Market Information

  • Every industry throughout the world is undergoing a digital transformation, and the travel industry is no exception. Airlines and rail operators are increasingly realising that incorporating the latest travel technology into their operations isn't just demanded by their passengers; it's expected.

    Below is a compilation of key statistics from several leading publications and analysts, each reiterating the importance and benefits that are gained from airlines and rail operators introducing passenger technology solutions into their service offerings.

    Simply click on each of the headings below that are of interest to you to unveil the latest facts and figures from that particular category.

  • Ancillary Revenue

    • In 2017, airlines were estimated to have earned $82.2bn globally from ancillaries - around 10.6% of global airline revenues.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their ancillary revenue expenditure, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

    • Big Data analysis can lift ancillary revenue by 5-10% by helping airlines to generate deeper insights into what customers want and can afford, facilitating better price differentiation and upselling strategies.
  • Artificial Intelligence (AI), Machine Learning (ML) & Robotics

    • Around 14% of airlines now use AI-powered chatbots. Early adopters include AeroMexico, Finnair, Singapore Airlines, Icelandair, Lufthansa and KLM. This percentage is expected to rise to 85% of airlines by 2021.

    • According to SITA, 32% of airlines are planning to implement major programs in AI by 2021, whilst 52% will run R&D programs in this field by 2021.
  • Augmented Reality (AR) & Virtual Reality (VR)

    • VR revenues will reach $7.17bn by the end of the year, rising to $75bn by 2021, with VR for travel expected to increase its market share considerably.

    • SITA's Air Transport IT Insights 2018 found that only 27% of airlines are planning to have major programs or R&D in VR by 2021, however.

    • 49% of airlines are planning investment in AR-enhanced interactive wayfinding and navigation solutions at airports by 2021.
  • Big Data

    • By the year 2020, with so many devices connected to the Internet of Things (IoT), it is estimated that the average person will generate 1.5GB worth of data per day.

    • In a recent survey conducted by Accenture, 61% of respondents from within the aviation industry highlighted Big Data analytics as their top priority relative to other priorities within their company. The remaining 49% listed it as within their top 3 or top 5 priorities.

    • This same survey revealed that 40% of respondents from within the rail industry viewed Big Data analytics as their company's top priority. 95% of respondents listed it as within their top 3 or top 5 priorities.

    • Big Data analysis can lift ancillary revenue by 5-10% by helping airlines to generate deeper insights into what customers want and can afford, facilitating better price differentiation and upselling strategies.

    • The 2018 IATA Global Passenger Survey results revealed that 66.8% of women and 72.4% of men felt comfortable sharing their personal information in order to speed things up at the airport.
  • Biometrics

    • 63% of airports and 43% of airlines are likely to launch biometric identity management solutions before 2020. Investment-wise, 77% of airports and 71% of airlines are planning major programs or R&D in this area by 2021.

    • Investment in passenger self-service, cyber security and cloud services is said to be at the top of the agenda for CIOs at both airlines and airports.

    • Whilst 41% of airports currently use biometric identity verification at self-service check-in kiosks, this percentage is expected to rise to 74% by the end of 2021.

    • The 2018 IATA Global Passenger Survey results revealed that 60.7% of women and 65.4% of men named biometric identification as their preferred travelling token.

    • 58% of airlines are expected to introduce self-boarding gates using biometrics with ID documentation by 2021, whilst 43% of airlines plan to introduce biometric only self-boarding gates within the same timeframe.
  • Blockchain-based technologies

    • Currently, only 1 in 10 airlines have a major program for blockchain initiatives, the same as in 2017.

    • However, 59% of airlines now have pilot or research programs planned around blockchain for implementation by 2021, which is up from 42% in 2017.

    • Similarly, 34% of airports are planning R&D projects around blockchain by 2021.

    • The most commonly expected use of blockchain for both airlines and airports is to streamline the passenger identification process, with 40% of airlines and 36% of airports saying this would be a major benefit.
  • Connectivity

    • With nearly every passenger using a smart device as an essential travel tool, the demand for more tech-enabled services from airlines and airports is on the rise.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Over 23,000 commercial aircraft will offer in-flight connectivity (IFC) to their passengers by 2027, up from 7,400 aircraft in 2017, whilst NSR's latest Aeronautical Satcom Markets report forecasts IFC will generate nearly US$37 billion by the end of that year.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their expenditure on ancillary revenue, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

    • Connecting onboard commercial aircraft systems to the internet, as well as making operations more efficient and customer-friendly, could save airlines up to $15 billion annually.
  • CRM Systems, Passenger Service Systems, and IROPs Solutions

    • According to SITA, 88% of airlines have plans to invest in self-service IROPS solutions at the airport by 2021. 68% of these will have a major program in place, whilst the remaining 20% are planning R&D in this area.

