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| Evolution of the plane ticket |
March 14, 2006 |
By Ian Harvey
Business travellers are familiar with the scenario: the mad dash to the airport toting luggage, a laptop, a PDA and a paperback.
However, strike plane tickets from that list. Those old multi-part red carbon printed tickets have all but gone the way of hot meals and free in-flight beverages. And while new e-tickets are more convenient for travellers, the real story is about the billions the airline industry will save.
Anthony Concil is the director of corporate communications at the International Airline Travel Association (IATA) headquartered in Montréal. The group, both an industry association and a ticket-clearing company, used to process 300 million paper tickets each year. Today, more than 80 per cent of those tickets are handled electronically.
According to Concil, processing a paper ticket costs about $10; e-tickets drop this fee to $1. Globally, IATA estimates that price difference will deliver approximately US$3 billion in annual savings if the industry reaches its target of eliminating paper tickets by 2007.
And the technology story goes further: the industry also wants to implement Radio Frequency Identification ( RFID) tagging of baggage, universal ticketing kiosks in airports and two-dimensional bar coding for boarding passes. All told, the industry expects to save US$6.5 billion, an important figure, Concil said, because “last year the combined industry losses for carriers was US$6 billion.”
It’s why carriers have jumped on the e-ticketing bandwagon with such gusto, and why Air Canada, for example, was so quick to impose a financial penalty for those who insist on receiving traditional printed tickets.
Implementing e-tickets
E-ticketing is a fairly simple process, although getting a system up and running can be a nightmare. Instead of issuing tickets as proof of payment, passenger flight information and payment records are simply stored on the carriers’ servers. This is true whether a flight is booked directly by the traveller or through a travel agent.
Customers get a confirmation e-mail which they can print themselves or use for self-serve entry at an airport kiosk. Travellers can also simply present themselves at the check in counter where an agent accesses their stored information.
The issue, until recently, was getting individual software platforms—many of them legacy systems used by airlines, airports and travel agents—to work together. At the same time, system designers had to ensure this widely accessible process remained secure.
Concil said the systems integration discussion started in the 1990s, and the first step was convincing airlines to discard proprietary strategies in favour of a co-operative venture.
The various entities did see the wisdom of this approach and the result has been dramatic changes in the way travel details are processed. “Rand McNally—the atlas people—used to print tickets and it was an enormous business for them, but it’s gone, they’ve shut down the warehouse and the printing part went bankrupt,” Concil said. “You can even say e-ticketing is saving trees because we just don’t need that paper anymore.”
Allan Mutén of Airlines Reporting Corp. (ARC) said his company processed 166 million transactions worth US$70.5 billion on behalf of 144 carriers last year. Of those, nearly 90 per cent were e-tickets.
On to freight
The last vestiges of resistance surround multi-carrier trips—in which a passenger books a single trip using different airlines—because not all systems are completely compatible. However, that barrier, too, is crumbling, Concil said.
But the e-ticket concept has proved so successful IATA wants to create a similar process for freight, although that may take some time. “We’re dealing with customs regulations and governments, and they don’t change quickly,” Concil said.
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