A partnership of ACI, Airline Business and SITA has been formed to produce the Airport IT Trends Survey, the first global research into the airport IT environment
Airports can be tough customers to benchmark. The sheer diversity of different business models and operating structures that exist around the world means that no two hubs are ever quite alike. Yet there is growing pressure across the air transport industry to lay down such performance markers and not least in the fast-flowing world of IT. That is why Airline Business has joined with the Airports Council International (ACI) and SITA to work towards an industry benchmark by which to measure the progress of the airport community in adapting to new technology.
The result is the Airport IT Trends Survey 2004, the first such global research into the airport IT environment. Similar IT benchmarking research is already well established in the airline sector and regular readers of this magazine will be familiar with the collaboration between Airline Business and SITA in conducting the annual airline IT survey, now in its sixth year. The airport study aims to extend the reach of this benchmarking effort across air transport as SITA president Peter Buecking acknowledges. "This survey brings together on a global basis some information that has not been available for study before," he says. "The two surveys paint a picture across the aviation IT landscape."
The broad picture painted by the Airport IT Trends Survey is of a sector that is investing heavily in new technology to create airport-wide systems. "As the survey shows, IT investment is set to take off," says Bob Aaronson, ACI director general.
The headline results were first unveiled in early May at the ACI ComputaPort conference and exhibition in Cannes, France, having been undertaken across the top 200 airport groups over the previous six months. The survey is based on responses from around a quarter of those groups, representing around 50% of revenues and 25% of passenger traffic at the major hub airports. The survey underlines the importance of IT as a strategic investment with over 60% reporting increased investment last year and a similar proportion expecting a further increase in the year ahead. Less than 10%are budgeting for a fall in IT spending this year.
Overall, airport groups are devoting more of their available budgets to spending on IT and telecommunications, running at slightly more than 4% of revenues compared with less than 3%in an airline industry under aggressive pressures to reduce costs. Based on an average, weighted by group revenues, that gives a headline estimate of an annual spend in the region of $2 billion for the major airport groups.
Yet despite the optimism, budget constraints remain high on the list of bug-bears for airport IT directors, just as they have over the years for their airline colleagues. Nearly half of airports in the survey cite lack of investment as the main obstacle to achieving IT strategy. Grumbles about lack of funding and support show through strongly in the verbatim remarks made about IT failures over the last year - a selection of which are run on the following page. The lack of budget is "one of the most striking similarities" between the airport and airline surveys, adds Buecking. Airport IT departments also share the frustration of their airline counterparts in a lack of support and vision at board level.
New security regulations are also having an impact, sucking up resources, particularly for airports in North America and Europe. Biometrics remains in its infancy for passenger identification, points out ACI technical director David Gamper, but close to a quarter of airports appear to be working on plans to implement systems based on fingerprint or iris recognition. Biometrics is, however, already in place at a quarter of airports for employees and that should double in two years. Some 10% of the survey also aim to be using radio frequency identification for baggage tracking by year-end. Equally significant, however, is that 40-50% have no immediate plans to bring in such new technology for passengers, cargo or baggage.
Planning horizons
The planning timeframe for airport IT strategy holds an interesting comparison with the airline experience. The survey shows that the average length for airport IT strategies is around four years, compared with three for airlines. Of course, airport development horizons are typically much longer than for airlines - measured in decades rather than years - although both have to adjust to the much shorter life cycles of the IT world.
The core IT infrastructure is the main investment priority this year, cited by more than two thirds as the main focus for spending. Perhaps not surprising that this was followed closely by spending on security-related solutions, with passenger and baggage processing systems also prominent.
Outsourcing appears to be running at around the 20%mark for lead functions such as IT support, check-in systems and baggage tracking, with plans that could bring that to around the 30%mark over the next couple of years. The most significant jump is expected to come in self-service check-in kiosks. At present few are outsourced but 19%say that they plan to do so.
That comes alongside strong growth in the deployment of kiosks. At present, the lead has been taken by units for dedicated use, but a surge in common-use kiosks is anticipated. The survey suggests that within two years, common use kiosks will have taken the lead, installed by over three quarters of airports.
There is good news on the switch to the new breed of open systems technology and airport-wide managed networks. Over 80%of airports have already brought in Internet Protocol (IP) systems and another 10%plan to join them soon. "This is a top priority for airports with over 90% implementing the best technology out there," notes Catherine Mayer, SITA's vice-president airport services. "It is also important to see over 80% moving in the direction of managed campus network services." She adds that the overall picture shows airports making a "tremendous effort on taking control of their infrastructure".
SITA argues that regardless of who provides the technology, airports should work towards true connectivity across the airport, rather than having information locked up in a series of discrete "silos". Its vision is for a platform of shared information that would be available to the entire community: airport; airlines, ground handlers, air traffic control and others.
Justifying investment
For many managers, the survey offers the first chance to judge their own strategy and priorities against a global average. Carl Deseure, commercial ICT manager at Brussels International Airport Company, comments that it marks a "good first step" towards benchmarking. "It provides a useful benchmark to take home to my management to help justify airport IT spend," adds Abdulrahman Mbamba, IT manager at Tanzania Airports Authority:
For SITA, the survey supports its view that IT is a central part of airport strategy, just as it has become for the airline industry. In fact many of the themes are common across both sectors and likely to converge further as they look towards new technology to improve service levels and efficiency.
"Both are moving down this track - it will help transform the entire customer experience, as well as the business model," says Buecking. What is unclear is the amount of co-ordination or co-operation between both sides. "What the industry needs to be seeking is convergence. We need to find the sweet spot in terms of opportunities for customer services and for the aviation business as a whole," he says. Setting down some clear benchmarks can only help.
REPORT BY MARK PILLING IN CANNES
| Full survey results The complete results of the Airport IT Trends Survey 2004 will shortly be made available on CD, priced $450, providing the responses to all of the survey questions together with a commentary. Although individual returns remain strictly confidential, some of the results are broken down by geography and airport size, also with results weighed by revenue. For further details please e-mail us at: airline.business@rbi.uk, or visit our website: www.airlinebusiness.com |
Source: Airline Business
