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UAE | www.itp.net
November 07, 2006
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Ticketless travel |
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 The online revolution has become an inescapable part of life.
Today, we live in a technological age, where people can purchase groceries, cinema tickets and even vehicles at the click of a mouse, without leaving the comfort of their armchairs. In effect, the world is fast becoming paperless and the aviation industry cannot be left behind.
The ‘ticketless travel’ concept has become increasingly prominent throughout the world. By implementing e-tickets, travel agents can transmit ticketing information directly to the airline’s database, enabling passengers to board flights without paper tickets.
The concept makes travel more passenger-friendly, with a reduction in unnecessary paperwork and waiting times, enhanced service and extra data security. The benefits are also apparent for the aviation industry, increasing overall efficiencies at lower operational costs
Unfortunately, the Middle East recently had its wrists slapped by the International Air Travel Association (IATA) for lagging behind the rest of the world in e-ticket implementation.
Through its ‘Simplifying the Business’ programme, IATA is pushing for a greater understanding of ticketless travel and interlining, where passengers can complete the same journey using different carriers.
The strategy will save the industry US$6.5 billion through e-tickets, self-service check-ins, and radio frequency identification on luggage.
According to IATA, the airlines of the Middle East and North Africa are only issuing 16% of e-tickets, compared to 61% of airlines in other parts of the world. US carriers are heading the aviation industry, with 89% of airlines on track to meet the deadline at the end of 2007. Their European counterparts came a close second, notching up a 71% ‘readiness rating’.
North Asia, including China, is also successfully jumping onto the e-ticket bandwagon. The region made the greatest progress in the world during the last six months. In May last year, only 5.4% of North Asian airlines were on track, but the figures have jumped substantially since then, rising to 64%.
Addressing the recent International Civil Aviation Organisation (ICAO) Global Symposium on Air Transport Liberalisation at the Dubai World Trade Centre, IATA’s director general and chief executive, Giovanni Bisignani admitted concern over the progress of the Middle East, conceding that the region had made improvements in recent months, but this was “nowhere good enough”.
Bisignani feels the region needs to improve by 5% every month and said IATA will work with carriers to improve their progress rates.
“This is no time to sit and wait,” he warned delegates at the event. “The world is changing, and so must air transport.”
As project director for e-ticketing at IATA, Bryan Wilson must ensure airlines meet next year’s deadline. He suggests the Middle East might be lagging behind because of low-ticket volumes.
“It is finally starting to take off, but the Middle East is still far behind,” he says. “E-tickets have become the norm in most parts of the world, such as the US, Europe and North Asia, but one reason the MENA region has fallen behind is because
ticket volumes are lower. However, we are witnessing demand from the larger regional carriers and they are getting on with e-ticketing deadlines. I firmly believe every airline can reach the target.”
Saudi Arabian Airlines and Egypt Air have already acknowledged their confidence in meeting the ticketless deadline, according to Wilson. The two carriers had to implement system changes, but both of them are currently on track to issue e-tickets. In addition, Emirates, Royal Jordanian and Oman Air are progressing well, and Etihad is issuing e-tickets through its own distribution offices and began issuing them through its travel agency distribution channel last month.
However, the overall picture is not so bright. Wilson believes some airlines are clearly not interested in meeting the deadline, for example those using travel agencies as a distributor for a small proportion of their tickets. “Sales can
still be made, but the airlines will have to take on board the paper ticket and then queue at check-in,” he says.
“Consider the price of producing the ticket, it’s all very inconvenient and costly. Airlines should really be preparing themselves to meet the deadline.”
A significant portion of the aviation industry remains sceptical about airlines meeting the deadline by the third quarter of 2007. Edward Grauvogl, Oman Air’s division manager for commercial planning, maintains the region is currently hesitant. “There’s huge inertia in the Middle East not to change and the concept is not really valued by the customer,” he says.
Grauvogl also believes the local e-ticketing initiative is being blighted by the amount of labour traffic to India. “They don’t understand computers or e-ticketing and feel insecure about
using the Internet,” he adds. “They don’t understand ticketless travel. It’s a slow process to persuade unsophisticated customers.”
Sabre, the global distribution system (GDS) and IT solutions firm, has assisted many of the region’s airlines to meet the deadline, including Oman Air. Although progress is being made, the initiative has experienced some teething problems.
Grauvogl says the project ran into trouble because the revenue accounting processes needed re-engineering. Paper tickets and e-tickets use different data sources, which proved challenging for the airline, because the process needed to run seamlessly.
“We needed to build interlines with other airlines, but some of our potential partners have not started their e-ticketing programme yet, so we could not test our capabilities with theirs at the same time,” he explains. “However, we now have interline electronic ticket agreements with Gulf Air and Emirates.”
Grauvogl blames the lack of technology know-how, even amongst the various providers. “We had to wait weeks and even months for Sabre to answer our questions. This is not a criticism, just a reality. And this applies to other suppliers, because they just don’t have the resources,” he says. But Oman Air has moved with the times and remains on target to meet the deadline.
“We are probably spending more money than before, but that’s because when the sales guys are showing their applications, it all looks very slick. But once it’s all in place, there are huge efficiencies,” says Grauvogl, who is confident the cost savings, while initially not obvious, it will eventually come.
Ticketless travel was also flagged as a priority for Etihad, as part of the airline’s modernisation programme two years ago. Work on e-ticketing began in mid-February 2005 and the technical set-up was launched in January this year.
“We have been aggressive in prioritising our markets, but it’s not something we switched on overnight,” says Tehmton Cooper, Etihad’s e-commerce manager. “We tested e-tickets in each country and then we did a commercial rollout in July, flying out from Abu Dhabi to six cities. Any Etihad customer who booked tickets directly received e-tickets.”
In terms of interlining, the airline has agreements with a number of European carriers and plans to develop partnerships with the likes of Gulf Air, Emirates, Air Lanka and Silk Air soon.
“We need to cooperate with other airlines and ensure they are testing at the same time as us. We should have everything done by June or July next year,” maintains Cooper.
One of the major issues with interlining is revenue, which needs to be shared between the airline partners. This has created some complexity to the situation, because the data has to be separated and transferred to the revenue of each participating airline.
Matthias van Leeuwen, senior vice president of sales at Lufthansa Systems in the EMEA region, says: “It’s a major effort and challenge for the airlines. Some airlines have hundreds of agreements and these have to be tested. If they cannot synchronise the testing, then it’s not going to work.”
He suggests some of the bigger airlines might decide to reduce their interline agreements with the smaller carriers, but this would mean a loss of revenue, placing these smaller players at a disadvantage.
As such, it has become difficult for low cost carriers to match the spending power of a heavyweight like Emirates, which is spending a lot of money to be compliant with international standards. “I would suggest they select a partner or airline buddy to help offer solutions,” advises van Leeuwen.
IATA’s Wilson concedes that conducting business in the Middle East is actually more complex than elsewhere. Whilst it is hard to move away from the retention of paper tickets, he feels that once customers get used to the concept of e-tickets, they will start to see the time saving benefits.
Wilson accepts that the process of doing this is very complex and that more education is needed. For this reason, IATA provides workshops on e-ticketing and he advises that individual airlines devise its own campaign to change behaviour, such as by giving travel agents incentives to start issuing e-tickets and begin charging customers more for issuing paper tickets.
“I realise there is a lot of stress involved in getting there. We want to make it as efficient as possible. Airlines will save $3 billion. Different airlines will incur different costs and some will have to upgrade their GDSs and complete linkages with legacy systems. But the process of going ticketless is a cost that we have to bear for now.”
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