21 June 2006 - Leaders at the International Air Transport Association are convinced the airline industry can achieve global e-ticket ubiquity despite formidable challenges and a looming deadline. For all affected parties--from airlines and airports to travelers and travel agencies--the prizes are sizable cost reductions and numerous direct and ancillary conveniences.
After emerging in the mid-1990s, electronic tickets (ET) now account for about half of all tickets issued worldwide, according to IATA. In the United States and parts of Europe, they are now the norm, especially for business travelers. And they will become the standard everywhere else by 1 Jan 2008, IATA members insist, or non-compliant airlines would lose access to IATA's 60,000 accredited travel agencies.
Such consequences could complicate global corporate travel, especially for companies with far-flung offices served only by regional or local airlines (if not corporate jets). But even many larger intercontinental carriers can't yet offer global e-ticketing to corporate clients. As a result, multinational corporate travel departments and their travel management company partners must maintain paper processes, slowing the migration toward automation in reservations, quality control, back office, accounting and expense reporting systems.
Once fully realized, universal ET would eliminate costs for ticket printing, delivery and security. It would lower overall fulfillment costs and reduce required travel agency resources. It would provide those agencies "greater opportunities to manage the corporate travel experience by being able to make changes to the actual ticket whilst the customer is on the telephone," IATA said.
E-tickets also empower travelers by facilitating Internet-based and other self-service options, including unassisted reservations, last-minute and en route itinerary changes, and check-in online or at airport kiosks. Airlines, of course, also would become more efficient through streamlined reservations process and improved sales data tracking, among many other benefits. All told, carriers stand to save roughly $9 per ticket, or $3 billion annually, according to IATA estimates.
"We are firmly of the view that in the next 18 months, if airlines want to makes this happen, they will make this happen," said Bryan Wilson, IATA's e-ticket project director.
To do so, they must resolve discrepancies in internal and external reservations, ground handling and departure control systems. And they must establish interline agreements with other airlines, overcome cultural divides and work through regulatory restrictions. For some airlines, ET simply is not a priority, due either to incompatible business plans or unstable finances.
By region, the Middle East has the lowest ET penetration (7 percent in April), followed by North Asia (31 percent), according to IATA figures. The Americas region (69 percent) has progressed farthest, with Europe next (64 percent). Many North American, Western and Northern European, and South American countries already are well beyond the 48 percent global average. Several major business destinations still lag, however, including Japan (40 percent), India (19 percent), United Arab Emirates (14 percent), Indonesia (10 percent), Malaysia (8 percent) and Saudi Arabia (0 percent).
Wilson is particularly encouraged by progress in China (29 percent), but sees ongoing challenges in the Middle East and especially Russia. Even so, more carriers are beginning to issue their first e-tickets through bank settlement plans. This year, Turkish, Pakistan, Cyprus Airways, Dragonair, Sri Lankan Airlines joined the list. Notable holdouts include Malaysian Airlines, EgyptAir, Garuda, Avianca and Saudi Arabian.
Wilson said those carriers are among "a group of airlines running their own systems" but added that all but one [bankrupt Olympic Airways] "have told us of plans to move forward with ET." Meanwhile, new interline agreements materialize all the time. Last week, Japan Airlines and Air France, for example, announced an ET interlining agreement for codeshare flights, the sixth for JAL. Air France has more than a dozen.
To get involved, airlines must work closely with and pass acceptance tests administered by global distribution systems (GDS), which routinely tout their ET integration capabilities. Sabre, for example, said 80 percent of all tickets issued through its GDS are now electronic, including 122 ET-enabled airlines, 57 of which use Sabre's e-ticket hub. Almost a dozen more are expected to participate by year-end, including Gulf Air. "It's highly unlikely that the IATA 2007 deadline for the complete withdrawal of paper ticketing will be met entirely," said Nejib Ben-Khedher, president and managing partner for the aviation consulting practice at Sabre Airline Solutions. But, he added, the latest figures "show an unstoppable momentum and indicate that carriers that sell most of the world's airline tickets will be compliant by the due date."
Travel agencies, too, must follow GDS and interline standards set by IATA and the Air Transport Association in the United States. "Part of the reason we've broken through the 80 percent barrier is because our agency customers have seized on the e-ticketing capability of every new airline we've implemented," said Dean Bibb, Sabre Travel Network European vice president of supplier relations and joint ventures. In other cases, travel agencies can make use of dedicated Internet portals on carrier Web sites.
Using these solutions, airlines, agencies and GDSs gradually are advancing toward IATA's goal. Wilson reiterated the 31 Dec 2007 deadline, when IATA plans to stop distributing paper tickets. "We are at the very critical stage now," he said. "It is about commitment and getting on with it. The industry can get there and will get there."
