts and 70% will invest in solutions that lower overall enterprise costs. Most airlines have already put in place measures such as rationalisation of IT suppliers, IT infrastructure consolidation, reduced head count and outsourcing.
03/07/09 India Infoline

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Categories: Indian Aviation- In General Jul 2009