    • 63% of airlines have plans to invest in real-time wait monitoring systems by 2021, whilst 49% of airlines are planning investment in interactive wayfinding and navigation solutions at airports by 2021.
  • Cryptocurrency, E-Commerce & Payment Solutions

    • 4 out of 10 travel companies have trouble managing multiple payment service providers (PSPs), with a 5.4% share of global travel sales going towards paying PSPs. This equates to approximately $74.5bn spent by global travel operators upon PSPs per annum.

    • It is estimated that the airline industry spends over $7 billion per annum on payment transaction costs alone.

    • 95% of travel companies plan to offer new fintech innovations such as contactless payments, cryptocurrency and instant payment solutions to their customers in the next three years.

    • The primary reasons cited as drivers for payment innovation in the same study were customers' suggestions (91.0%), loss of customers (83.3%), employees' suggestions (69.2%), internal operational stress (62.8%) and competitors' innovation (47.4%).

    • A projected 28 billion mPOS transactions are expected to be made in 2018, rising to 87 billion annually by 2023.

    • 89% of travel companies believe enlisting third party help with payments innovation will increase their revenues due to increased customer choice.

    • It is estimated that payment fraud costs the aviation industry around $858 million per year, of which $639 million is borne by airlines.
  • Cybersecurity

    • Cyber criminals are increasingly targeting the travel & tourism markets, with 3.9 billion malicious login attempts being carried out in 2017 against websites belonging to airlines, rail operators, cruise lines, hotels, online travel, automotive rental and other transport organisations.

    • The 2018 IATA Global Passenger Survey results revealed that 66.8% of women and 72.4% of men felt comfortable sharing their personal information in order to speed things up at the airport.

    • According to SITA, passenger self-service, cyber security and cloud services are at the top of the agenda for CIOs at both airlines and airports. With regards to cyber security initiatives specifically, 96% of airports are planning major investment in this area before 2020.

    • The same survey showed that 89% of airlines are planning major programs in cyber security initiatives by 2021, up from 71% in 2017.

    • It is estimated that payment fraud costs the aviation industry around $858 million per year, of which $639 million is borne by airlines.
  • Internet of Things (IoT)

    • By the year 2020, with the number of devices connected to the Internet of Things (IoT) predicted to reach 28 billion, it is estimated that the average person will generate 1.5GB worth of data per day.

    • Whilst two thirds of airline leaders believe that the IoT offers clear benefits right now, and 86% expect to see identifiable benefits within 3 years, only 37% of airlines have begun to explore and implement IoT improvements as a way to confront rising costs.

    • Investment in passenger self-service, cyber security and cloud services is said to be at the top of the agenda for CIOs at both airlines and airports.

    • Connecting onboard commercial aircraft systems to the internet, as well as making operations more efficient and customer-friendly, could save airlines up to $15 billion annually.
  • Mobile & Apps

    • Digital travel sales are estimated to have topped $189.6bn in 2017, 40% of which was purchased via mobile.

    • One in three travellers now book via mobile, and it's predicted that 70% of all online travel agency bookings will be made on a mobile by 2020, as global smartphone ownership rises by 50% to 5.7bn.

    • The 2018 IATA Global Passenger Survey results revealed that 85% of travellers would like to receive flight notifications via their smart device.

    • According to a survey conducted by Google and PhocusWright, 45% of UK smartphone users and 48% of US smartphone users are comfortable researching, booking, and planning their entire trip to a new travel destination using only a mobile device.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Today, the vast majority of airlines provide check-in (73%), boarding (70%) and flight status notifications (68%) via mobile, and by 2020 more than 97% plan to do so. A key area of growth will be providing real-time flight updates over social media, which will jump from 31% of airlines doing so to 92% in the next three years.

    • Providing a seamless experience is key to airlines. In total, 94% rate streamlining services into a single app as a priority, with 58% rating this as a high priority, whilst 67% of passengers in the 2017 SITA passenger survey stated a preference for using their mobile devices to acquire this information.

    • SITA's Air Transport IT Insights 2018 research shows that around 92% of airlines either have or are planning major programs to provide passenger services through social-media integrated apps by 2021, up from 80% last year.

    • The same survey found that by 2021, mobile app check-in will overtake check-in desks as the most commonplace check-in method (29% compared to 27%).

    • According to the GSMA, 62% of airline passengers say digital boarding passes and e-tickets make travelling easier, whilst 46% say a good digital experience is important when choosing an airline.

