Posts Tagged 'e-ticketing'

100% E-Ticketing = 96.5% E-Ticketing!

As AirlineWorld had reported earlier, IATA has extended the deadline for 100% Electronic Ticketing. Not so long ago IATA has also admitted (which they probably knew all along the road) that pure 100% Electronic Ticketing (ET) will never be reachable for the whole market. Here is a quote from IATA (Bryan Wilson, ET Project Director in an ATW Webinar):

“We now understand the real target is 96.5%” *

* for IATA BSP’s (central clearing house solution for travel agents and airlines in most of the major IATA markets around the globe)

96.5% non-paper ticketing

Now the question is this: Where is that remaining 3.5% and how come it will remain Paper Ticketing?

First of all, about 20% of interline journeys (itineraries that involve more than one airline) will remain paper ticket based due to the interline ET agreement not being in place between the two involved airlines (this accounts for 2.4% of the total), about 1% of tickets will be paper tickets as per the choice of the travel agents, and about 0.1% will be accounted for airlines who choose not to introduce electronic ticketing at all. IATA says, this “remaining 3.5% will be satisfied by other means.” This “other means” would actually mean other, non-ET solutions, such as an agent issuing a paper MPD (Multi-Purpose Document), which then later is turned into a ticket by the airline, or some of the airlines deploying their own paper ticket stocks at agencies, who then issue paper tickets for that particular airline. (At the moment IATA centrally deploys the airline independant paper ticket stocks to their registered travel agencies worldwide, so this responsibility would be moved from IATA to the airline that chose not to move to 100% ET, at their own expenses.)

96.5% of airlines involved 

IATA has classified each member airline to a group (that is differentiated by a color) based on their plans/state of ET readiness. Out of 348 IATA member airlines that used the IATA BSP in May 2007:

  • Platinum (100% ET): 9 airlines
  • Green (own ET and interline ET enabled): 156 airlines
  • Yellow (own ET in BSP only – at the moment): 62 airlines
  • Orange (having a plan for ET, including 1st date of ET in BSP): 85 airlines
  • Red (no plan for ET yet): 0 airlines (so all members have expressed their plans by MAY07)
  • Purple (does not plan to implement ET at all): 33 airlines
  • Brown (will use another airline code to issue tickets): 3 airlines

This means 3 airlines will be “hidden” behind another carrier using the same airline code, so they will practically introduce ET, and will have some backoffice accounting work to do in-house. 33 airlines however (almost 10% of all member airlines!!) plan not to roll-out Electronic Ticketing at all! This is quite a surprising number at first glance, but in reality, these are mostly very small, charter airlines who do not sell their tickets via travel agencies and reservation systems, so they can have their own alternative ways to replace electronic tickets and they actually only account for about 0.1% of the total sales. But 321 airlines (89% of the member airlines) will fulfill the BSP (travel agency) enabled Electronic Ticketing requirement by the prolonged deadline of 31MAY2008!! This is a great achievement!

96.5% of all tickets sold at travel agencies

On the other hand, if we look at ticket volumes the situation slightly changes. As you would guess, if a large airline becomes ET enabled, and especially interline ET enabled (is able to sell ET’s that include another airline) with more and more partner airlines, the ticket volume percentage would jump much more! So by MAY2007 the global penetration of ET’s within the IATA BSP’s (travel agency sales) was already at 80.7%! IATA projects this number to grow to 92% by the end of the year. The difference from there to reach the above mentioned 96.5% means 18 million tickets!! Quite a lot if you try to imagine this many paper tickets physically – it would make a really huge pile of paper, even though these 18 million paper tickets only account for 4.5% of worldwide airline ticket sales! By thinking about this, it’s much easier to imagine that by stopping paper ticket issuance totally and moving to 100% ET really can save the worldwide airline industry about 3 billion USD annually. (Not to mention all the environmental impacts…)

96.5% in Interline Volumes

Based on the above numbers, IATA has decided to extend the deadline for the issuance of the last paper tickets at an IATA registered travel agency, due to the fact that it is believed some airlines would not be able to make it by the end of 2007 (the original deadline). Also the service providers are overloaded with interline ET connection requests, which they seem not to be able to handle before the year end. IATA foresees that by the end of 2007, some 2100 interline Agreements will be introduced, which would cover about 75% of all interline connections. In terms of ticket volumes, this means a higher percentage. To get to the desired level of 80% (which would mean 2300 agreements), many service providers and airlines would have to be involved at an increased pace, and the difference would actually be 2.3 million tickets!

by balint01

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100% E-Ticketing – New Deadline: 31MAY2008

The new deadline set by IATA for member airlines to reach 100% Electronic Ticketing (ET) is an extension of five months. The well known and communicated deadline was originally 31DEC2007, but as the progress had not been exactly as planned earlier, this year’s AGM (Annual General Meeting) decided to add a “one-off” additional five months for airlines to comply with the requirement!

Decided also on the AGM back in 2004, IATA laid down the roadmap to completely switch to ET and to eliminate Paper Tickets from the world by the end of 2007. This left 3 and a half years for the airlines to comply with such a request, while some of the airlines at the time were already very well advanced in ET usage, but many of the members had not yet started their ET projects back then. The end of 2007 deadline was promoted by IATA, but it is very well known and accepted that the world’s leading and big airlines wanted to have IATA in front of them when pushing the smaller aviation companies to introduce ET. Why would they do it? Simply because the big savings from ET come when you have totally get away with Paper Tickets (no need to lease/buy and maintain the expensive printers, no need to buy expensive blank ticket stocks (TAT – the one that makes your fingers pink…) or ATB (magnetic stripe) coupons, etc.)

100% ET - Delayed (by balint01)

So did IATA back out from a badly set goal while defeated? I don’t think so!! I think they behaved just the right way! In all workshops, conferences, and meetings since 2004, the message to the member airlines was very clear: the original deadline will not be changed, period! As soon as there were no IATA personell around, basically all ET responsibles (from airlines, airports, ground handling companies and even system providers) looked at each other and said: 100% will not be reachable and gave a smile to each other… But we also all agreed that if we get up to 85-90% (which would be realistic) it would still generate huge savings and bigger customer satisfaction, so it’s worth working on it! And of course it was also clear that the major players on the market (AA, BA, CX, JL, QF, LH, AF/KL/NW, DL, UA etc.) will push the smaller ones and if you don’t jump on this bandwagon, you’ll lose business with these big airlines. Which is key to survival to most smaller sized carriers… So we all worked enthusiastically towards a goal that made us smile every once in a while, but we all took it seriously! The real goal was to reach as high of a percentage of ET’s as possible, and to get as close to 100% as possible.

And now the deadline is changed! Even though at first it may look like the airline industry has failed a deadline, in my opinion this is a realistic extension and beneficial for all! The large majority of the IATA airlines are now ET enabled (and most of them have become so, in the last 2-3 years since the original announcement was made)! Of course there are still some, for which these 5 months can make a difference and it’s good from the industry that they will wait for those that had a hard time convincing their top management, lobby for slots with system providers or match time slots with interline partners. I personally foresee a large progress in those extra 5 months in terms of ET percentage and usage, especially in the interline sales volumes and simply in the number of working interline ET connections!

(And let’s not forget that by the fact that it’s an extension of exactly 5 months (and not 6), the IATA Board and the CEO’s of the member airlines can officially conclude this project as a great success on the next AGM (June 2008) only a few days after the deadline! Which is a good occasion to officially close such a big industry-wide project and share some champagne! 🙂 )

By balint01


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