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Transportation: The Transportation Top 10 Trends

What Trends are affecting the Travel Industry in 2007

EDS Transportation Leader Jim Dullum focuses on the Top 10 Trends that are affecting Travel and Transportation Technology in 2007:

  1. Mergers and Industry Consolidation Continues
    The business landscape is changing as mergers and acquisitions continue across the entire transportation space including airlines, hotels, cruises and travel distribution companies.
  2. Big Growth from Small Companies
    The low cost carrier airline market is expected to continue rapid growth while the network carriers continue to struggle for market share. Low cost carriers are expected to acquire 35 percent of the market over the next four to five years.
  3. Cruising takes a front-row seat
    Cruise lines have ramped up, offering better routes, upgraded onboard IT and flexible services. The cost of cruising, however, has risen making this method of travel a very profitable area of transportation.
  4. Bankruptcies Continue
    We will see more bankruptcies, caused by high fuel prices, in the airlines sector. At $90 a barrel, the high price of oil will expedite the process for some carriers and others may never completely emerge from bankruptcy.
  5. Attracting the High-Mileage Flier
    Airlines are still trying the grab the high-mileage flier with special deals. Many have added 50K mile bonuses in the first quarter to attract this valuable prospect earlier in the year.
  6. Direct to Consumer Discounts
    Travel distribution companies are cranking up the competition, with deeper discounts, no service charges and GDS bypass.
  7. Outsourcing to Reduce Costs
    More and more travel companies are looking to reduce costs by outsourcing functions such as call centers, internal processes and IT shops.
  8. Open Skies and Airline Ownership Rights
    Europe is pressing for an Open Skies initiative that will allow U.S. carriers into EMEA airports and EMEA carriers into the U.S. airports. Additionally, the initiative requires ownership of U.S. carriers to open up to 50 percent plus from outside investors.
  9. Security – Less but More
    Background security is increasing. Security for positive identification, including biometrics, is moving forward, but no standard is in place. Nations are looking to airports like Schipol and Ben Gurion for the answers.
  10. Agile Transportation Companies, Now
    Companies want to reduce long-term legacy maintenance costs to allow greater investment in business initiatives. This goal is especially true for airlines, where maintenance costs are quickly approaching 85 percent.