    • The total number of sessions in travel apps increased by 55% between 2015 and 2017 in the US.

    • When 63 frequent flyers were asked to name the single most basic expectation that caused them the highest amount of frustration when absent, the fourth highest rated (~12%) grievance was a lack of app functionality.
  • Passenger Trends

    • The global travel industry's gross booking income reached $1.6 trillion in 2017, making it one of the fastest growing markets in the world.

    • Air passenger demand is increasing globally (3.8%) and is forecast to double to 8.2 billion per annum by 2037.

    • The Asia-Pacific region will contribute the most to international passenger traffic growth between the years of 2016 and 2040 at 38.8%.

    • China will be the fastest growing market in terms of annual additional passengers in 2036 compared to 2016, with a total of 1.5 billion passengers.

    • In 2017, at any one time there was 9,728 planes carrying 1,270,406 people in the sky.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • Millennials purchase travel approximately four times a year. That means that for most of the year, they are in a state of seeking inspiration or planning their next trip.

    • Gen Z, meanwhile, are estimated to be worth US$200 billion dollars to the travel & tourism industry by 2020.

    • Whilst 78% of leisure travellers don't know which airline they will use when considering a trip, 27% of passengers would choose to pay more to fly with an airline they believe offers a better passenger experience.

    • The latest global passenger survey from the International Air Transport Association (IATA) showed that just 52% of passengers in Europe are satisfied with their travel experience.

    • Digital travel spending will top €704bn globally by 2020.

    • More than 85% of travel consumers say that personalization has affected their travel purchase decisions.
  • RFID

    • IATA have estimated that 5.57 passengers out of every 1000 have their baggage mishandled. This used to be upwards of 18 in every 1000 prior to early RFID adoption.

    • Mishandled baggage costs airlines $2.3bn every year.

    • There is a 99.5% chance of your checked-in baggage arriving at the right place at the right time, but the remaining 0.5% equates to 22.7 million bags every year.

    • 70% of airports surveyed by IATA have an RFID plan in place, whilst all current IATA members have agreed to implement RFID baggage tagging by 2020.
  • WiFi

    • Over 23,000 commercial aircraft will offer in-flight connectivity (IFC) to their passengers by 2027, up from 7,400 aircraft in 2017, whilst NSR's latest Aeronautical Satcom Markets report forecasts IFC will generate nearly US$37 billion by the end of that year.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019 and 90% by the end of 2021. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their expenditure on ancillary revenue, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

  • Sources:

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    Barraclough, C. 2018. Travel Industry To Enter New Era Of Payment Innovation To Improve Customer Experience. [ONLINE] Available at https://procurementandsupply.com/2018/08/travel-industry-to-enter-new-era-of-payment-innovation-to-improve-customer-experience. [Accessed 1 August 2018].

    Becker, G., Bouwer, J., John, D. & Toutaoui, J. 2018. Walk before you fly — capturing the digital opportunity in airlines. [ONLINE] Available at https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/walk-before-you-fly-capturing-the-digital-opportunity-in-airlines. [Accessed 4 July 2018].

    Boutin, N., Jhunjhunwala, P., Guggenheim, J., Vicq, D. & Karimi, I. 2016. It's High Time Airlines Got Personal. [ONLINE] Available at https://www.bcg.com/en-ma/publications/2016/marketing-sales-technology-digital-its-high-times-airlines-got-personal.aspx. [Accessed 17 July 2018].

    CB Insights. 2018. What Is Edge Computing?. [ONLINE] Available at: https://www.cbinsights.com/research/what-is-edge-computing. [Accessed 9 August 2018].

    Coren, B. 2018. Talking Chatbots. [ONLINE] Available at: http://www.onboardhospitality.com/chatbots/. [Accessed 6 June 2018].

    Fernandez, K. 2018. Pack your Jetpack: The future of travel is here. [ONLINE] Available at: http://www.blackbook.net.in/pack-your-jetpack-the-future-of-travel-is-here/. [Accessed 6 June 2018].

    Garcia, M. 2018. Biometric Technology Is Taking Off As 77% Of Airports and 71% Of Airlines Review Digital ID Options. [ONLINE] Available at: https://www.forbes.com/sites/marisagarcia/2018/09/29/biometric-technology-is-taking-off-as-77-of-airports-and-71-of-airlines-review-digital-id-options. [Accessed 18 October 2018].

    Grous, A. 2017. LSE Sky High Economics. Chapter One: Quantifying the commercial opportunities of passenger connectivity for the global airline industry

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