Airline technology investments slumped in 2020

By
|

With little revenue coming in, airlines and airports were forced to slash technology budgets and refocus their priorities when the pandemic hit a year ago.

While figures from SITA revealed airlines and airports were on track to spend more than $61 billion in technology in 2019, last year told a very different story.

According to the SITA 2020 Air Transport IT Insights, planned IT investment from airlines decreased to $22 billion in 2020.

Although more than half of carriers say they planned to increase technology investment in 2020, the reality was that 91% spent less than the original amounts budgeted.

Unsurprisingly, it was a similar story for airports, where technology spend dipped to $3.5 billion in 2020 compared with almost $9 billion invested during the 12 months before.

Again, while 58% of airports said they planned to increase spend, 85% reported investment decreases because of the pandemic.

As a further reminder of just how dire the situation has been for the aviation industry, Heathrow Airport released its earnings this week, revealing a £2 billion loss for the year.

In addition, passenger numbers fell to levels not seen since the 1970s. 

Against this backdrop, technology chiefs have had to look at consider doing more with what they already have and reprioritize their spend.

The top investment priorities for airlines over the next two years are passenger services via mobile applications, cybersecurity and cloud services, according to SITA.

This compares to 2019’s priorities which were cloud, cybersecurity and business intelligence.

In addition, most carriers do not seem optimistic of an increase in IT spend in the near term, with 40% saying they expect a decrease, 29% say it will stay the same and 31% say it will increase. 

At a recent CAPA event, Johan Lundgren, CEO of EasyJet, highlighted how the pandemic had removed funds that had been desperately needed for technology innovation.

Airlines were also asked about their plans to invest in automation for passengers to create a touchless experience.

While 48% offered automated check-in in 2020, 70% say they plan to by 2023.

Self-boarding via automated boarding gates will also increase with 36% offering it in 2020 and 68% planning to offer it by 2023.

Biometric boost

Airlines also say they plan to double investment for self-boarding using biometrics with ID documentation with 82% planning to have them implemented in 2023 compared to 39% in 2020.

Boarding using biometric identification alone is also likely to take a big step forward with 57% of carriers saying they will implement by 2023 compared to 5% in 2020.

For airports the investment priorities have not changed with cybersecurity, cloud services and business intelligence still take the top three slots.

Airports are also focusing on self-service technology for passengers with 71% aiming to have automated border control in place by 2023 compared to 42% in 2020.

Meanwhile, more than 77% of airports plan to implement self-boarding gates by 2023 compared to 26% now.

These developments will be crucial going forward as airlines and airports move into recovery mode and mitigate the financial fallout of the pandemic as well as the new realities of travel. 

John Holland-Kaye, CEO of Heathrow Airport, highlighted the need for digital health passports this week saying the 20 minutes it was taking to process the paperwork for each passenger, would be impossible as numbers increase. 

If anything good has come out of the pandemic, the accelerated pace of digital development and the resulting boost to biometrics could bring a more seamless journey closer, faster.

Source: PhocusWire

Comments

From Our Partners


From Our Partners

Seabourn Updated Logo
Rediscovering Seabourn’s Extraordinary Worlds
Register Now
Hawaiian Airlines Airplane
Hawaiian Airlines
Read More
2021 Club Med Webinar
Club Med: Rebounding with Worldwide All-Inclusives
Register Now

JDS Travel News JDS Viewpoints JDS Africa/MI