Asian carriers underspending on information technology

PUBLISHED : Tuesday, 07 March, 2000, 12:00am
UPDATED : Tuesday, 07 March, 2000, 12:00am

Asian airlines have earmarked less cash for information technology development this year than rivals in North America and Europe, according to a survey of 150 carriers by Societe Internationale de Telecommunications Aeronautiques.

The survey found that Asian airlines planned to spend 1.7 per cent of their revenue on information technology products, compared with 4.2 per cent by their North American counterparts and 2.2 per cent by European carriers.

On-line sales and electronic-ticketing still account for only a minute percentage of Asian airlines' revenues.

United Airlines, the world's biggest carrier, conducted more than 59 per cent of its sales last year by electronic-ticketing. But Asia only accounted for a small proportion of e-ticketing sales, United general manager for Singapore Bill Byrne said.

Sources said Cathay Pacific had been investing heavily in moving their procurement operations on-line in an effort to cut costs and increase productivity.

Cathay has also been one of the most progressive airlines in the region in terms of expanding its Internet marketing network, which would enable it to reduce ticketing commissions and target specific customers directly.

But some analysts believe the savings would ultimately be passed back to consumers, and would not translate into higher profits.