China’s top airports increase IT spend by 23%

Mainland China’s top airports expect their total IT spending to grow by 23% from 2012 to 2013, more than double the 11% rate of revenue growth rate for the same period. Investment is set to rise further in China with 80% of these airports expecting IT budgets to increase again next year as the country prepares to manage more than 870 million passengers by 2016.These are the results from tenth edition of the SITA/ACI/Airline Business Airport IT Trends Survey, which in 2013 includes responses representing the view of mainland China’s top 25 airports. Together these airports represent 66% of total passenger traffic in China, or 453 million passengers.

The analysis shows that self-service is in the early stage of adoption in mainland China. Only 8% of airports report that self-service kiosks are the primary check-in method. But by 2016 self-service technology will go mainstream. By then, 54% of airports expect that most passengers will use self-service kiosks for check-in area. More than 70% of airports plan to introduce new self-service initiatives for check-in areas including assisted bag drop and self-bag tag printing.

New passenger-facing information technologies will become an integral part of airports’ customer service strategies, which will increasingly integrate social media and mobile apps as well.

May Zhou, Vice President and General Manager, SITA China, said: “The main challenge for Chinese airports is to keep up with rapidly rising passenger numbers. By 2016, we can expect to see 200 million more passengers every year in China. That’s why airports are investing in technology to streamline their operations and improve the passenger experience. Information technology will play a key role in managing the country’s rapid growth in air travel, while ensuring passengers enjoy a seamless journey through its airports.”

SITA’s survey shows the importance of social media to airports in China. By 2016, more than 87% of the top 25 Chinese airports plan to use social media to provide flight status information. Already, Chinese airports are ahead of the rest of the world in this area: 42% have already implemented ‘notifications about airport status’ via social media, ahead of the global average of 29%.

Chinese airports recognize the importance mobile technology will have in the future and nearly four out of five expect that mobile will be the dominant channel for customer service communication by the end of 2016. Mobile apps will play a key role in passenger interaction, particularly to provide status information on flights and the airport, and for customer service.

Almost half (48%) of Chinese airports are investing in business intelligence solutions for airport operations, which transform data into useful and actionable information. However, airport stakeholders are not always willing to share data, and this may slow progress.

In 2013, the Chinese airports surveyed said they planned to increase their total IT expenditures to 5.85% of revenues, higher than the 5.43% of revenues for all airports globally. In 2012, Chinese airports spent 5.25% of revenues on IT, above the global IT spend of 4.9% of revenues.

These technology investments come at a time when well over half of all the Chinese airports surveyed are also refurbishing, extending or building new terminals in anticipation of future passenger growth. IATA estimates passenger traffic in China will grow to 873 million by 2016, up 29% from 679 million in 2012.