The use of check-in kiosks, the internet and mobile telephones, as well as older technologies such as barcodes,are gaining widespread adoption across the industry, according to the 2007 Airline IT Trends Survey
Not for the first time in the history of the Airline Business/SITA IT Trends Survey, yesterday's leading edge technology is fast becoming today's industry standard. This is best demonstrated by web check-in. The number of airlines that have already adopted this technology has risen from 43% last year to 53% (see chart 2). What is more impressive, perhaps, is that a further 36% of the airline industry expects to adopt web check-in over the next two years.
Paul Coby, SITA chairman and chief information officer at British Airways, says this is something that has really caught the public's imagination. "We know from BA that people love it - it is a bit of technology that delivers the full self-service promise."
Web sales now account for 35% of all ticket sales (see chart 6), and barriers to wider internet use appear to be diminishing, even in the developing world. "The main criterion for all this is internet penetration, but this issue is fading away fast," says Phillippe der Arslanian, global director at Amadeus e-travel. "It takes just one low-cost carrier in your market for suddenly everyone to go on to the internet."
This point is emphasised by Asmaa Fenniri, web sales manager at Royal Air Maroc: "We need to compete with low-cost carriers in their ground of predilection - the internet." The Moroccan carrier aims to be selling 20% of its tickets over the internet by the end of the decade, a target that has already been upped from 10% since the beginning of the year due to the growth in web sales. In 2006, Royal Air Maroc sold just 4% of tickets over the internet.
The survey suggests call centres now account for just 13% of bookings on a passenger weighted basis, down from 19% last year. And carriers are making inroads in terms of shifting frequent flyer redemption queries on to the internet. Finnair, for instance, now carries out 50% of its redemption online. "As a result we have also improved response time at call centres, which can serve priority and complex bookings," says Timir Bhose, Finnair director of e-commerce. "Customer feedback has been positive."
Going mobile
Mobile telephones are becoming more widely used, and their use is increasing at the fastest rate of all IT initiatives. Some 76% of airlines expect to offer mobile telephone check-in over the next two years. And with IATA looking into the possibility of developing industry standards for mobile telephone boarding, it is clear the technology will play a key role in the future.
Coby says a number of the issues that have dogged wider acceptance of mobile telephone technology, such as reliability, are no longer quite so pressing. He also points out that more people have access to mobile telephones than personal computers - estimates show that saturation coverage of PCs in Scandinavia is around 60%, compared with more than 95% for mobile telephones. "It is the device that will reach the absolute majority of people. Generally, when people are on the way to the airport, the way to contact them is by phone," he says.
These fast-moving changes present challenges to airlines, which cannot afford to fall behind. "Agility is the name of the game," says Coby. "That's what chief executives require of their chief information officers - they need people to move quickly. The problem is not how you do it, but whether you do it."
Kiosk challenges
Kiosks are perhaps a good example of the challenges faced by CIOs trying to read this fast-changing environment. Coby says the experience at BA is that web check-in has effectively cannibalised kiosk traffic, but that kiosks are now used by people to bypass check-in queues. "Kiosks are probably an interim technology," he predicts.
Their medium-term future seems secure, however. While 29% of passengers are currently using self-service kiosks, this is expected to jump to half of all passengers by the end of 2008 (see chart 3). In North America, 58% of passengers are already using kiosks and this is expected to rise to 73% next year. In contrast, the Middle East and Africa, at 10%, and Latin America, at 7%, have a low rate of kiosk penetration - but they are catching up fast. The survey shows that the adoption of this technology could triple by 2008.
The issue of dedicated versus common user (CUSS) kiosks refuses to go away. The split is 77% dedicated and 23% CUSS, although there will be a slight move towards CUSS going forward. Airports prefer CUSS systems, seeing them as more efficient in terms of space, while airlines tend to prefer their own systems.
"Usage will peak, but I don't see them disappearing altogether," says Ian Tunnacliffe, principal analyst at Travel Technology Research. "The cost advantage of check-in at home is huge, but a certain proportion of passengers won't be able to do that, and the kiosk is better than the human."
Another technology rapidly becoming standard practice is barcoded boarding passes. This is being used by 46% of airlines, rising to 88% by 2008 (see chart 4). "That's incredible," says Coby. "The interesting thing is that barcodes are not new technology, but they have been successfully blended with leading edge web technology. Why does it work? A combination of simplicity and resilience in a really tough operating environment." He says BA has tested barcodes with "rough" pieces of paper - and they still work.
RFID continues to be something for future consideration, and the survey suggests that this technology could start to make an impact in two to three years (see chart 4). There are still barriers to overcome to win wider acceptance, however. Just over half of airlines say they will "never" use or "don't know" if they will use RFID, compared with 37% last year.
Coby says that RFID may have a role, but the first priority is to identify the problems that need to be solved. The technology to trace lost baggage already exists, he says. "What you need to look at is the baggage process. If it improves the process, big tick. But you have to be clear about it. It will have a role to play. But don't start at RFID, start with the processes."
The rise of e-tickets
On average, 72% of tickets issued are e-tickets, up from 60% last year (see chart 6). This is predicted to hit 86% by the end of 2009. Of course, IATA will stop supporting paper tickets by the end of next May, but it should be noted that these figures are not directly comparable with the IATA figures, which measure only e-tickets sold through its billing and settlement plan.
Internet access is the most popular on-board passenger communication system for airlines (see chart 1). This has been deployed by 7% of carriers and is expected to rise rapidly to 41% by the end of 2008. E-mail is second, SMS third and mobile telephony fourth. Roughly half of the industry has yet to make up its mind, however.
"The feeling around the industry is that technical and regulatory issues will be solved," says Coby. "Then it's a question of what people want. Different airlines, chief executives and marketing people have different views. Some ideas will take off and some won't."
In the meantime, the impressive rate at which the industry has been adopting new technology is showing little sign of letting up. One development that is creating interest is a web development technique called Ajax (asynchronous JavaScript and XML) that promises to make the web 10 times faster than it is today, banishing the need to refresh web pages after changes have been made, and creating opportunities in terms of functionality, interactivity and usability.
Abu Dhabi-based Etihad Airways has used Ajax technology to introduce a slider that allows frequent flyers to use a combination of cash and frequent flyer points for a ticket. The increased speed promises significant benefits, says Denis Lacroix, director of product development sales and e-commerce platforms at Amadeus: "Speed brings stickiness and stickiness brings money."
Source: Flight Daily News
