How airlines are thinking about technology investment in 2024

Airlines, both low-cost and full-service carriers, are expecting to invest more in technology in 2024, according to a new report.

The Travel Technology Investment Trends 2024 report from Amadeus revealed 64% are expecting to spend more, with 46% of low-cost carriers (LCC) anticipating a moderate increase and 54% of full-service carriers (FSC) expecting the same.

FSCs listed modernizing their approach to network management, improving the passenger experience at the airport and delivering an outstanding travel experience across the entire journey as the top three investment priorities.

Low-cost carriers, meanwhile, also said the passenger experience at the airport was a priority followed by the travel experience, modernizing the approach to revenue management and improving the effectiveness of interline relationships, which all had equal importance.

When it came to the main drivers for investment, LCCs listed innovation, margin improvement and revenue increase as their main objectives, while FSCs also said innovation, followed by sustainability and margin improvement.

During a recent interview with PhocusWire, Southwest Airlines chief information officer Lauren Woods shared how her company approaches plans for an announced $1.7 billion technology investment and the need to have a business case for every element.

LCCs also said cloud, digitalization and digital payments were the technologies that would have the most impact in the next 12 months with FSCs adding cybersecurity and generative artificial intelligence.

A recent study from aviation technology specialist SITA found that 78% of airline chief information officers said technology investment would increase in 2024. The SITA Air Transport Insights 2023 study flagged business intelligence and artificial intelligence as priorities for investment with 73% and 64% of airlines planning significant investment in the two areas, respectively.

The Amadeus study also delved into investment trends for online travel agencies and found that 86% are planning moderate investment in 2024. However, OTAs in the United States and Asia are planning "aggressive investment" at 29% and 28%, respectively.

The key drivers for their investment were revealed as improving the user experience, 59%, innovation, 58%, and sustainability, 57%.

OTAs highlighted data analytics, machine learning and generative AI as the technologies that would have the most impact in the next months. Looking farther out, OTAs said they are experimenting with conversational search, with most planning to implement the technology within five years. The online players also said machine learning, generative AI and self-service capabilities would have the most impact in five years.