CHAIR'S STATEMENT

The pandemic’s impact on the air transport industry

Never before have I witnessed the dramatic disruption that we saw in the air transport industry in 2020. As the virus struck, global air traffic fell by around 80% in April 2020, according to SITA figures. By year end, it had recovered to around 40%.

But as we produce this statement, our industry is looking at the green shoots of recovery. We expect to return to 2019 levels of air travel by 2023, as recovery becomes the focus of the entire industry. Technology is playing a critical part, and so is SITA.

The impact of the pandemic on SITA

SITA’s early and robust response to the pandemic was fully supported by the Board. To ensure close alignment and greater engagement with SITA’s management, the Board was quick to reorganize itself at the start of the crisis.

We met more frequently, adapting rapidly to the need for fully virtual meetings. We received regular updates on the financial health of SITA, as well as the physical health of SITA’s people, staying closely involved as the pandemic evolved.

The Board advised on and endorsed the necessary measures to react to fast-moving events, both within SITA’s organization and in response to addressing the pressing needs of its air transport community customers. Importantly during this time, it has also been vital for the SITA Board to support SITA in the continuing development of its Long-Term Business Strategy.

SITA pivoted well in 2020 and was swift in making organizational changes to adjust costs and priorities. At the same time, to help its customers, SITA prioritized portfolio developments, bringing forward solutions to meet the emerging industry requirements for health and safety, agility and cost-effectiveness.

Thanks to this, SITA offset lower levels of business. While revenues were, of course, adversely impacted in this extraordinary year, SITA managed to limit the effects of the virus on its performance. The CEO Report explains more.

But overall, in 2020 SITA proved its resilience and its relevance to the air transport industry. I commend the executive team, management and all SITA teams for their efforts.

SITA’s role in the recovery

SITA’s role in the recovery is extremely important. SITA gains unique insights into industry challenges and requirements, through its work with the SITA Board and Council.

From the outset, SITA understood that now, more than ever, our industry needs to achieve operational and business efficiencies, embracing new agile ways of working to help turn around profitability issues.

By quickly readjusting its priorities, SITA remained close to its customers and kept industry operations up and running. The Board wholly endorsed this as a priority, encouraged to see SITA reacting efficiently, with the ability to remotely support and implement urgent projects for its customers.

Looking ahead, the profound changes happening to the passenger journey and industry operations will be lasting. Vitally, our industry must work together to embrace these changes, driven by technology. SITA exists to support the air transport community in this drive. This includes the continued digital transformation of the industry. It is clear from the interactions between SITA and the Board and Council, that digitalization, as a top agenda item, has accelerated due to COVID-19.

But even well before the pandemic, SITA’s focus was to help our community digitalize operations, driven by mobile devices, biometrics and identity management. So as the pandemic hit, SITA was well placed to display strong industry leadership, and to meet the new demands of the air transport community.

About ‘SimplySITA’

SITA made excellent progress during the year with SimplySITA, which is a vital multi-year transformation program set in motion by the Board and Council in 2018 and approved by both bodies in 2020.

The SimplySITA program is reorganizing the SITA Group’s current legal structure. The aim is to simplify SITA’s structure and reinforce SITA’s position as a sustainable provider of connected IT products and services to the air transport industry, while meeting evolving market demands and the challenges of global compliance requirements.

The program is based on all SITA activities being run in a single, robust business structure that will allow SITA to embrace its full potential, with increased agility and efficiency. At the same time, SimplySITA enables SITA to continue to be wholly owned by the industry.

By removing the growing impediments of a hybrid structure, the common business structure is being put in place without causing change to ownership, governance, or pricing strategy. Furthermore, SITA NV will run networking and messaging on a new single platform.

The first steps of SimplySITA are in motion, laying the basic organizational foundation and legal framework required by the program. This includes preparing for the enlargement of the SITA NV/BV network and messaging footprint as a result of transferring assets from SITA SC over the course of 2021.

SITA’s long-term direction

SimplySITA is one of the initiatives under SITA’s EVOLVE transformation program, steering the long-term direction of the company and supporting SITA’s Long-Term Business Strategy.

These initiatives include efforts to help the industry return to the skies, to improve service levels and service automation, and to remain a trusted partner working closely with customers to meet their needs.

In a separate initiative in the latter part of 2020, the Board, together with the Council, initiated a joint review of SITA’s governance. The drivers for this review included a change in Belgian Corporate law that came into effect in 2020, along with ensuring that SITA is fit for purpose in the years ahead. In addition, five years had passed since the approval and implementation of recommendations coming from the last joint review.

Once fully considered and approved by the Board and Council, the recommendations and outcomes of the joint review will be reflected in amendments to SITA’s Articles of Association, which will be presented for approval at an Extraordinary General Assembly to be held before year-end 2021.

SITA also began evaluations of opportunities in adjacent markets. The Board endorses this early work. We recognize the potential to drive better passenger processing and operations across the global travel and transportation industry.

The Board believes that these transformational initiatives are vital to three fundamental goals of SITA’s Long-Term Business Strategy: to build a stronger, simpler and financially sustainable SITA for the years ahead.

Thank you

I would like to thank my fellow Board Directors, the Council and SITA’s senior team for their commitment, leadership and example during a year in which our industry faced its biggest ever challenge.